China retaliates against EU with a ban on European medical devices
European companies will be excluded if the budget for procurement is above 45 million yuan ($6.28 million), according to a notice from the Finance Ministry on Sunday with the restrictions in place the same day. The move will not apply to European companies that have invested in China and that manufacture goods in the country.
China on Friday imposed anti-dumping duties on European brandy, most notably cognac produced in France. While the duties on brandy include several exceptions for major brandy producers, China and the EU have multiple trade disputes across a range of industries. China protested after many European countries levied duties on EVs made in China. Since then, China has also launched investigations into European pork and dairy products.
In June, the EU announced that Chinese companies were to be excluded from any government purchases of more than 5 million euros ($5.89 million). The measure seeks to incentivise China to cease its discrimination against EU firms, the EU said, accusing China of erecting 'significant and recurring legal and administrative barriers to its procurement market.'
In response, China has said it had 'no choice but to implement countermeasures.'
'China has repeatedly expressed through bilateral dialogues that it is willing to properly handle differences with the EU through dialogue and consultation and bilateral government procurement arrangements,' said a statement from a spokesman with the Ministry of Commerce. 'Unfortunately, the EU has ignored China's goodwill and sincerity and still insisted on taking restrictive measures and building new protectionist barriers.'
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Bloomberg
25 minutes ago
- Bloomberg
China Wants 115,000 Nvidia Chips to Power Data Centers in the Desert
By Andy Lin Mackenzie Hawkins Colum Murphy James Mayger Graphics by Jin Wu Adrian Leung July 8, 2025 Yiwu Advanced Computing Cluster There's a construction boom under way on the edge of the Gobi desert in Xinjiang, where cranes are at work in fields of rock and the sound of jackhammers fills the air. Here in the modest county of Yiwu, China is building out its ambitions to lead the world in artificial intelligence. The futuristic structures are data centers that the operators seek to equip with high-end American semiconductors — chips that the US government doesn't want its geopolitical rival to obtain. A Bloomberg News analysis of investment approvals, tender documents and company filings shows that Chinese firms aim to install more than 115,000 Nvidia Corp. AI chips in some three dozen data centers across the country's western deserts. Operators in Xinjiang intend to house the lion's share of those processors in a single compound — which, if they can pull it off, could be used to train foundational large-language models like those of Chinese AI startup DeepSeek. The complex as envisioned would still be dwarfed by the scale of AI infrastructure in the US, but it would significantly boost China's computing prowess as President Xi Jinping pushes for technological breakthroughs. Such a project also would raise serious concerns for officials in Washington, who restricted leading-edge Nvidia chip sales to China in 2022 over worries that advanced AI could give Beijing a military edge. Yet the Chinese documents contain no explanation of how companies plan to acquire the chips, which cannot be legally purchased without licenses from the US government, permits that haven't been given. The companies listed in the filings, state officials and central government representatives in Beijing declined to comment when asked to explain. To gauge whether Chinese entities could realistically procure that quantity of restricted processors, Bloomberg News spoke with more than a dozen people who've been involved in or privy to US government investigations into the matter, as well as several people with direct knowledge of the black market in China. None of those familiar with the US probes said they previously knew of the data center buildout in Xinjiang. All said that while they believe there are indeed banned chips in China, they're not aware of an illicit trade network sophisticated enough to procure more than 100,000 such processors and direct that hardware to a centralized location. But the US government doesn't appear to have reached a consensus on the number of restricted Nvidia chips currently in the Asian country. Most of the people interviewed for this story said they were unaware of an agreed-upon estimate, while some offered rough numbers that differed by tens of thousands of processors. Two senior Biden administration officials said they believe there are around 25,000 banned Nvidia chips in China — a number that, one of them added, would not be terribly concerning. That volume of semiconductors, assuming they are integrated into servers and designated for the same facility, could power at most one mid-sized data center. The US Commerce Department — whose Bureau of Industry and Security, known as BIS, is tasked with implementing and enforcing chip trade restrictions — did not answer detailed questions for this story, including how many banned Nvidia chips the Trump administration believes are in China, nor whether Trump officials were previously aware of the projects in Xinjiang. 'Posting a web page asking about restricted products is not the same as successfully licensing, building, and operating a datacenter,' Nvidia said in an emailed response to questions about the Chinese companies' claims. 'Datacenters are massive and complex systems, making smuggling extremely difficult, and we do not provide any support or repairs for restricted products.' The California-based company also said that 'trying to cobble together a datacenter from smuggled, previous-generation products makes no business or engineering sense,' especially since chips and servers made by Huawei Technologies Co. are widely available in China. Jensen Huang, Nvidia's chief executive officer, made his position clear at a May conference in Taipei: 'There's no evidence of any AI chip diversion,' he said. Yet the head of BIS pointedly contradicted that assertion just weeks later, telling US lawmakers that there is clearly a problem with AI chip smuggling. 'It's happening,' said Commerce Under Secretary Jeffrey Kessler. 'It's a fact.' Although Kessler didn't mention Nvidia by name, the company is by far the dominant provider of such semiconductors. Kessler also said that US efforts to restrict Huawei's chipmaking capabilities will keep China's output at just 200,000 AI processors this year — a number far short of domestic demand. To be sure, Bloomberg News has not found evidence that China has amassed, or can amass, 115,000 banned Nvidia chips — nor evidence that smaller volumes of restricted semiconductors that US officials believe are in the country have been directed to centralized locations. And yet in Yiwu, the construction goes on. Looming out of the desert, a tower the height of the Golden Gate Bridge radiates an intense light that pierces the surrounding dust clouds. Arrays of reflectors focus the sun's energy onto a receiver that allows the daytime heat of the arid plains to be stored, ensuring continuous power generation. It's one main reason for the choice of Yiwu, just to the south over a mountain pass. On the barren hill behind one new building stands a wall with a slogan picked out in red Chinese letters two meters high: 'Data-electricity fusion shows great promise.' Xinjiang, and especially the Hami region which includes Yiwu County, is rich in wind and solar energy, as well as abundant in coal, offering a ready source of affordable power. Local governments there are at the forefront of a state strategy to take advantage of those energy resources — along with cheap land and cool weather at altitude, helping counter the heat generated by racks of servers — to meet the AI computing-power demand of more economically developed regions such as Shanghai and Shenzhen. Xinjiang, China's Major Hub for Renewable Energy Rich in wind and solar energy resources, Hami in eastern Xinjiang has become one of China's largest renewable power bases On a midweek day in March, workers loaded windmill blades onto the back of trucks traveling the road between the prefectural capital of Hami City and Yiwu, over bleak terrain past occasional camels grazing, and through a new tunnel leading out to a plain with views of snow-capped mountains. The main road into town leads past the first data center, still under construction, with a man welding from his perch on metal scaffolding. Hami is best known for its sweet melons, and Yiwu claims to be the site of the last battle on the mainland of the Chinese civil war in 1949. There's a monument downtown dedicated to a horse that played a role in the final engagement between Communist forces and nationalists loyal to Chiang Kai-shek. The authorities in Xinjiang are particularly suspicious of foreigners due to Western allegations of human-rights abuses against ethnic Uyghurs. Interview requests sent to eight data center operators in Yiwu were ignored, rejected or agreed to and then cancelled at short notice. The Xinjiang government and Ministry of Industry and Information Technology (MIIT), the central government ministry overseeing data center development, didn't reply to Bloomberg requests for comment. The most important part of a giant data center is relatively small. Nvidia dominates the market for so-called AI accelerators, highly coveted components that have propelled the chipmaker's valuation to nearly $4 trillion. The processors are connected together in giant arrays numbering tens of thousands and used to sift through mountains of data to create new computer code that can in many ways approximate human intelligence. The US barred China from importing Nvidia's best chips in October 2022, a month before OpenAI's ChatGPT debut roiled the tech industry and sparked a global race that now includes DeepSeek among its top players. Washington several times has ratcheted up those curbs, restricting sales to China of a variety of advanced semiconductors and the machines used to make them — with additional sanctions levied on specific Chinese tech companies. That sweeping effort, which dates back to Trump's first term, has become a primary source of tension with Beijing — one that Chinese officials repeatedly raised in recent trade talks with the US after the Trump administration imposed punitive tariffs. 'All the greatest chips in the world are American, right? So of course they want them,' Commerce Secretary Howard Lutnick told CNBC last month, speaking about China's position during negotiations in London. 'And of course we said 'absolutely not.'' The Xinjiang effort suggests that China's AI ambitions — which hinge in large part on locally produced chips from the likes of Huawei — still include some hope of accessing restricted Nvidia hardware too. Project approval documents show that in the fourth quarter of 2024, local governments in Xinjiang and in neighboring Qinghai province green-lit a total of 39 data centers that intend to use more than 115,000 Nvidia processors. All of the companies stated in their investment plans that they aim to obtain H100 or H200 chips, two Nvidia GPUs, or graphics processing units, that were the industrial standard for training large language models such as OpenAI's GPT4o and Google's Gemini through last year. Nvidia this year debuted a new, more advanced model — dubbed the Grace Blackwell — that is banned along with the H100 and H200 from export to China without a US government license. Seven Xinjiang projects that aim to use those processors had started construction or won open tenders for AI computing service as of June 2025, according to tender documents obtained by Bloomberg. One operator says it's already using advanced hardware facilities to support cloud access to DeepSeek's R1 model, according to local news reports. Still, the provincial projects' description of their intended computing capabilities may be somewhat aspirational: Local party officials try to signal to Beijing that they are working toward national priorities, but Chinese companies frequently launch initiatives that are never completed. One of the largest projects involves a company ultimately controlled by Nyocor Co., a Tianjin-based energy firm mainly engaged in solar and wind power. It proposes to build a data center powered by 625 H100 servers, one of the banned Nvidia models. It would start with 250 servers in the first phase. That's 2,000 H100 chips. Tender documents show the Nyocor project has started installing servers and other equipment at the data center building, and has asked China Bester Group, a Hubei-based IT company, to supply the hardware. Unlike the investment approval documents, which explicitly state the company wants to use H100s, the tenders don't specify whether the installed servers run on Nvidia chips or some alternative. The amount of the investment was not disclosed. Nyocor is selling its computing power to Infinigence AI, one of the largest AI infrastructure companies in China. The company has raised one billion yuan since creation. "Our goal is to turn computing service into facilities like water and gas, readily available when developers turn on the switch," said Infinigence's CEO in an interview with local media in September 2024. Bloomberg estimates that in order to complete all of the 39 projects as outlined, companies would need to figure out a way to purchase more than 14,000 data servers or 115,000 Nvidia H100 or H200 chips, both banned for China-based entities. Bloomberg estimates these chips would be worth billions of dollars based on black market prices in China. Nyocor declined to comment. China Bester and China Energy Investment didn't reply to requests for comment. Infinigence AI couldn't be reached for a response. Around 70% of computing power planned by the identified projects is in a single compound set up by the local government in Xinjiang. That makes the region — the epicenter of Western charges of Chinese rights abuses including forced labor and religious persecution — pivotal to China's efforts to seize the lead from the US in a sphere seen as key to future global technological, and geopolitical, dominance. Even if successful, the Xinjiang complex would only involve the number of Nvidia chips that one major hyperscaler — a term for massive data center operators like Microsoft Corp. and Amazon Web Services — deploys in a single week, according to data Nvidia provided on a recent earnings call. Still, Chinese companies like DeepSeek are beginning to show they can do more with less. 'The gap between leading US and Chinese AI labs is closing,' said Kevin Xu, a tech investor and founder of US-based Interconnected Capital, who put it at around three months. Players like DeepSeek, which says it trained its R1 model using less-advanced Nvidia chips, are 'very serious and sincere' about pursuing artificial general intelligence, Xu said. The fact that leading Chinese models are open source means they spread faster globally, he added, while noting that diffusion is hard to track: 'Beijing sees this trend as a source of technological soft power worth embracing.' DeepSeek and other Chinese AI startups have already expressed interest in collaborating with the data center projects in Xinjiang, according to an employee of one of the largest investors in the Yiwu sites. That employee, whose name has been withheld to protect their identity, said in a message exchange that their company will invest more than 5 billion yuan ($700 million) in data center projects there in 2025 and 2026. China's data center industry is expected to surpass 300 billion yuan in scale this year, according to the Securities Times. Chinese entities are collectively expected to invest nearly that amount on an annual basis by 2028, according to the China Communications Industry Association — a more than threefold increase from a half-decade prior. Xinjiang has already brought its first 'intelligent computing center' online, and constructed 24,000 petaflops of computing power for demand from the logistics hub of Chongqing, Chairman of the People's Government of Xinjiang Erkin Tuniyaz said in an annual government work report in January, without specifying the type of chips installed. The cited computing power is equivalent to roughly 12,000 server-integrated Nvidia H100s. Prospective investors in such projects are attracted with the promise of free electricity worth up to 20% of total power costs. Data center operators also can access government support ranging from one-off payments for construction to operation incentives for up to five years, depending on company size, according to local government documents reviewed by Bloomberg. Experts in 'green computing' areas are also eligible for favorable terms on accommodation, children's education and research funding. From a standing start, 'Xinjiang's intelligent computing has achieved a historic breakthrough,' Tuniyaz said in January. China's Planned Computing Power Corridors China's East Data West Computing initiative brings together AI data centers and computing power demands Policymakers in Washington for years have been aware that limiting China's access to US technology is not as simple as writing a regulation. Not two months after the chip restrictions took effect, Chinese officials caught a woman hiding forbidden hardware in a baby bump. The American AI company Anthropic recently said smugglers have packed GPUs next to live lobsters. Nvidia has dismissed both examples as 'tall tales' that ignore the complexity of building data centers, which require operational support to run properly — support that Nvidia does not provide for restricted products in China. Still, conversations with people privy to illicit semiconductor transactions, as well as media reports from a range of outlets, indicate that smuggling networks have gotten more sophisticated over time. Those stories — which have helped inform US investigations, people familiar with the matter said — have cited examples ranging from dozens of illicit processors to more than a thousand. Potential smuggling in Malaysia has become a big concern for the Trump administration, which plans to restrict Nvidia sales there to halt possible diversion to China, and also has asked Malaysian authorities to crack down on the issue — a request the government has said it'll heed. Officials in Singapore, meanwhile, are prosecuting three men for alleged fraud in exports to Malaysia of AI servers that likely contained advanced Nvidia processors — bound for an unknown final destination. In response to queries about Washington's export control plans, Malaysia's Ministry of Investment, Trade & Industry said the country will 'act firmly against any company or individual should there be strong evidence' of misuse or diversion of advanced tech. The ministry added that Malaysia welcomes a dialogue with the US and other nations to 'clarify any misunderstandings and to strengthen mutual trust.' Trump officials are separately investigating whether DeepSeek may have accessed restricted chips through intermediaries in Singapore, and a bipartisan congressional committee focused on China recently requested Nvidia's customer data for 11 Asian countries, related to concerns that DeepSeek may have circumvented US export controls. (None of the documents viewed or interviews conducted through the course of this investigation indicated any link between the Xinjiang projects and supply chains in Singapore or Malaysia. Nvidia is not accused of any wrongdoing in Singapore's probe or in the US investigation into DeepSeek.) Read More: Lutnick Urges Tougher Enforcement of Export Curbs on China Nvidia consistently has said it abides by all US rules, but Huang has made no secret that he doesn't like Washington's strategy. Years of curbs — including on crucial semiconductor manufacturing equipment — have 'failed' to contain Huawei's rise, he said at the May conference in Taipei. Nvidia now sees Huawei as a formidable competitor, and the company worries its Chinese rival will continue to improve and gain market share — unless the US government allows Nvidia to compete on Huawei's home turf. Washington isn't buying it. The Trump administration has already further limited the types of chips Nvidia can sell in China, at a $5.5 billion hit to the company. White House AI Advisor Sriram Krishnan, asked about Huang's urge to lift those curbs, said that 'there is still bipartisan and broad concern about what can happen to these GPUs once they're physically inside' the Asian country. Meanwhile, Chinese companies continue to build their data centers, a sign they expect to receive AI chips from somewhere. Two such construction projects were approved by the Qinghai government in December 2024, with a total investment of 13.5 billion yuan, documents from Qinghai's investment review website show. The companies applying for construction permits for both projects were founded that same month. China's company registry services show both entities can be traced by shareholding data to the same group of controlling companies: one real estate firm in Qinghai named Qinghai Borong Group and one AI tech company in Sichuan called Chengdu Qingshu Technology. They didn't respond to requests for comment. Neither is on Nvidia's official resellers list. Related tickers: NVDA:US (NVIDIA Corp) 40978Z:CH (Huawei Technologies Co Ltd) 600821:CH (NYOCOR Co Ltd) 603220:CH (China Bester Group Telecom Co Ltd) Additional reporting by Ian KingYuan GaoEdwin ChanJenny Leonard Edited by Alan CrawfordJane PongPeter Elstrom Photos edited by Yuki Tanaka Methodology Bloomberg News obtained the investment plan documents from Xinjiang and Qinghai's government websites exhibiting investment approvals, the description of which specify the investing company's name, date of approval and how many H100/200 servers are to be installed or the planned total computing power. Bloomberg cross-checked the company details in the documents with China's company registry information to identify their ultimate parents, and looked them up in the tender databases in China for announced procurement and tender information. Bloomberg reporters also found details of Yiwu's AI development project when conducting reporting in the town, with billboards showcasing the industrial park's master plan. Terms of Service Do Not Sell or Share My Personal Information Trademarks Privacy Policy Careers Made in NYC Advertise Ad Choices Help ©2025 Bloomberg L.P. All Rights Reserved.
27 minutes ago
EU migration delegation ordered deported from eastern Libya on alleged entry violations
CAIRO -- CAIRO (AP) — Authorities in eastern Libya refused entry to three European ministers and the EU commissioner for migration on alleged entry violations, apparently after they stopped first in the rival Libyan capital of Tripoli in the west. A statement from the prime minister of the eastern part of Libya, Osama Hammad, said the interior ministers of Italy, Greece, Malta and the EU migration commissioner, Magnus Brunner, were 'persona non-grata' after they were denied entry shortly after their arrival in Benghazi. It said the ministers had entered illegally and had not followed Libyan diplomatic conventions. The ministers were in 'flagrant contravention of established diplomatic norms and international conventions, and through actions that demonstrably disregard Libyan national sovereignty, as well as in violation of Libyan domestic laws,' the statement said. The delegations 'are urged to engage with the Libyan Government in accordance with the principle of reciprocity, as enshrined in international agreements, treaties, and diplomatic custom,' it added. In addition to Brunner, the delegation included Greek Migration and Asylum Minister Thanos Plevris, Italian Interior Minister Matteo Piantedosi and Maltese Home Affairs Minister Byron Camilleri. The delegation was visiting Libya seeking tougher migration measures against boats carrying migrants from Libya. The EU has spent years and millions of euros trying to stem the people smuggling operations that have thrived in Libya's lawlessness and brought hundreds of thousands of desperate people to European shores. Libya plunged into chaos after a NATO-backed uprising toppled and killed longtime dictator Moammar Gadhafi in 2011. In the chaos that followed, the country split, with rival administrations in the east and west backed by rogue militias and foreign governments. Currently, Prime Minister Abdul Hamid Dbeibah heads the internationally recognized government in the capital of Tripoli in the west while Hammad heads the administration in the east, where the powerful military commander Khalifa Hifter continues to also hold sway. The EU delegation had met first with Dbeibah, and the deportation incident was apparently caused because the European delegation stopped first in Tripoli, said Greek Deputy Prime Minister Kostis Hadzidakis. Usually foreigners including diplomats coordinate with both administrations if they want to visit western and eastern Libya. Speaking to state-run ERT television in Greece, Hadzidakis said the Tripoli meeting went ahead as planned. 'However, in Benghazi —perhaps because the visit to Tripoli came first — the Benghazi government decided it would not receive the European Commissioner and the three ministers. I don't think that was a constructive move, especially given that the European Union is genuinely trying to find a solution to this very unusual situation — just as it has tried with our other southern and eastern neighbors — on a complex issue like migration." For southern and eastern Libya, which are under the control of Hifter's forces, visitors have to coordinate and get permits from the east-based government, which is allied with Hifter. It's not clear if such permits were sought or granted. In Italy, opposition lawmakers who have criticized the hard-line stance against migration of the government of Premier Giorgia Meloni were quick to point out the irony that her migration minister was deported from a country on alleged immigration violations. 'Piantedosi was turned back from Libya because he was accused of illegal entry,' Democratic Party lawmaker Matteo Orfini wrote on Facebook. 'I was thinking of an ironic comment but I'd say that's good as is.'
Bloomberg
an hour ago
- Bloomberg
Big Take Asia: China's AI Bet Rises From the Desert
In a remote part of China's northwestern Xinjiang region, dozens of data centers rise from the desert. A Bloomberg analysis of investor and tax documents and company filings found Chinese companies plan to buy more than 115,000 high-tech Nvidia chips — chips the US has banned from being exported to China – to power these centers, which could then be used for training AI models. On today's Big Take Asia Podcast, host K. Oanh Ha talks to Bloomberg's Andy Lin and James Mayger about the story, and what it means for China's AI master plan.
