Biden to curb China growth for chipmakers getting federal funds

The Biden administration is set to unveil tight restrictions on new operations in China by semiconductor manufacturers that get federal funds to build in the US.

The $50 billion CHIPS and Science Act will bar firms that win grants from expanding output by 5 per cent for advanced chips and 10 per cent for older technology, according to officials at the Commerce Department, which will disburse the funds. 

The department on Tuesday will outline the new restrictions, which will include a $100,000 spending cap on investments in advanced capacity in China, as well as other measures, said the officials, who asked not to be identified as the information isn’t yet public.

Vanguard to close business in China

Vanguard Group, the US asset management giant, has decided to shutter its remaining business in China after a retreat two years ago, according to people familiar with the matter, abandoning a 27 trillion yuan ($3.9 trillion) fund market that global competitors are embracing.

The firm has notified the Chinese government of intentions to close its unit in Shanghai, the people said, requesting not to be named because the matter is private. The company also is planning to exit a robo-advisory joint venture with Jack Ma-backed Ant Group, they added. 

The moves will mark a complete exit from China for the $7.1 trillion giant, which once saw significant potential in the world’s second-largest economy.