A group of nine Nvidia employees, including one senior manager, have been charged in for smuggling B300—one of Nvidia’s top-tier chips—to China, in violation of US export controls. The charge was handed down by a court in Keelung, Taiwan, where many Nvidia chips are manufactured. 

Nvidia chips have been finding their way into China for a while now, despite a US ban on the export of top-tier tech. Earlier in the year, it was alleged that DeepSeek had been using Nvidia’s most powerful chip—the Blackwell—to train its AI models at a facility in China’s Inner Mongolia region. It was reported in June that the US government was cracking down on loopholes that were allowing chips and other tech to reach China via third-country intermediaries. This recent court ruling represents the first charges brought against individuals violating the export controls.

It is not known what steps Nvidia itself is taking to prevent its staff from engaging in such illicit activity, but the fact that one of the individuals charged was a member of senior management should be serious cause for concern for the company. Nvidia is walking a tightrope, as China presents a huge market to sell all sorts of technology, but as an American company, he also has a responsibility to comply with the regulations set out by Washington.

Beijing has ordered any entities associated Chinese retail giant JD.com to refuse cooperation with an EU probe into whether the company has unfairly benefited from subsidies ahead of its planned acquisition of German electronics retailer Ceconomy. This comes as the bloc is increasing scrutiny of Chinese companies operating within the European market.

China-EU tensions have been intensifying over the past couple of years, with Brussels taking particular aim at the EV and e-commerce markets. Shein, Alibaba and Temu have all faced huge fines in the tens and even hundreds of millions of Euros over various issues relating to their products and environmental impact. Chinese EVs are also being hit with tariffs due to allegations of flooding the market. In the majority of cases, the EU is under the impression that Chinese businesses operating in Europe are unfairly benefiting from subsidies that enable them to undercut local competition. 

Regulatory frameworks governing things such as trade and international law have been developed over long periods of time to ensure there is a level playing for all parties involved, but such a framework only works when all sides agree to the rules laid out. The fact that Beijing is ordering companies not to cooperate with investigations could tend to strengthen the assumption of problems. The EU has to a large extent turned a blind eye for the past two decades, and as a result it faces a choice: whether or not to get tough in terms of China and its exports and investments.

China’s domestic demand continued to weaken in July, with retail sales seeing growth of only 0.6% year on year, missing analysts’ more optimistic forecasts of 1.3% and down from the previous month of June, which saw growth at 1%. This comes shortly after the Q2 GDP growth rate was reported by Beijing as being only 4.3%, down from the 5% reported for Q1 and short of the governments’ target of 4.5-5% for the year.

There has been much talk recently of China having a K-shaped economy—one part pointing up, which refers to industries doing very well, such as AI, robotics, batteries and other tech, and the other part pointing down, which is mainly the basic domestic economy. And this downward pointing part appears to be getting ever steeper.

Domestic demand has been on the lips of policymakers for a long time, and boosting it is a prominent part of the government’s current Five-Year Plan. Yet growth in retail—which is perhaps the biggest key indicator of consumer demand—is continuously slowing. In 2025, subsidies offered some short-term relief, but as they dried up, so did the Chinese public’s willingness to spend. Policymakers have put much emphasis on the development of robotics and increasing automation in factories: as we have said time and time again, this helps boost manufacturing capacity does it does nothing for spending. 

Reuters is reporting that the US is preparing to tell its partners they will be excluded from any American AI initiatives if they also sign up to cooperate with China. This comes not long after Beijing announced a cooperation organization drawing in member states particularly from the Global South.

The move to force countries to pick a side would be something of a gamble for the US, and the risk is that it inadvertently sends potential partners China’s way. Nobody wants to be limited to the use of just one set of technology—there are advantages that the models of both sides possess, and an open market provides an environment in which a user can choose what is best for their needs, and therefore encourages more healthy competition. China is not known to have made any such ultimatum to potential partners.

The US may be ahead in terms of the highest levels of tech capabilities, but one direction for the future may be be downloadable LLMs—meaning they can be used offline—in which Chinese players such as Alibaba’s Qwen, DeepSeek, GLM and Moonshot AI’s Kimi are the current leaders. Many of these are also open-weight, which means the model can be modified by developers for their own use—although they stop short of sharing the full data which would allow them to be reverse engineered. These advantages may be particularly attractive to the Global South, where resources can be more limited but there is still a huge demand for AI software. 

The US is considering a ban on the import and sale of drones made by Texas-based Anzu Robotics, stating that the company has technological ties to a restricted entity, which is understood to be China’s DJI. If the move goes ahead, this will see an extension of Washington’s ban on foreign drone technology, and would suggest that regulators are prepared to target any American-registered companies they suspect are acting as intermediaries for Chinese firms.

Drones are one of the major frontier technologies, and while they might not get as much attention as AI, EVs or robots, their applications both commercially, and militarily are numerous. Drones, much like EVs, can also collect huge amounts of data, which can have the potential to be transmitted and reused. This is the basis for Washington’s security concerns.

The concern regarding Anzu Robotics is that despite being a Texas-registered company, its drones are manufactured in Malaysia, and it is alleged that the company is using DJI parts from China in that process. Earlier this year, when banned Nvidia chips found their way into Chinese labs, it was also alleged they had done so via a Malaysian intermediary.  There will always be loopholes and workarounds for import and export controls, and so tightened regulatory scrutiny will come as no surprise.