{"id":78930,"date":"2023-04-13T11:00:32","date_gmt":"2023-04-13T01:00:32","guid":{"rendered":"https:\/\/www.aspistrategist.ru\/?p=78930"},"modified":"2023-04-13T10:58:39","modified_gmt":"2023-04-13T00:58:39","slug":"washington-must-stop-underminingg-taiwans-status-as-a-technology-powerhouse","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/washington-must-stop-underminingg-taiwans-status-as-a-technology-powerhouse\/","title":{"rendered":"Washington must stop undermining Taiwan\u2019s status as a technology powerhouse"},"content":{"rendered":"
<\/figure>\n

The stern warnings<\/a> issued by China ahead of Taiwanese President Tsai Ing-wen\u2019s tour of the United States and Central America have highlighted the threat that intensifying Chinese pressure poses to the island\u2019s security and stability. But the warnings also underscored the degree to which the ongoing US efforts to \u2018onshore<\/a>\u2019 semiconductor manufacturing could cripple Taiwan\u2019s economy at a critical time.<\/p>\n

Taiwan\u2019s security rests on two main pillars: self-governance and economic prosperity. Maintaining de facto sovereignty is non-negotiable, which rules out an accommodation that would placate China, at least under the current Chinese leadership. Even in the face of economic and diplomatic coercion, Taiwan is unlikely to relinquish its democratic system.<\/p>\n

Taiwan\u2019s dominance in semiconductor manufacturing is critical to its economic security. Taiwan currently produces more than 60% of the world\u2019s semiconductors<\/a> and 90% of all high-end chips. But the efforts of US President Joe Biden\u2019s administration to promote domestic semiconductor manufacturing\u2014reflected in the US$280 billion CHIPS and Science Act<\/a>\u2014threaten to undermine the long-term competitiveness of the Taiwan Semiconductor Manufacturing Company, severely threatening the island\u2019s so-called silicon shield<\/a>.<\/p>\n

The US semiconductor manufacturing push has inspired nervousness in Taiwan. TSMC founder Morris Chang recently backed<\/a> the Biden administration\u2019s imposition of sweeping export controls to curb Chinese advanced-chip production. But Chang says that he doesn\u2019t understand<\/a> why the administration wants to move manufacturing from efficient Asian sites to the US.<\/p>\n

Nevertheless, in an effort to escape a geopolitical quagmire, TSMC announced plans last year to invest US$40 billion<\/a> in a new fabricating plant in Arizona, which will drive up costs and could limit the company\u2019s ability to make the massive investments in research and development needed to retain industry leadership. It is already clear that production costs are significantly higher<\/a> in Arizona than in Taiwan, forcing TSMC to pass its additional costs on to customers or accept lower profit margins, implying higher prices, reduced innovation or both.<\/p>\n

Moreover, the administration\u2019s onshoring and \u2018friend-shoring<\/a>\u2019 drive implies that the US does not view Taiwan as a reliable partner. As US Secretary of Commerce Gina Raimondo put it<\/a> last year, \u2018America buys 70% of its most sophisticated chips from Taiwan \u2026 [That is] downright scary and untenable.\u2019<\/p>\n

Drumming up fears that Taiwan is in danger undercuts business confidence and could undermine Taiwan\u2019s economic prosperity and hurt global chip production. The global semiconductor supply chain would be more resilient with a prosperous, innovative TSMC. But that requires the US to stop eroding Taiwan\u2019s strategic position as a tech powerhouse.<\/p>\n

To be sure, US politicians have been increasingly vocal in their support for Taiwan in recent years. But this newfound enthusiasm is largely symbolic and intended for domestic consumption by voters who favour a more aggressive US stance towards China. Such political posturing doesn\u2019t help Taiwan. Provocative acts, like former House Speaker Nancy Pelosi\u2019s visit<\/a> to Taiwan last year and the 5 April meeting<\/a> between Tsai and current House Speaker Kevin McCarthy, threaten the delicate status quo that has enabled Taiwan to maintain its de facto sovereignty and protect its way of life.<\/p>\n

Chinese leaders have long asserted the mainland\u2019s sovereignty over Taiwan and insisted that reunification is inevitable. Paradoxically, it is the US government\u2019s endorsement of and adherence to this official \u2018one China\u2019 narrative that has kept Taiwan safe. Dropping the facade, ostensibly in support of Taiwan, would make the island\u2019s geopolitical position even more tenuous.<\/p>\n

Instead of grandstanding, what Taiwan needs from the US is a bilateral free-trade agreement and support for Taiwan\u2019s membership in regional trade agreements such as the Indo-Pacific Economic Framework for Prosperity and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.<\/p>\n

There are also steps that Taiwan could take on its own, like continuing to invest in asymmetrical defence capabilities, cyber and critical infrastructure, and military training. Economically, the island could benefit from the ongoing decoupling between China and Western countries by positioning itself as one of the world\u2019s largest manufacturing powerhouses.<\/p>\n

But first, Taiwan needs to buy itself some time. The tug-of-war between the US and China leaves Taiwanese policymakers with little room for manoeuvre. At present, there\u2019s no scenario in which the \u2018Taiwan question\u2019 is resolved in a way that satisfies the needs of all parties. While it\u2019s vitally important that Taiwan remains a prosperous tech hub and a democratic society, this outcome is far from guaranteed.<\/p>\n

The US intelligence community believes that China will invade Taiwan<\/a> by 2027. With the right policy response, however, the US can prevent this catastrophe and push the resolution of the \u2018Taiwan question\u2019 far into the future. But a shift in US policy towards \u2018containing\u2019 China would invite rather than postpone the island\u2019s day of reckoning, and could lead Taiwan\u2014and the world\u2014down a perilous path.<\/p>\n","protected":false},"excerpt":{"rendered":"

The stern warnings issued by China ahead of Taiwanese President Tsai Ing-wen\u2019s tour of the United States and Central America have highlighted the threat that intensifying Chinese pressure poses to the island\u2019s security and stability. …<\/p>\n","protected":false},"author":1533,"featured_media":78951,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[52,3366,392,2070],"class_list":["post-78930","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-china","tag-semiconductors","tag-taiwan","tag-us-foreign-policy"],"acf":[],"yoast_head":"\nWashington must stop undermining Taiwan\u2019s status as a technology powerhouse | The Strategist<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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