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China sanctions Trump Commerce Secretary Wilbur Ross

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China said Friday it has sanctioned seven people, including former Trump Commerce Secretary Wilbur Ross, in response to U.S. penalties imposed on Chinese officials over Beijing’s clampdown on democracy in Hong Kong. 

The reciprocal sanctions were imposed under China’s new Anti-Foreign Sanctions Law, which was passed in June. The sanctions are a response to the United States’ recent warning to companies about the risks of doing business in Hong Kong.

They also came days before Deputy Secretary of State Wendy Sherman is to visit China, making her the most senior U.S. official to visit China during the Biden administration. 

In addition to Ross, others sanctioned include Carolyn Bartholomew, chair of the U.S.-China Economic Security Review Commission; Jonathan Stivers, former staff director of the Congressional Executive Commission on China; and Sophie Richardson, Human Rights Watch’s China director. 

Also sanctioned were DoYun Kim at National Democratic Institute for International Affairs; Adam Joseph King, senior program manager of the International Republican Institute and the Hong Kong Democratic Council. 

Ross, a billionaire businessman and investor, has done business in China. As Commerce secretary, he was one of the faces of former President Donald Trump’s trade war with China.

“I would like to stress once again that Hong Kong is China’s Special Administrative Region and its affairs are an integral part of China’s internal affairs,” Foreign Ministry spokesperson Zhao Lijian said in a statement. “Any attempt by external forces to interfere in Hong Kong’s affairs would be as futile as an ant trying to shake a big tree.”

White House press secretary Jen Psaki said at a Friday press briefing that the U.S. is aware of China’s newest sanctions.

“We are undeterred by these actions and we remain fully committed to implementing all relevant U.S. sanctions on authorities,” Psaki said at the briefing. “These actions are the latest examples of how Beijing punishes private citizens, companies and civil society organizations as a way to send political signals and further illustrates the PRC’s deteriorating investment climate and rising political risks.”

Psaki said it follows China’s “baseless sanctioning” of two commissioners from the U.S. Commission on International Religious Freedom in March, 28 U.S. officials in January as well as sanctions on U.S. officials and organizations in July 2020. 

The Chinese Embassy in Washington didn’t immediately respond to a request for comment. The State Department did not immediately respond to CNBC’s request for comment.

Lijian said Friday that China “firmly opposes and strongly condemns” the Biden administration’s issuance of the Hong Kong Business Advisory last week, which warns that U.S. firms are facing several risks posed by China’s sweeping national security law in Hong Kong. 

“These acts gravely violate international law and basic norms governing international relations, and severely interfere in China’s internal affairs,” Lijian said in the statement. 

China’s national security law was passed in June 2020 and has been condemned by Washington for aiming to limit Hong Kong’s autonomy and banning literature that is critical of the Chinese Communist Party. 

A Biden administration advisory, published jointly by the departments of State, Treasury, Commerce and Homeland Security, says businesses face risks of warrantless electronic surveillance, surrendering data to authorities and “restricted access to information.”

It also sanctioned several Chinese officials with Beijing’s liaison office in Hong Kong for limiting autonomy in the territory. 

“Beijing has chipped away at Hong Kong’s reputation of accountable, transparent governance and respect for individual freedoms, and has broken its promise to leave Hong Kong’s high degree of autonomy unchanged for 50 years,” Secretary of State Antony Blinken said in a statement about the advisory. 

The Hong Kong warning came days after the Biden administration issued a similar advisory for firms with businesses and operations in Xinjiang province, where there is growing evidence that the Chinese government has carried out genocide and other human rights abuses against Uyghurs and other Muslim minorities.

The relationship between Beijing and Washington became even more strained under the Trump administration, which provoked a trade war and worked to ban Chinese technology companies from doing business in the U.S. 

Biden has previously said that his approach would differ from his predecessor’s, stating that he would work closely with allies to push back against Beijing.

The Chinese sanctions on Ross came soon after the Department of Justice declined to prosecute him for allegedly misleading Congress about census citizenship questions.

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All-electric aircraft from Rolls-Royce completes maiden flight

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Matt Cardy | Getty Images News | Getty Images

Rolls-Royce’s first all-electric aircraft has completed its maiden flight, soaring across skies in the U.K. for around 15 minutes this week.

In a statement, the company said the aircraft’s trip on Wednesday marked “the beginning of an intense flight-testing phase” that would involve the collection of performance data on its electrical power and propulsion system.

According to Rolls-Royce, the airplane — dubbed the “Spirit of Innovation” — utilized a 400 kilowatt electric powertrain “with the most power-dense battery pack ever assembled for an aircraft.” Eventually, the firm wants the aircraft’s speed to exceed 300 miles per hour.

The Spirit of Innovation is the result of a program called ACCEL, or Accelerating the Electrification of Flight. Partners in the initiative include electric motor and controller specialist YASA and Electroflight, which Rolls-Royce described as an “aviation start-up.” YASA is a wholly-owned subsidiary of Mercedes-Benz.

In terms of funding, 50% has come from the Aerospace Technology Institute in partnership with the U.K. government’s Department for Business, Energy & Industrial Strategy and Innovate U.K.

In a statement issued alongside Rolls-Royce’s announcement, U.K. Business Secretary Kwasi Kwarteng said the aircraft’s flight was “a huge step forward in the global transition to cleaner forms of flight.”

Read more about electric vehicles from CNBC Pro

The environmental footprint of aviation is significant. According to the International Energy Agency, carbon dioxide emissions from aviation “have risen rapidly over the past two decades,” hitting almost 1 metric gigaton in 2019. This, it notes, equates to “about 2.8% of global CO2 emissions from fossil fuel combustion.”

Elsewhere, the World Wildlife Fund describes aviation as “one of the fastest-growing sources of the greenhouse gas emissions driving global climate change.” It adds that air travel is “currently the most carbon intensive activity an individual can make.”

Looking ahead, Rolls-Royce — not to be confused with Rolls-Royce Motor Cars, which is owned by BMW —said it would use and apply tech from ACCEL in products connected to the commuter aircraft and electric vertical takeoff and landing markets.

Alongside aircraft manufacturer Tecnam, Rolls-Royce is also working with Norway-headquartered airline Wideroe on the delivery of “an all-electric passenger aircraft for the commuter market.”

The last few years have seen a number of companies attempt to develop plans and concepts related to low and zero-emission aviation.

Last September, for instance, a hydrogen fuel-cell plane capable of carrying passengers took to the skies over England for its first flight.

The same month also saw Airbus release details of three hydrogen-fueled concept planes, with the European aerospace giant claiming they could enter service by 2035.

Back in 2016, the Solar Impulse 2, a manned aircraft powered by the sun, managed to circumnavigate the globe without using fuel. The trip was completed in 17 separate legs.

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Retail sales post surprise gain as consumers show strength despite delta fears

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Retail sales posted a surprise gain in August despite fears that escalating Covid cases and supply chain issues would hold back consumers, the Census Bureau reported Thursday.

Sales increased 0.7% for the month against the Dow Jones estimate of a decline of 0.8%.

A separate economic report showed that weekly jobless claims increased to 332,000 for the week ended Sept. 11, according to the Labor Department. The Dow Jones estimate was for 320,000.

Economists had expected that consumers cut back their activity as the delta variant continued its tear through the U.S. Persistent supply chain bottlenecks also were expected to hold back spending as in-demand goods were hard to find.

The pandemic’s impact did show up in sales at bars and restaurants, which were flat for the month though still 31.9% ahead of where they were a year ago.

However, sales were strong for most areas during the month, when back-to-school shopping generally results in a pickup in activity, especially so this year as schools prepared to welcome back students after a year of remote learning.

The headline number would have been even better without a 3.6% monthly drop in auto-related activity; excluding the sector, sales rose 1.8%, also well above the 0.1% expected gain.

With fears rising over the pandemic, shoppers turned online, with nonstore sales jumping 5.3%. Furniture and home furnishing also saw a healthy 3.7% increase, while general merchandise sales increased 3.5%.

Electronics and appliances stores saw a 3.1% drop, while sporting goods and music stores fell 2.7%.

The numbers overall reflected a more resilient consumer, with sales up 15.1% from the same period a year ago.

The retail upside surprise was tempered slightly with a disappointing read on jobless claims.

Initial filings increased 20,000 from a week ago after posting a fresh pandemic-era low. Still, the four-week moving average, which accounts for weekly volatility, declined to 335,750, a drop of 4,250 that brought the figure to its lowest point since March 14, 2020, at the pandemic’s onset.

The claims total came under heavy seasonal adjustments, as the unadjusted figure showed a drop in filings of 23,331 to 262,619.

Continuing claims also declined, falling by 187,000 to 2.66 million, also a new low since Covid hit. The four-week moving average nudged lower to about 2.81 million.

However, those receiving compensation under all programs actually increased just ahead of the expiration of enhanced federal jobless benefits. That total, though Aug. 28 and thus before the expiration, rose by 178,937 to 12.1 million.

In a separate economic report, the Philadelphia Federal Reserve reported that its manufacturing activity index rose 11 points to 30.7, representing the percentage difference between firms reporting expanding activity against those seeing contraction. That number was well ahead of the Dow Jones estimate of 18.7.

This is breaking news. Please check back here for updates.

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StanChart chairman still sees opportunity in China as regulations tighten

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Tourists visit the Bund waterfront area on May 10, 2021 in Shanghai, China.

Wang Gang | Visual China Group | Getty Images

But overall, I think China continues to be a tremendous source of opportunity for the private sector.

Jose Vinals

Chairman of Standard Chartered

“There’ve been some articles in the media about — is China becoming uninvestable? I don’t think so,” Jose Vinals told CNBC’s Hadley Gamble on Wednesday.

A number of sectors may be “a little bit more challenged now” and investors need to look more carefully at what investments they are making, he said.

“But overall, I think China continues to be a tremendous source of opportunity for the private sector,” he said, pointing out Beijing has slowly opened up its financial sector, granting some international firms access.

The regulatory crackdown in China has been interpreted differently by big names in the financial world, including Ray Dalio, George Soros and David Roche.

Inflation expectations

Separately, Vinals said he doesn’t expect inflation to be a big problem.

“I still subscribe to the view that inflation that we’re seeing in the United States and in other Western countries in particular … has an important transitory component,” he said.

Read more about China from CNBC Pro

Fed Chair Jerome Powell similarly believes that inflation will soon subside and has said he wants to see more strong employment reports before the central bank starts paring back its bond purchases.

Vinals said many Western countries are operating below their maximum economic potential, adding the Federal Reserve is likely to hike rates early next year.

“My baseline is that inflation will not be a big problem. But there is a risk that it may become more of a problem than we think,” he said, acknowledging that it would “complicate things” for the world.

“But I see [inflation] more as a downside risk to the global economic recovery, than as the base case for the economic outlook,” he said.

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