Chinese authorities have asked state-owned firms to allow their contracts with the Big Four accounting firms to expire. According to sources, Beijing has been looking to limit the influence of the U.S.-linked global auditing firms on Chinese businesses and secure the country’s financial data. China also aims to bolster its local accounting industry. More: - Chinese state-owned entities are urged to use local Chinese or Hong Kong accountants when their contracts with the Big Four firms expire.
- Offshore subsidiaries can still use U.S. auditors.
- The move comes after Beijing reached a landmark deal with the U.S. last year to allow U.S. audit inspections on hundreds of Chinese firms listed in New York.
- No deadline has been set for Chinese firms to make the change.
- The Big Four accounting firms are PWC, Ernst & Young, KPMG, and Deloitte.
- According to China’s finance ministry, the Big Four firms earned a combined revenue of 20.6B yuan ($3B) from all Chinese clients in 2021.
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In a preliminary report, the National Transportation Safety Board (NTSB) pointed to an overheated wheel bearing on the Norfolk Southern train as a possible cause for the derailment that released toxic chemicals in East Palestine, Ohio. Federal authorities did not provide the exact cause of the derailment but outlined several operational concerns. More: - The report said a surveillance video from a local residence showed what appeared to be a wheel bearing in the final stage of overheat failure moments before the derailment.
- The NTSB has collected the wheel bearing and affected wheelset as evidence and will examine the parts.
- Future investigative activity will focus on the wheelset and bearing, tank car design and maintenance procedures, derailment damage, inspection practices, and a review of the accident response.
- According to the report, the incident occurred around 9 p.m. local time on Feb. 3.; an eastbound Norfolk Southern freight train traveling about 47 miles per hour derailed.
- The speed limit is 50 miles an hour.
- Thirty-eight railcars derailed in the incident, including 11 tank cars carrying hazardous materials that subsequently ignited.
- Chemicals on the train included vinyl chloride, a highly flammable carcinogen.
- A one-mile evacuation zone was implemented after the derailment, impacting up to 2,000 residents.
- No fatalities or injuries were reported.
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The U.S. aims to use the $53B Chips Act to create at least two semiconductor manufacturing clusters in the country by 2030. At a press briefing on Wednesday, Commerce Secretary Gina Raimondo said the goal is to create ecosystems that would bring together fabrication plants, research-and-development labs, final packaging facilities for the assembly of chips, and the suppliers needed to support each phase of the operation. More: - Secretary Raimondo is scheduled to outline the plans in a speech at Georgetown University on Thursday.
- Raimondo added that the U.S. would design and produce the world’s most advanced semiconductor chips by 2030.
- Next week, the Commerce Department will share more details on how companies can apply for funds.
- Raimondo did not share where the clusters would be located; however, Arizona, Ohio, and Texas are viewed as the likely locations based on investment plans by the companies that currently produce leading-edge chips — Intel, Samsung, and TSMC.
- President Biden signed the Chips Act into law in August 2022.
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According to sources, Apple has made significant progress in its watch's no-prick blood glucose tracking technology. The project, dubbed E5, has been underway for over a decade and aims to measure how much glucose is in a person's body without needing to prick the skin for blood. More: - According to sources, Apple has hit significant milestones in the project and believes it could eventually bring the glucose-monitoring device to market.
- Apple is employing a chip technology known as silicon photonics and a measurement process called optical absorption spectroscopy to replicate the results.
- Apple engineers are working to develop a prototype device about the size of an iPhone that can be strapped to a person's bicep.
- An early version of the technology sat atop a table.
- About 1 in 10 Americans have diabetes and typically rely on a device that pricks the skin for a blood sample to test their glucose levels.
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The European Commission has asked its staff to uninstall the TikTok social media app from their corporate and personal devices over safety and security concerns. Starting March 15, EU staff members cannot use TikTok on devices that use the commission’s apps like Skype for Business or the commission’s internal email. More: - According to a memo sent to the staff, the move aims to protect Commission data and systems from potential cybersecurity threats.
- TikTok is owned by Chinese firm ByteDance.
- In December, the U.S. Senate passed the No TikTok on Government Devices Act, legislation banning TikTok on U.S. government devices.
- Missouri Republican Sen. Josh Hawley authored the bill.
- On Dec. 30, the U.S. House of Representatives also banned TikTok on all House-managed devices.
- U.S. officials have expressed concerns that TikTok’s user data could end up in the hands of the Chinese government due to that country’s influence over TikTok’s parent, ByteDance.
- Responding to the EU’s recent ban on the app for commission staff members, TikTok said it was disappointed with the decision, which it believed to be misguided and based on fundamental misconceptions.
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Alibaba released its December quarter earnings on Thursday, topping analysts' expectations. The Chinese eCommerce giant reported 247.76B yuan ($35.92B) in revenue, up 2% YoY. Net income came in at 46.82B yuan ($6.79B), up 69% YoY. Earnings per American depositary share was 19.26 yuan ($2.79), 14% YoY. More: - Alibaba's commerce division reported 169.99B yuan ($24.61B) in revenue, down 1% YoY.
- During the December quarter, China ended its strict COVID-19 policies and reopened the economy.
- The effects of these changes are not likely reflected in these earnings.
- Roughly $600B has been wiped off the market value of Alibaba since its peak in October 2020 due to strict COVID-19 policies and the government's crackdown on the tech sector.
- Analysts expect Alibaba to see increased revenue growth in the coming quarters as the full effect of the end of the COVID-19 policies is felt.
- Alibaba CEO Daniel Zhang expects consumer sentiment and economic activity to recover this year.
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- President Joe Biden plans to nominate former Mastercard CEO Ajay Banga to be the next president of the World Bank. Banga currently serves as vice chairman at U.S. investment firm General Atlantic.
- FTX founder Sam Bankman-Fried has been hit with four additional criminal charges related to commodity fraud and making unlawful political contributions. Bankman-Fried now faces 12 federal charges related to the sudden collapse of crypto firm FTX and its sister company Alameda Research.
- Friday, Feb. 24, will mark the first anniversary since the start of the Russia-Ukraine conflict.
- The U.S. plans to deploy between 100 and 200 troops to Taiwan in the coming months to support a training program for the island’s military.
- In recent weeks, Netflix has cut the price of its subscriptions in more than 30 countries. Locations that received the recent price cuts are Middle Eastern countries, including Yemen, Jordan, Libya, and Iran; sub-Saharan African markets, including Kenya; and European countries, such as Croatia, Slovenia, and Bulgaria.
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 |  | Vanessa Omeokachie writes the daily Inside Business newsletter. Her interests include finance, technology, and entrepreneurship. In her free time, she enjoys reading, hiking, attending concerts and music festivals, traveling, and exploring. Connect with her on Twitter @VanessaOmeo or on LinkedIn. |   | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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