China, signalling thaw with US over trade, approves Toshiba chip deal
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China, signalling thaw with US over trade, approves Toshiba chip deal

Chinese officials have finally approved Toshiba's sale of a majority stake in its lucrative microchip unit to a US-led group, a move that could signal an easing of the simmering trade tensions between Washington and Beijing.

A lack of approval by Chinese regulators had held up the deal for months. The delay was widely seen as a sign from Beijing of the ways it could punish US businesses if the Trump administration followed through on threats to impose tariffs on $US150 billion ($199 billion) in Chinese-made goods.

In a statement on Thursday, Toshiba said it had received "all required antitrust approvals" for the deal with a consortium led by the US investment firm Bain Capital. Bain confirmed in its own statement that Chinese authorities had approved the deal.

Chinese officials could not be reached for comment late on Thursday, and the country's official media and websites were silent on the matter. The reasons for the approval after the lengthy delay were not immediately clear.

The approval is likely to be viewed as a positive sign by the Trump administration, and it suggests the two countries are seeking ways to defuse tensions and reach a deal. A senior Chinese government official, Liu He, is in Washington for trade talks this week.

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The approval of the Toshiba deal came just days after the White House appeared to make its own peace offering to Beijing.

President Donald Trump, in a surprise tweet on Sunday, said he had asked US officials to find a way to help ZTE, a Chinese telecommunications company.

Officials in Washington last month prohibited US companies from selling much-needed technology to ZTE to punish the Chinese company for violating US sanctions against selling goods made in the United States to Iran, North Korea and other countries. ZTE's factories ground to a halt, spurring anger from Beijing.

China's approval raises questions about another big deal before antitrust regulators: Qualcomm's $US44 billion purchase of NXP Semiconductors, a company based in the Netherlands. That deal has also been long delayed pending Chinese approval, stirring speculation that Beijing was looking for ways to warn Washington of the potential consequences for a full-blown trade war.

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The Toshiba deal's approval will most likely be a big relief for the Japanese conglomerate, which once symbolised the country's technological might but more recently has been scrambling to survive.

After months of difficult negotiations, Toshiba reached a deal in September to sell most of its lucrative microchip business to a group led by Bain Capital. The deal would give Toshiba $US14 billion in cash it desperately needs after a bad bet on nuclear power. Toshiba officials could not be reached for comment late on Thursday.

The Toshiba chip business had been one of the company's crown jewels. It makes a type of microchip, called NAND flash memory, that cellphones and digital devices use to store data. The business is profitable and attracted considerable interest from buyers.

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Bain and Toshiba are not Chinese companies, but antitrust regulators in China still have considerable say over whether the deal goes through. Like American and European regulators, Chinese antimonopoly officials can punish foreign companies through fines or other measures if they believe a deal beyond China's borders will give the new business too much market power.

China has been flexing those relatively new regulatory muscles in recent years as it becomes a major consumer of the world's goods.

New York Times

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