The idea of Taiwan as an “economic fortress” is that its economy should be upgraded and the nation be turned into an important global economic hub, so that if that hub is destroyed, it would paralyze the global economy.
Taiwan’s national security would be guaranteed if the world recognized its interconnectedness.
Can Taiwan achieve this? The answer is that over the past two decades, it has laid the foundation. After a major earthquake in central Taiwan on Sept. 21, 1999, the New York Stock Exchange and other global stock markets fell sharply, as investors worried that semiconductor foundries in Hsinchu Science Park were damaged.
Today, more than two decades later, Taiwan’s semiconductor industry has expanded far beyond its past scale. Taiwan Semiconductor Manufacturing Co’s 3-nanometer technology leads the industry worldwide, and its 2-nanometer technology is expected to be available by 2025.
Taiwan’s semiconductor output value exceeds NT$3 trillion (US$105.6 billion), and its global market share has reached 19.9 percent, second only to the US at 42.9 percent.
Taiwan has become an out-and-out “silicon shield.”
The US-China conflict stretches across semiconductors, data, 5G mobile networks, the Internet, artificial intelligence, quantum computing and information technology.
With its Belt and Road Initiative, China seeks to reset the global order based on Chinese standards and challenge the US dominance.
In response to Beijing’s “digital authoritarianism,” the US urgently needs to coordinate with countries that share its values of democracy and freedom, and establish an alliance of free economies and a digital alliance to counter China.
The US would certainly want Taiwan to join the alliance. As long as Taiwan and the US work together to link their combined 63.8 percent of global semiconductor output, and their research and development capabilities, keeping “the mother of all industries” — the semiconductor industry — under the control of Taiwan, the US and other Western countries, Taiwan would become the key to life or death for those democracies.
President Tsai Ing-wen’s (蔡英文) administration in August last year announced that Taiwan would ease restrictions on US beef and pork imports, untangling the knot that has been an obstacle in Taiwan-US relations for many years. In response, the US immediately announced the launch of a new high-level annual economic dialogue with Taiwan, focused strongly on semiconductor supply chains.
This dialogue was initially chaired by then-US undersecretary of state for economic growth, energy and the environment Keith Krach.
Soon after the dialogue that was launched on Nov. 20, Representative to the US Hsiao Bi-khim (蕭美琴) and American Institute in Taiwan Managing Director Ingrid Larson in a virtual ceremony on Dec. 15 signed an greement on scientific and technology cooperation — with Krach as witness online.
The agreement is the first visible outcome of the dialogue.
It will help enhance bilateral cooperation between the two countries and ensure that Taiwan is a reliable partner for the US.
Everything is difficult in the beginning, but the formation of a Taiwan-US economic alliance is realistic, and the fundamental requirements are already in place.
Last year, the visits of delegations led by Krach and then-US secretary of health and human services Alex Azar opened the door to such an alliance.
On New Year’s Day, the US National Security Council on Twitter praised Taiwan’s easing of the restrictions on US pork imports and pointed to further economic cooperation between the countries.
With all the requirements in place and under the right circumstances, the Taiwanese economy, especially the semiconductor sector, should work toward the goal of a Taiwan-US economic and technological alliance.
Within a decade, “economic fortress Taiwan” will sit at the center of the US’ Indo-Pacific strategy. Taiwan should also link up with Japan and include it in the alliance. This should be Taiwan’s main priority.
Huang Tien-lin is a former advisory member of the National Security Council.
Translated by Lin Lee-kai
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