Former aide to NY governor charged with acting as an agent of China

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Good morning. Today we’re covering:

• Huawei’s bug-ridden AI technology

• A US stock market sell-off

• How China’s coastguard is policing the ocean

But first, a former adviser to New York governor Kathy Hochul has been charged with acting as an unregistered agent for China, allegedly using her position to “further the interests of the Chinese government”.

Linda Sun, a 41-year-old Chinese-born American citizen who also worked in former governor Andrew Cuomo’s administration, is accused in a federal criminal indictment of attempting to make her bosses’ public statements more favourable to the Chinese at Beijing’s behest; of arranging visits for Chinese officials; and sidelining diplomatic approaches to the governor’s office from Taiwanese representatives in the US.

She is further accused of removing references to “Republic of China”, Taiwan’s official name, from a statement made by Cuomo saluting US and Taiwanese troops, and obtaining fake letters from Hochul’s office inviting Chinese government officials to New York, which were allegedly fraudulently used by a visiting delegation to obtain US visas.

Sun was arrested yesterday and charged alongside her husband, Chris Hu, an American citizen who ran a seafood export business in New York City, among other enterprises. They are accused of receiving substantial economic benefits in exchange for illegal work, including “the facilitation of millions of dollars in transactions” for Hu’s China-based business activities.

Read more details from the indictment.

Here’s what else I’m keeping tabs on today:

• Economic data: Australia publishes second-quarter growth figures. S&P Global services PMI is due for several countries including China, India, Japan and Singapore.

• Eastern Economic Forum: Russian President Vladimir Putin holds a plenary session with Malaysian Prime Minister Anwar Ibrahim and Chinese vice-president Han Zheng.

Five more top stories

1. Exclusive: China’s efforts to match US computing power in artificial intelligence are being hampered by bug-ridden software. Customers of leading AI chipmaker Huawei have complained of performance issues and the difficulty of switching from Nvidia products.

2. Big tech groups including Nvidia led a broad US stock market sell-off yesterday, as the S&P 500 suffered its worst day since a bout of global volatility in early August. Here’s what prompted the market drop.

3. China has said it will open an anti-dumping probe into Canadian canola exports. The move came after Ottawa’s decision last week to raise tariffs on Chinese steel and electric vehicles.

4. TotalEnergies has struck a new deal with a green energy division of Indian billionaire Gautam Adani’s conglomerate and will invest $444mn in a joint portfolio of solar power projects. The French oil and gas major has pursued collaborations with the Adani Group despite last year’s fraud allegations from US short seller Hindenburg Research.

5. The biggest shake-up of Ukraine’s wartime government began yesterday, with President Volodymyr Zelenskyy saying a series of resignations among the country’s ministers was part of an effort to “give new strength” to the country’s institutions.

Feel better informed on the events shaping your world with our relaunched newsletter Newswrap. Darren Dodd, a former FT news editor, explains how the biggest stories relate to global economic and business trends. Sign up here to get it delivered three times a week.

News in-depth

China’s coastguard has been the world’s largest for a decade, but the maritime force is increasingly using domestic police powers to enforce Beijing’s vast maritime claims while intimidating its neighbours. “They are everywhere,” said Captain Kentaro Furuya, a professor at the Japan Coast Guard Academy and a former coastguard officer. “They are trying to occupy the ocean as if it were part of their own land territory.”

We’re also reading . . . 

• Mitsubishi: The boss of the trading house has called on the government to help Japanese companies counter increasing Chinese competition in their traditional stronghold of south-east Asia.

• Israel-Hamas war: Israeli Prime Minister Benjamin Netanyahu has remained defiant over a hostage deal with Hamas despite general strike and mass protests.

• Housing costs: Dissatisfaction with housing costs has hit a record high across rich countries, soaring above other worries such as healthcare and education.

Chart of the day

Soaring demand for liquefied natural gas carriers has forced global shipowners to turn to China. But the quality of LNG ships being built at Chinese shipyards, which have limited experience manufacturing the complex vessels, is “a likely concern”, said one expert.

Take a break from the news

Stephen Bush was not impressed with the “expensive special effects” and “CGI trickery” in Alien: Romulus, the new instalment of the epic sci-fi film franchise. But his latest column explains why bad movies prove that profit can be a force for good in the age of costly film and TV.

Additional contributions from Melody Abike Adebisi and Irwin Cruz