Chinese rare earths licence rules raise concerns about IP theft

Good morning and welcome back to FirstFT, your early morning business briefing. Here’s what we’re covering today:

• A plane crash near Ahmedabad airport in India

• China’s control of the rare earths market

• A sharp rise in oil prices

• Stablecoins going mainstream

• And the boom in sports tourism

We start with an exclusive story about China’s control of rare earths, the critical minerals that are widely used in electronics, fighter jets, electric motor vehicles and wind turbines that were central to Washington-Beijing talks this week in London.

What’s happening: Western companies say Beijing is demanding sensitive business information to secure rare earths as part of its export approval process. These include production details, images of products and facilities and confidential customer lists, according to multiple companies and official guidelines. “They ask for a lot of things, really a lot of things,” said a director whose company imports speaker parts to Italy from China.

Why it matters: The extensive requirements have raised concerns about potential misuse of data and the exposure of trade secrets, with some companies in sensitive industries finding it difficult to comply with or even apply for the export licences. China has significant leverage as it dominates the sector. China introduced the stricter controls in early April as tensions with the US ratcheted higher but has not said whether it will abandon them as part of the framework agreement with the US.

• China is winning: Beijing has used rare earth controls to beat Trump in the first skirmishes of the trade war, writes Alan Beattie.

And here’s what else we’re keeping tabs on today:

• Air India plane crash: A flight to London Gatwick airport has crashed in Ahmedabad in western India shortly after take-off. Here’s the latest.

• Economic data: The US publishes May producer price index inflation data a day after it was confirmed that the annual consumer price index rose less than expected in May.

• Companies: Adobe is expected to report a rise in second-quarter revenue thanks to strong demand for its artificial intelligence-integrated photography, illustration and video software. BlackRock hosts an investor day in New York.

• Congress: New York governor Kathy Hochul, Minnesota governor Tim Walz and Illinois governor JB Pritzker testify before the House oversight committee on their policies regarding undocumented migrants.

The FT will host its annual Future of Asset Management North America event in October with senior executives and leading asset managers attending. Find out more.

Five more top stories

1. Oil prices jumped yesterday amid fears of an escalation in Middle East tensions, after the US ordered dependants of service members in parts of the region to leave. The rise in crude prices came hours after Trump said he was now “less confident” of a nuclear deal with Iran.

2. The board of the Fulbright Program has resigned in protest at what it has described as political interference from the Trump administration. Political appointees at the state department had cancelled Fulbright scholarships for dozens of academics and students, mainly on the basis of their research topics, people familiar with the matter said. Here’s more from the board’s statement.

3. The Pentagon has launched a review of the 2021 Aukus nuclear submarine deal with the UK and Australia to determine whether to scrap the project, according to people familiar with the matter. The move has triggered anxiety in London and Canberra, as ending the agreement would destroy a pillar of security co-operation between the allies.

4. A jury convicted Harvey Weinstein of one sexual assault charge but acquitted him of another, delivering a split verdict in his retrial on sexual assault accusations spanning his career as a Hollywood producer. The jurors have not yet reached a decision on a third charge of rape against the former Miramax studio chief. Jurors will reconvene today to break the deadlock.

5. City of London groups are pushing staff to return to the office more frequently, with Deutsche Bank, UBS, Peel Hunt and others tightening work from home rules. The shift to more office attendance and a return to pre-pandemic working patterns is at the centre of a fight for office space and talent.

• Apollo: The investment group is delaying recruiting junior bankers until next year, after tensions between banks and the private equity sector over securing young talent.

Today’s big read

Stablecoins were created to boost trading in cryptocurrency markets, enabling buying and selling without the use of a bank. Until recently, ease of use and anonymity made them a de facto currency reserve for crypto traders and a conduit for crime including drug trafficking and money laundering. But helped by the return of Donald Trump to the White House stablecoins are becoming increasingly mainstream — a development that could have profound implications for the global financial system.

We’re also reading . . . 

• The dollar: The weakening US currency has turned fund managers everywhere into currency traders, writes Katie Martin — whether they like it or not.

• UK spending review: After nearly a year, Labour has made its big play, writes Robert Shrimsley. So why are some of us not immediately convinced?

• AI sycophants: OpenAI, Google DeepMind and Anthropic are all stepping up efforts to tackle a growing problem: chatbots telling people what they want to hear.

• Starbucks: The coffee shop chain has promised “the biggest human capital investment in connection” in its history. Will its big bet on baristas pay off?

Chart of the day 

Investors are pouring money into silver and platinum as they seek “gold alternatives” amid growing concerns that the haven is overvalued. Both metals are up more than 10 per cent this month.

Take a break from the news

From the Tour de France in Scotland to the Saudi Arabian Grand Prix, tourist boards are discovering the benefits of luring big-name sporting events from their traditional homes. Sports tourism is now one of the fastest-growing segments in travel. But will it last?