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22 Nov 18. UTC gets Chinese nod for Rockwell Collins purchase, deal set to close. United Technologies Corp on Friday received Chinese regulatory approval for its $30bn purchase of aircraft parts maker Rockwell Collins Inc, clearing the final hurdle to complete the largest aerospace deal in history. The conditional approval for the deal between the two American industrial heavyweights comes during a period of escalating trade tensions between China and the United States. The dispute between the world’s two largest economies had fanned concerns among UTC shareholders that the merger could fall victim to the growing tensions.
UTC said on Friday the transaction should close within three business days. Last month the company had already expressed confidence of securing Chinese approval for the deal.
China requires both UTC and Rockwell to dispose certain assets, and regulators also specified requirements related to the supply of aircraft components in the country, a statement by China’s State Administration for Market Regulation showed. The market regulator oversees anti-monopoly issues.
Connecticut-based UTC, which makes Pratt & Whitney jet engines, Otis elevators and various aircraft components, is hoping Rockwell will give it more leverage against aircraft makers, which are negotiating for price cuts. UTC’s customers include Boeing, Airbus and Bombardier.
Meanwhile, other major American mergers have run into trouble with Chinese regulators in the backdrop of the trade dispute, the latest being Qualcomm Inc’s failed attempt to buy NXP Semiconductors NV. Still, China this week gave an unconditional approval for Walt Disney Co’s $$71.3bn deal to buy Twenty-First Century Fox’s entertainment assets.
UTC, under pressure from activist investors to split itself up, said last month it was considering options including entertaining interest from third parties to buy any of its businesses. Shares of Rockwell Collins jumped about 9 percent in morning trading in New York, while UTC’s stock climbed about 2 percent. (Source: glstrade.com/Reuters)
20 Nov 18. US considers export controls on AI and other new tech. Restrictions applied to weaponry could be extended as trade war with China intensifies. The Trump administration is considering curbs on exports of advanced technologies ranging from artificial intelligence to robotics, as it seeks new means to protect American leadership in innovation from Chinese competition. On Monday, the commerce department said it was seeking public comment by December 19 on “whether there are certain emerging technologies that are essential to the national security of the US”. The Trump administration could then proceed to impose export restrictions on those products, as the US has traditionally done for military technology and weaponry. In a document published on the Federal Register, the commerce department listed all the products it might subject to export curbs. These included items from genomics, to computer vision and audio manipulation technology, to microprocessor technology, quantum computing, mind-machine interfaces and flight control algorithms. The move by the commerce department — which was required under the Export Control Reform Act legislation enacted earlier in the year — comes as the trade war between the US and China has escalated well beyond the question of tariffs on industrial goods. Trump administration officials — and many US business leaders — have grown increasingly concerned at China’s alleged intellectual property theft and forced technology transfer aimed at bolstering Beijing’s drive towards a more innovative domestic economy. This month, the US placed Fujian Jinhua, a Chinese technology group, on a list of entities that were subject to an export ban from the US, after it was accused of stealing intellectual property from Micron, an American chipmaker. Meanwhile, the US justice department has vowed to ramp up the prosecution of individuals and companies engaged in the theft of intellectual property. The potential application of export controls on such a sweeping range of technology products could be hugely disruptive to Silicon Valley. “These new controls could have a major impact on existing and prospective R&D projects, especially given the current level of investment and technology exchange among US, Chinese and other non-US companies around the globe,” international trade lawyers at Dechert wrote in a note. Recommended Semiconductors Chipmakers face threat of long-term slump The move by the commerce department came as Donald Trump, the US president, is gearing up to meet Xi Jinping, his Chinese counterpart, on the sidelines of the G20 summit in Buenos Aires, Argentina, in an attempt to reach a ceasefire in the rolling trade war between the countries. The US has demanded a series of concessions from Beijing — including on technology policy — but officials have said that the Chinese response has been insufficient so far. This weekend, tensions between the US and China rose further as Mr Xi and Mike Pence, the US vice-president, clashed at the Asia-Pacific Economic Cooperation summit in Papua New Guinea. (Source: FT.com)
20 Nov 18. BIS Launches Review of Controls for Certain Emerging Technologies – (83 Fed. Reg. 58201) . The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) is seeking public comment on criteria for identifying emerging technologies that are essential to U.S. national security, for example because they have potential conventional weapons, intelligence collection, weapons of mass destruction, or terrorist applications or could provide the United States with a qualitative military or intelligence advantage. Comment on this Advanced Notice of Proposed Rule Making (ANPRM) will help inform the interagency process to identify and describe such emerging technologies. This interagency process is anticipated to result in proposed rules for new Export Control Classification Numbers (ECCNs) on the CCL. As part of the National Defense Authorization Act (NDAA) for Fiscal Year 2019, Public Law No: 115-232, Congress enacted the Export Control Reform Act of 2018 (the Act or ECRA). Section 1758 of the Act authorizes Commerce to establish appropriate controls, including interim controls, on the export, reexport, or transfer (in country) of emerging and foundational technologies. Under the Act, emerging and foundational technologies are those essential to the national security of the United States and are not described in Section 721(a)(6)(A)(i)- (v) of the Defense Production Act of 1950, as amended. Emerging and foundational technologies, in keeping with ECRA, will be determined by an interagency process that will consider both public and classified information as well as information from the Emerging Technology Technical Advisory Committee and the Committee on Foreign Investment in the United States. In identifying emerging and foundational technologies, the process must consider:
- The development of emerging and foundational technologies in foreign countries;
- The effect export controls may have on the development of such technologies in the United States; and
- The effectiveness of export controls on limiting the proliferation of emerging and foundational technologies in foreign countries.
Interested persons have until December 19, 2018, to submit their comments. (Source: glstrade.com)
19 Nov 18. US, Ukraine in ‘close discussion’ for new lethal arms. The U.S. and Ukraine are in “close discussion” for Washington to supply another tranche of lethal weapons for Kiev’s fight in eastern Ukraine, where “Russians keep bringing new military technology,” Ukraine’s foreign minister said Saturday. The remarks from Ukrainian Foreign Minister Pavlo Klimkin on the sidelines of the Halifax International Security Forum came one day after Klimko met with U.S. Secretary of State Mike Pompeo in Washington, D.C. Pompeo affirmed U.S. support for Ukraine’s nearly four-year conflict with Russia-backed separatists and said America would never accept Russia’s annexation of Crimea.
Ukrainian President Petro Poroshenko announced in February the imminent delivery of anti-sniper weaponry, including tools for electronic warfare, air defense. Last December, the U.S. announced a $47m sale of 210 Javelin anti-tank missiles to Ukraine — and the U.S. has reportedly supplied Kiev with Model M107A1 Sniper Systems.
On Saturday, Klimkin confirmed to reporters, “We are in discussions about other pieces of defense equipment,” but declined to get specific.
Speaking separately at the forum on Saturday, Sen. Chris Coons, a senior member of the Senate Foreign Relations Committee, called the fighting “a frozen conflict” and expressed support for the Trump administration’s decision to provide training and lethal arms to Ukraine.
“I think we can push Russia out of Ukraine,” said Coons, D-Del. “We need to work with our allies to make this a sustained priority.”
Coons said the effort may take decades of pressure, likening it to the Soviet Union’s occupation of the Baltic States, which lasted from the 1940s to the 1990s.
Klimkin said the presence of Russian and Russian-backed forces in the Donbass, “is pretty much constant,” but the presence of U.S.-supplied arms has had an effect.
“It’s an ongoing discussion, because Javelins were important psychologically,” he said. “We have noticed that the Russians [withdrew] their tanks deeper into the occupied area … basically fearing symbolically, psychologically and physically that such [anti-tank] weapons can be used in the case of Russian provocation.”
Russian forces have been moving newer military equipment like signal jammers and drones, along with traditional armaments, into the disputed Donbass region, as observed by international monitors. Four distinct electronic warfare systems were spotted in July by the Organization for Security and Co-operation in Europe.
By Ukraine’s reckoning, Russian-controlled forces have some 1,400 armored vehicles and tanks in the Donbass, and between 3,000 to 5,000 troops and mercenaries — along with heavy mortars among a range of artillery, which Russia uses for nighttime shelling from hidden positions.
Beyond the Donbass, another flashpoint is the disputed Azov Sea, which borders Russia, Ukraine, and Crimea. Kiev has accused Russia of harassing its ships, and after Kiev interfered with 15 ships headed for Crimean ports, the Kremlin warned it would protect Russian ships.
Ukraine has been moving to build up its defense capabilities in the city of Azov, Klimkin said, as Russia attempts a “creeping annexation” of the sea and delays Ukrainian ships sailing on it, to intimidate and disrupt trade.
“Russian naval capabilities are stronger than ours, but we have to build up,” Klimkin said. “We are very decisive on defending our interests in the Azov Sea, and we can’t let the Russians take control of the whole Azov Sea.
The “Ukrainian army is not the same army as it was five years ago, so I believe we are prepare we are prepared for effective provocations,” he said. (Source: Defense News)
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