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The past week saw major technological giants at the centre of the larger US-China geopolitical rivalry, with developments concerning chipmaker Nvidia, TikTok and Google. Interestingly, Google does not even operate as a search engine in China due to the country’s strict online censorship rules.
United States President Donald Trump also announced that he would speak to Chinese President Xi Jinping on Friday (September 19) about a framework negotiated earlier in the week on TikTok, whose parent company has Chinese origins. This would mark the second phone conversation between the leaders since Trump’s second term began in January this year. The last conversation was in June, amid tariff-related tensions.
In other news, China’s National Bureau of Statistics (NBS) released key economic data on Monday, which showed that factory output growth hit a 12-month low. Another key point was the urban unemployment rate, which was at 5.3 per cent, 0.1 percentage points higher than the previous month, and the same level as August 2024.
Here is a closer look at these developments:
The Financial Times reported on Friday that China’s markets regulator, the State Administration for Market Regulation, has decided to terminate its competition investigation against Google. The investigation began in February, examining Google’s Android operating system’s dominance in the market and the impact on Chinese phone makers which use the OS (such as Oppo and Xiaomi).
For reference, Google shut down its search engine in China in 2010 amid censorship demands and was later blocked by the state. However, it still has offices in some key cities and runs its advertising business in the country.
“The decision signals a tactical recalibration by Beijing, which is now concentrating its regulatory firepower on Nvidia, the world’s most valuable chipmaker, as a point of leverage in US-China trade talks, according to the two people,” the FT’s report said.
UPSHOT: China is far from the only country to investigate Google over its market dominance. The US government itself has brought such a legal case against the tech giant, as has India.
However, the context matters in China’s case. Google, as a US tech giant, figures in the larger geopolitical competition. The US is increasingly concerned about maintaining its lead in the realm of technology, given the advancements that China has made in recent years. The second aspect pertains to data security and privacy.
TikTok, which has origins in China but has subsequently seen massive growth in the US market, has drawn suspicions from legislators from both the main political parties on the second issue. After several threats of suspension of its services, as well as extensions under the Trump administration, the matter may soon be resolved.
Negotiators of the US and the Chinese governments met in Spain recently. Trump then posted on Truth Social, “A deal was also reached on a “certain” company that young people in our Country very much wanted to save. They will be very happy! I will be speaking to President Xi [of China] on Friday…” We wrote about the issue earlier this week.
According to the FT report, China’s decision to give relief to Google is linked to the tussle over the US chipmaker company, Nvidia. China was once its major market, and it still does substantial business in the country, but the US government has curtailed its ability to sell advanced chips in China. With the AI race heating up, and Nvidia’s lower-quality technology reportedly aiding the development of the Chinese Large Language Model (LLM) DeepSeek, these restrictions have been strengthened.
Despite the dependence of some Chinese developers on Nvidia hardware, China is now also encouraging the growth of domestic semiconductor manufacturers. Nvidia CEO Jensen Huang recently said he was “disappointed” that China has reportedly ordered its top technology companies to pause purchases. Notably, Nvidia is currently faces an antitrust investigation in China, which we explained here.
According to analysts, the slowing growth in China points to multiple trends that have been observed in recent months — low domestic consumption, global uncertainties impacting manufacturing, and more. “Retail sales, a gauge of consumption, expanded 3.4% in August, the slowest pace since November 2024, and cooling from a 3.7% rise in the previous month,” Reuters reported.
UPSHOT: Policy responses in the form of government stimulus may not be immediately on the horizon. In the first half of the year, China seemed to have performed better than expected in terms of its GDP growth. Still, the same problems prolonging over a long period could cumulatively impact the growth for the whole year.
Among these issues is the high rate of youth unemployment. In 2023, the government announced it would pause the release of data on the subject, pending changes in how the data is compiled. At the time, according to the National Bureau of Statistics, in the first half of 2023, the urban unemployment rate averaged 5.3 per cent. But the unemployment rate among the population aged from 16 to 24 was much higher, at 21.3 per cent.
The rate for 16 to 24-year-olds was 18.9 per cent in August 2025, from 17.8 per cent in July. It marked a high since the methodology was revised. There are several reasons for this, ranging from the relative slowdown in growth compared to the boom period of the 2000s, tight competition for jobs, gruelling working conditions even in white collar jobs, etc.
