Hours after Taiwan Semiconductor Manufacturing Co (TSMC) on Friday confirmed it plans to build a 5-nanometer chip factory in Arizona, with mass production expected to begin in 2024, the US government announced new export restrictions to stop foreign semiconductor manufacturers who rely on US software and technology from shipping products to Chinese tech giant Huawei Technologies Co without first obtaining a license from US authorities.
Analysts have said that the new restrictions could enable the US to block the sale of TSMC semiconductors for Huawei’s HiSilicon Technologies Co unit, which designs chips for the Chinese company, potentially affecting its smartphone launches and delivery of 5G equipment.
The White House’s drive to push companies to invest and operate in the US — including the new US$12 billion pledge from TSMC — combined with the US’ tighter export restrictions, increasing pushback against the Chinese Communist Party’s pandemic propaganda, and US President Donald Trump’s harsher tone with Beijing, show that the relationship between the US and China is growing increasingly intense, and the possibility of them decoupling is growing. In an interview with Fox Business on Thursday, Trump even said that the US “could cut off the whole relationship” with China and that he was in no mood to talk with Chinese President Xi Jinping (習近平).
A complete decoupling between the two largest economies is not attainable in the short term, given their close relations and interdependence in terms of trade, production and geopolitics. However, the trend has been slowly emerging since the beginning of the US-China trade dispute in 2018, and has been greatly exacerbated by the emergence of COVID-19, especially considering China’s handling of the pandemic. Not only have US and other foreign companies started to pull away from China, but the US government has considered offering subsidies to firms moving production out of China. Trump last month even threatened to terminate the “phase one” trade deal with China if Beijing fails to meet all of his administration’s demands.
A report released on Monday last week by the National Committee on US-China Relations and the Rhodium Group consultancy said that two-way investment between the countries last year fell to a seven-year low, and their relationship could worsen, given the political frictions between them, regulatory tightening in both countries and changing market dynamics. Moreover, Reuters reported that the US Federal Retirement Thrift Investment Board, which oversees a government retirement fund, on Wednesday announced that it would indefinitely delay plans to invest in Chinese equities due to White House pressure. As well as pushing US companies to bring production back from China, the US government is stepping up its efforts to cut links with the country in terms of capital and supply chains.
Trump’s decision on Wednesday to extend for another year an executive order banning US companies from using telecom equipment made by firms seen as a national security risk — US lawmakers have referred to China’s Huawei and ZTE Corp — the latest export rules and the move to bring chip fabrication back to the US with the help of TSMC all reflect the Trump administration’s concerns about security. Washington views Huawei as part of a broader trade deal with Beijing and is trying to combat China’s global influence economically and technologically.
Talk of a complete decoupling between the US and China might be far-fetched, but hostilities are escalating, which Taiwanese businesses and the government should not take lightly.
Late last month, Beijing introduced changes to school curricula in the Inner Mongolia Autonomous Region, requiring certain subjects to be taught in Mandarin rather than Mongolian. What is Chinese President Xi Jinping (習近平) seeking to gain from sending this message of pernicious intent? It is possible that he is attempting cultural genocide in Inner Mongolia, but does Xi also have the same plan for the democratic, independent nation of Mongolia? The controversy emerged with the announcement by the Inner Mongolia Education Bureau on Aug. 26 that first-grade elementary-school and junior-high students would in certain subjects start learning with Chinese-language textbooks, as
There are worrying signs that China is on the brink of a major food shortage, which might trigger a strategic contest over food security and push Chinese President Xi Jinping (習近平), already under intense pressure, toward drastic measures, potentially spelling trouble for Taiwan and the rest of the world. China has encountered a perfect storm of disasters this year. On top of disruption due to the COVID-19 pandemic, torrential rains have caused catastrophic flooding in the Yangtze River basin, China’s largest agricultural region. Floodwaters are estimated to have already destroyed the crops on 6 million hectares of farmland. The situation has been
In 1955, US general Benjamin Davis Jr, then-commander of the US’ 13th Air Force, drew a maritime demarcation line in the middle of the Taiwan Strait, known as the median line. Under pressure from the US, Taiwan and China entered into a tacit agreement not to cross the line. On July 9, 1999, then-president Lee Teng-hui (李登輝) described cross-strait relations as a “special state-to-state” relationship. In response, Beijing dispatched People’s Liberation Army (PLA) aircraft into the Taiwan Strait, crossing the median line for the first time since 1955. The PLA has begun to regularly traverse the line. On Sept. 18 and 19, it
Midday in Manhattan on Wednesday, September 16, was sunny and mild. Even with the pandemic’s “social distancing” it was a perfect day for “al fresco” dining with linen tablecloths and sidewalk potted palms outside one of New York City’s elegant restaurants. Two members of the press, outfitted with digital SLR cameras and voice recorders, were dispatched by The Associated Press to cover a rare outdoor diplomatic meeting on one of these New York streets. American diplomat Kelly Craft, Chief of the United States Mission to the United Nations, lunched in the open air with Taiwan’s ambassador-ranked representative in New York, James