Good morning. Fewer U.S. companies are applying to export sensitive technologies to China amid growing government scrutiny of the flow of goods to the country, especially those with potential military applications, a Biden administration official said.

Applications to export sensitive technology and goods to China dropped by 26.2% between 2021 and 2022, according to Thea Rozman Kendler, assistant secretary of commerce for export administration at the Commerce Department’s Bureau of Industry and Security, in prepared remarks delivered before the Senate Banking, Housing and Urban Affairs Committee on Wednesday.

Kendler attributed the decline to the scrutiny the Commerce Department gives to know-your-customer checks and to its guidance on export red flags. “Many U.S. exporters do not submit license applications for transactions they contemplate are likely to be rejected,” she said.

The U.S. in recent months has ratcheted up restrictions on exports of advanced technology to China, including a set of new export restrictions on advanced semiconductors and chip-making equipment imposed in October. Kendler said the restrictions are being imposed with a “scalpel”-like precision to hinder China’s military modernization efforts without unduly interfering with commercial trade.

Jamie Dimon says he never discussed Jeffrey Epstein’s accounts at JPMorgan; Jes Staley says Dimon did

A former top JPMorgan Chase executive said in legal documents that for years he communicated with Chief Executive Jamie Dimon about the bank’s business with convicted sex offender Jeffrey Epstein—setting the stage for a conflict with his former boss, who maintains he had no such conversations.

Jes Staley’s statements, made in documents viewed by The Wall Street Journal that haven’t been made public, are his first remarks to emerge about conversations between him and Dimon regarding Epstein. The bank on Tuesday said Staley’s statements are false.

In the documents, Staley said that Dimon communicated with him when Epstein was arrested in 2006 and in 2008 when Epstein pleaded guilty. Staley also said that Dimon communicated with him various times about whether to maintain Epstein as a client through 2012.

Meta Platforms asks federal court to block FTC in privacy fight

Meta Platforms asked a federal court to block the Federal Trade Commission’s attempt to impose new sanctions on the company for alleged privacy violations, escalating a legal battle that has reopened years-old accusations against the tech giant.

Meta, the owner of Facebook, Instagram and WhatsApp, on Wednesday asked the U.S. District Court for Washington, D.C., to stop a legal proceeding the FTC launched May 3. The agency accused Meta of violating a $5 billion privacy settlement from 2019 and sought to add new prohibitions, such as a ban on the company profiting off data it collects about young users.

Also, Meta is threatening to pull news from its sites in California if the state passes a law requiring technology platforms to pay publishers, the latest in a series of warnings from the company as various governments consider similar legislation.

• Customers pulled $12.9 billion from five crypto platforms in digital runs last year that drained about one-third of the firms’ assets, leading to their bankruptcies, says new research from the Federal Reserve Bank of Chicago. 
   
• Amazon.com agreed Wednesday to pay $30.8 million to settle claims that it improperly retained children’s Alexa voice recordings and allowed employees of its Ring video doorbell unit to surveil customers.
   
• A federal judge ruled that relatives of people who died in a 2019 Boeing 737 MAX crash can seek compensation for the victims’ pain and suffering before the plane slammed into the ground in Ethiopia.
   
• U.S. auto-safety regulators want to mandate automatic emergency braking on nearly all future cars and trucks, a move that they say will help save lives and reduce injuries from car accidents.
   
• Blackstone’s Crown Resorts agreed to a penalty of 450 million Australian dollars (US$294.2 million) over breaches of anti-money-laundering and counterterrorism laws prior to the casino operator’s acquisition by the U.S. asset manager.
   
• Exxon Mobil and Chevron shareholders struck down a raft of proposals urging the companies to cut greenhouse-gas emissions derived from fuel consumption, put out new reports on climate benchmarks and disclose certain oil-spill risks, among other initiatives.
   
• A coastal town in Florida is bringing a mass litigation—and an "existential threat"—to chemical giants. 

U.S. manufacturers seek China alternatives as tensions rise

Fears of military conflict and increasing security worries have some U.S. manufacturers re-evaluating their reliance on China.

Executives are plotting alternate supply chains or devising products that can be made elsewhere should China’s hundreds of thousands of factories become inaccessible. That prospect became more conceivable, they said, after the 2022 invasion of Ukraine prompted companies to sever ties with Russia, sometimes taking huge write-downs.

U.S. companies were further rattled after Chinese authorities recently questioned workers at Boston-based consulting firm Bain & Co. and raided the Beijing offices of Mintz Group, a due-diligence firm based in New York. The government has also barred major Chinese firms from buying products made by U.S. semiconductor company Micron Technology, citing national-security risks.

China’s recovery slows as manufacturing, services pull back

China’s factory activity contracted for a second straight month while growth in the services sector slowed, the latest signs that the country’s reopening growth momentum is struggling to take hold.

Meanwhile, Chinese shares are back in a bear market. The country’s stock market boomed earlier this year, as investors bet on the economy bouncing back after the end of the government’s strict zero-Covid policy, which locked down major cities and proved a drag on economic activity. But the rally didn’t last.

• North Korea’s first military satellite crashed into the Yellow Sea and failed to launch into space, Pyongyang’s state media said, a test that triggered emergency alerts in South Korea and Japan.
   
• Drones struck two oil refineries in southern Russia on Wednesday as Western officials said Moscow was moving to shore up defenses in border areas and along the 900-mile front with Ukraine ahead of a planned counteroffensive by Kyiv.

Hillman, whose appointment is subject to regulatory approval, currently works at life insurer Scottish Widows, where he serves as chief financial officer, and as a finance director at a division of Lloyds Banking Group. Hillman previously worked at Ernst & Young in the firm’s European insurance risk and actuarial practice.

New York Fed names Bloomberg alum as chief risk officer.

The Federal Reserve Bank of New York has appointed Mihaela Nistor as its chief risk officer and head of its risk group. Nistor most recently served as global head of enterprise risk management for financial news and information provider Bloomberg. Before Bloomberg, Nistor was chief risk officer for HSBC Americas Private Banking.

Harvey Pitt, SEC leader during 9/11 and Enron meltdown, dies.

Harvey Pitt ran the U.S. securities regulator from 2001 to 2003 under President George W. Bush, leading the agency’s response to market disruption from the 9/11 attacks and its rule making in the wake of the accounting scandal at Enron. He died Tuesday at the age of 78.

• Russia’s detention in March of Wall Street Journal reporter Evan Gershkovich was a breach of international norms, but it also was the latest chapter in a long history. For more than a decade, Moscow has been expressing outrage over several cases in which the U.S. arrested and convicted Russian citizens for various crimes. Over the past five years, the Kremlin has turned to seizing Americans and trading them to reclaim those prisoners.
   
• Twitter is valued at one-third of what Elon Musk paid for it in October, according to asset manager Fidelity, which again marked down the value of its equity stake in the social-media company.
   
• Student-loan payments and interest accrual will restart this summer, with no further extensions to the pandemic-era pause, under the debt-ceiling deal reached by President Biden and Speaker Kevin McCarthy.

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