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Good morning. Investor alarm that China may be cracking down on iPhone use by government officials has knocked $200bn off Apple’s market value, casting a shadow over next week’s launch of its latest smartphone.
Beijing’s reported curbs on government iPhones, alongside a resurgent Huawei, threaten to derail what should have been a moment of triumph for Apple: unseating Samsung at the top of the smartphone market. Before the China turmoil, analysts had predicted that the launch of the iPhone 15 would put Apple within reach of becoming the world’s biggest smartphone maker by volume for the first time. However, Apple’s shares have fallen by about 6 percent over the past two days as investors fretted about its fate in China, which makes up roughly a fifth of its revenue. Read the full story on Apple’s fresh challenges in China.
Here’s what else I’m keeping tabs on today and over the weekend:
1. Japan GDP: Revised second-quarter growth figures are set to be released.
2. G20 summit: India hosts world leaders, including US president Joe Biden, but not Chinese leader Xi Jinping, who is skipping the forum of leading nations. India has insisted that agreement on a final communiqué is within reach, despite the geopolitical friction ahead of the gathering.
3. Maldives presidential election: The vote on Saturday will have geopolitical implications as China and India compete for influence in the tiny Indian Ocean archipelagic country. (Reuters)
4. North Korea: A Chinese delegation will visit the country to participate in celebrations for the 75th anniversary of its founding on Saturday. (Associated Press)
How well did you keep up with the news this week? Take our quiz.
Five more top stories
1. China’s exports fell 8.8 percent in August compared with a year earlier, marking the fourth consecutive month of decline as the manufacturing sector in the world’s second-largest economy struggles to regain momentum. The renminbi hit the lowest level against the dollar since 2007 following the release of the data.
2. Former FTX executive Ryan Salame has pleaded guilty to criminal charges related to the collapse of the cryptocurrency exchange. He became the fourth former FTX executive to cut a deal with prosecutors, further isolating FTX founder Sam Bankman-Fried less than a month before his trial is set to begin. Here’s our report on the court hearing.
3. Internet heavyweight Tencent unleashed its key generative AI technology on Thursday, declaring “war has begun” with about a dozen rivals fighting to be China’s national artificial intelligence champion. China’s largest company by market value introduced “Hunyuan”, a large language model of the type powering OpenAI’s ChatGPT. Read more on the crowded battle for AI supremacy in China.
4. South Korea’s government sold its first yen bond, worth ¥70bn ($474mn), on Thursday in a sign of improving relations with Japan and as debt issuers from around the world flock to Tokyo this year to take advantage of low borrowing costs. The samurai bond sale was announced in June after Seoul agreed with Tokyo to restore a $10bn foreign currency swap deal for the first time in eight years. FT’s Song Jung-a reports on how samurai bond sales are picking up as diplomatic tensions thaw. Opinion: The diplomatic rapprochement sealed by South Korea and Japan this year is far shakier than it looks, writes Christian Davies.
5. The owner of a vessel carrying Iranian oil that was seized by Washington has pleaded guilty to conspiring to violate US international commerce laws. The case involving the 12-year-old tanker, the Suez Rajan, threatens to raise tensions between the US and Iran as Washington and its European allies have resumed talks over how to handle the Islamic republic’s nuclear activity. Read the full story.
FT Magazine
Li Lu in Tiananmen Square, June 3 1989, the day before Chinese troops marched in and opened fire on activists © Forrest Anderson/Getty Images
Before Li Lu made billions betting on China, the Himalaya Capital founder and chair was a radical who escaped the country’s post-Tiananmen crackdown. No other investor has a life story quite as unbelievable.
We’re also reading . . .
Chart of the day
Last week, Beijing unleashed its most comprehensive effort in years to rekindle demand in China’s moribund property sector, which normally accounts for more than a quarter of activity in the world’s second-largest economy. Is there finally hope for the debt-stricken industry?
Take a break from the news
Giorgio Armani isn’t going anywhere. While Valentino, Gucci, and Versace have all been sold to foreign investors, he remains the sole shareholder of the business that bears his name. “Everyone tells me I should just retire and enjoy the fruits of what I’ve built, but I say no . . . absolutely not,” the 89-year-old designer and chief executive told the FT. Giorgio Armani in Venice: not the retiring type
Additional contributions from Tee Zhuo and Gordon Smith
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