彭博：中国AI模型追赶美国，美债回购或推高成本，特朗普威胁对伊经济战，许家印获刑

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This [music] is the Bloomberg Daybreak Europe podcast. Good morning. It's Thursday, the 20th of August. I'm Stephen Carroll in London. Coming up today, Bloomberg analysis shows China's cheaper AI models catching up with their US rivals, but at a fraction of the cost. JPMorgan warns the US Treasury surprise bond purchases could ultimately push borrowing costs higher. Plus, switching to economic warfare, Trump threatens sweeping punishment against Iran's trading partners, pushing Beijing in US crosshairs.

Let's start with a roundup of our top stories. China is rapidly closing the gap with the United States in the race to develop artificial intelligence. Exclusive Bloomberg analysis shows that by several key metrics, Chinese AI models are even taking the lead. A spate of compelling releases from the likes of Moonshot show marked improvements in coding and reasoning. Our Asia tech managing editor, Edwin Chan, says it's about more than just lower prices.

When it comes to the Kimi K3, as well as a plethora of other AI models that were released around the same time, including Z AI's, the GLM, and Alibaba's Qwen, they demonstrated that the gap in performance also was rapidly closing. And I think that was what really triggered this year's debate uh in the US about whether Washington should do more to try and curb that ascent. And I think encouraged within China a domestic push to promote more open weight models, to push adoption rapidly while they have the momentum.

Chan added the Trump administration could face backlash from American businesses in any attempt to rein in the adoption of Chinese AI models. Their rapid progress is a concern for rival US firms OpenAI and Anthropic, which are chasing trillion-dollar valuations in upcoming IPOs. China [snorts] is wielding new legal powers to block EU scrutiny of alleged state support for its companies. Beijing barred organizations from assisting the European Union with its probe of jd.com's planned takeover of German electronics company Ceconomy.

China's Ministry of Justice urged Europe to stop abusing its foreign subsidy tools warning of countermeasures if the block continues to overstep. The dispute marks the latest flare-up between Beijing and Brussels ahead of an October deadline to address record trade imbalances. J.P. Morgan is warning that US Treasury Secretary's surprise move to bring down long-term borrowing costs could actually make things worse. It's got back since Treasury said yesterday it would at least double the size of its bond buybacks effectively buying more of the government's own debt.

That initially sent long-term yields lower, but J.P. Morgan says the move addresses the symptoms rather than the cause of America's ballooning debt pile. The bank warns that without real fiscal consolidation investors could lose confidence and push borrowing costs even higher. And the current is Bloomberg's Federal Reserve reporter.

It's a tactical play, a surprise maneuver coming in using short-term money to buy to buy back longer-term debt to get yields come down. Our yields did come down. 30-year yields were down maybe the best part of 10 basis points. That's okay, but the question mark is how long can that last given the fundamental driver behind the higher yields at the moment is worrying about the amount of borrowing that the US government is doing.

Let me have that figure today make the point that total public debt now is 40 odd trillion dollars and just a reminder that the US fiscal trajectory continues to head in the wrong direction.

As the current was referring to new Treasury Department data as the US government continues to run up deficit of 6% despite an economy near full employment. That creates a wider risk for global markets with higher Treasury yields feeding through to corporate and government borrowing costs around the world. Federal Reserve minutes reveal a deeper split among policy makers than first thought. Several officials favored a rate hike, while many said tighter policy could be needed if inflation remains elevated.

The committee ultimately voted 9 to 3 to keep interest rates unchanged. Mike McKee is our international economics and policy correspondent.

I think what the minutes shows that the committee was much more divided than people had anticipated. The counting words that they used, the adjectives for how many people were on one side or another are much more in evidence in this set of minutes than I think I've ever seen. Especially the words some and several.

Mike McKee says the minutes also show considerable uncertainty over inflation with the renewed Iran war complicating the outlook. US President Donald Trump says that the United States is starting an economic warfare operation against Iran. In a social media post, the president didn't specify exactly what measures would be taken, but warned of tremendous economic consequences. The threat puts the focus on China, which buys the bulk of Iran's oil exports.

Stewart Livingston Wallace, our executive editor for the Middle East, North Africa, and Russia, says the move could be consequential.

I do think it's really interesting this week in particular that you've had this massive pivot. And it's definitely towards something that may not actually be, but certainly looks like secondary sanctions. And that's a really big deal, cuz that's in effect taking on China, Turkey, Oman, Uzbekistan, lots and lots of countries that trade with Iran to some extent. Or at least have historically.

Bloomberg's Stewart Livingston Wallace speaking earlier this morning. The threat signals a shift towards economic pressure after weeks of military strikes and a US blockade have failed to force Iran to capitulate. Trump got a boost in his campaign a day ago when the United Arab Emirates severed economic ties with Iran citing escalations that undermine regional and international peace and security. The UK's Green Party is calling for a windfall tax on banks.

The move from leader Zack Polanski adds to pressure from the left to target the City of London. Bloomberg Exchange Will has more.

Andy Burnham needs cash. Keeping bus fares low, upping defense spending, even paying the higher interest rates on government debt, it all costs money. And for those on the left, Britain's big banks are a natural target. They've made 30 billion pounds in profit so far this year. Bank bosses like Jamie Dimon are warning higher taxes would mean less lending to small businesses and fewer jobs. But with the October budget approaching, Labour are refusing to rule the tax change out.

In London, James Will Bloomberg Radio.

The former chairman of China Evergrande, Hui Ka Yan, has been sentenced to life in prison after pleading guilty earlier this year to a series of financial crimes. Evergrande was once the world's most indebted developer with liabilities exceeding 300 billion dollars. Its collapse helped trigger China's prolonged property slump. The sentence caps the downfall of Hui, who was once Asia's second richest man. And the Duke and Duchess of Sussex are returning to the UK.

The surprise move is set to take place later this month. Bloomberg's Tiwa Adebayo has the story.

It's been over 6 years since Meghan Markle and Prince Harry left the UK and stepped down as working royals. The years following have brought us documentaries, a best-selling memoir, and even a line of signature jams, all from the Sussex's California home. But according to the BBC, the couple are set to shift their base back to the UK in the coming weeks. The news, first reported in The Sun and The Daily Telegraph, is thought to be a surprise to King Charles, who was told about the move last Sunday.

No change to the official status of Prince Harry and Meghan as private individuals is expected and their children are enrolled to start at a British school in September. In London, Tiwa Adebayo, Bloomberg Radio.

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