Good evening. It’s no surprise that China has been ratcheting up its cyber subterfuge against the United States. But it has been surprising that Microsoft, a leading U.S. government contractor, has been so central and vulnerable to China’s attacks. Our cover story this week looks at Microsoft’s long and successful history in China, as well as how the company might manage the tricky geopolitical tightrope it has found itself on. Elsewhere, we have infographics on the Chinese chipmaker challenging Nvidia; an interview with Robert Rubin on whether the U.S. should want China to prosper; a reported piece on the China threat to Arm’s mega IPO; and an op-ed about how China must avoid a debt-deflation spiral. If you’re not already a paid subscriber to The Wire, please sign up here.
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Software and Tear
Microsoft has a substantial and long-standing footprint in China, succeeding where many of its tech peers did not. But now the company, which is a leading contractor for the U.S. government, has found itself in the middle of China’s increased cyber subterfuge. After a string of devastating attacks, many are questioning the company’s reliability as well as drawing attention to its cozy relationships in China. Brent Crane reports.
The Big Picture: Joining the Chips Race
Biren Technology’s chips already have capabilities only narrowly behind those of Nvidia. This week’s infographics from Aaron Mc Nicholas take a closer look at the company, which could be set for a stock market listing in Hong Kong as soon as this year.
A Q&A with Robert Rubin
A former co-chairman of Goldman Sachs, Robert Rubin played an essential role in the Clinton administration, first as the founding director of the National Economic Council, which he turned into a White House power center. Then, from 1995 to 1999, he was Treasury Secretary as the administration pressed China to make the economic reforms necessary for admission into the World Trade Organization. After a stint at Citigroup, he has played leading roles at the Council of Foreign Relations and the Brookings Institution. In this week’s Q&A with Bob Davis — part of our series ‘Rules of Engagement’ — he discusses why investors should steer away from China and the issues with linking trade and human rights.
Robert Rubin
Illustration by Lauren Crow
The China Threat to Arm’s Mega IPO
With so-called ‘cornerstone’ investors including Apple, Google and Nvidia already signed up, Arm this week said it is aiming for a market capitalization of up to $52 billion with its initial public offering in the United States this fall. But as Aaron Mc Nicholas reports, a host of risks stemming from China are casting a cloud over the chip designer’s listing plans.
China Must Avoid a Debt-Deflation Spiral
If the ‘Two Ds’ become entrenched it could be hard for China’s economy to recover, argues Shang-Jin Wei in this week’s op-ed.
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