| US alarmed at China's chip production. Exxon looks to move into lithium. Asia stocks set to move higher. Here's what you need to know today. When US President Joe Biden implemented broad controls over China's ability to secure the kind of advanced chips that power AI models and military applications, Beijing responded by pouring billions into factories for the so-called legacy chips that haven't been banned — critical components for everything from smartphones to electric vehicles. That's sparked fresh fears in the US and Europe about China's potential influence and triggered talks of further reining in the Asian nation, according to people familiar with the matter. Meanwhile, US Commerce Secretary Gina Raimondo is planning to visit China in late August as part of the Biden administration's effort to reduce tensions between the world's two largest economies. China's State Council called on cities to start introducing policies to ensure the healthy development of their property markets, as top policymakers seek ways to help the economy. Cities should roll out measures that meet their own needs, a cabinet meeting chaired by Premier Li Qiang decided on Monday. Meanwhile, Beijing is seeking to boost consumption to spur economic recovery, although the government has stopped short of providing direct fiscal support to consumers and companies to increase spending. Here's everything China is doing to juice its flagging economy. Asian stocks were poised to start the new month higher, following a bullish mood on Wall Street that saw the S&P 500 finish July with its longest streak of monthly gains in almost two years. Japanese, Hong Kong and Australian futures pointed to gains as concerns dissipated that equity markets could become overheated. Some stock-picking hedge funds trying to cope with 2023's loopy markets are finally throwing in the towel. Meanwhile, the yen dropped after the Bank of Japan announced an unscheduled bond-purchase operation to tamp down rates after adjusting its yield curve control policy. BOJ watchers see no further tweaks this year. Apple's main supplier, Foxconn, is planning to invest close to $500 million to build two component factories in India as part of a steady diversification from China. At least one of the factories that the Taiwanese company plans to build in Karnataka state will produce Apple parts, sources said. A formal announcement is expected as early as this week. Apple suppliers have ramped up business in India over the past few years thanks to Prime Minister Narendra Modi's incentives to boost local manufacturing. Foxconn's decision suggests suppliers may move capacity out of China far faster than expected. Exxon is in talks with Tesla, Ford, Volkswagen and other automakers about supplying them with lithium as the oil giant works to build a business around the crucial battery metal, according to people familiar with the matter. Exxon is one of several oil and gas companies seeking to expand into lithium production to take advantage of surging demand for use in electric-vehicle batteries, and as a way of diversifying beyond fossil fuels. The world will need nearly 60 new lithium mines and plants to feed the growing demand for the shift away from fossil fuels, according to researcher Benchmark Mineral Intelligence. - Do you see the US entering a recession and, if so, when? Is the US stock market a bubble? Is now a good time to invest in the longest-duration bonds? Share your views in the latest MLIV Pulse survey.
Chinese equities remain a thorny puzzle for investors. They offer the flip-side to US stocks, which have powered ahead despite steep policy tightening from the Federal Reserve, taking the S&P 500 within 5% of the record peak touched in early 2022. Meanwhile, defying the Asian nation's accommodative policy settings, Chinese equities continue to languish in their pre-Covid ranges, with the CSI 300 Index more than 30% below the all-time high it reached in early 2021.  What gives? Well, it seems that China's efforts to revive growth have gained even less traction than the Fed's attempts to slow the US economy. (While inflation does seem to be cooling in the US, the overall data pulse remains robust.) Citigroup's economic surprise index has come tumbling down at an astonishing pace — dropping as low as minus 93 in July from the 27-year high of 162 reached in April. That's a collapse only exceeded by the meltdown that came with the initial pandemic lockdowns of 2020. As long as China remains averse to deploying immediate, large stimulus measures, equities are likely to lack the economic trigger to allow for a rapid and sustained turnaround. Garfield Reynolds is Chief Rates Correspondent for Bloomberg News in Asia, based in Sydney. | 
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