The New York Times reported on the 7th that the U.S. intelligence circle judged that the Chinese Communist Party General Secretary Xi Jinping had concerns about the military’s reunification of Taiwan. One of the reasons was that the use of force might destroy the global foundry leader TSMC’s production line, which would undermine China’s own plan to develop cutting-edge technology.
The Federal Senate is expected to vote on a large-scale industrial policy bill this week. With the increasing threat of competition in China, democratic and Republican lawmakers are expected to abandon their political prejudices and support the federal government to spend money to support private industries and consolidate American manufacturing and technological advantages. Semiconductors are one of the key industries that are expected to benefit.
The bill includes US$52 billion (about NT$1.44 trillion) in subsidies for the US semiconductor industry, and another US$195 billion in scientific research and development. The purpose of the semiconductor subsidy program is to strengthen domestic chip manufacturing capabilities in the United States and attract top foreign investors to set up advanced wafer fabs in the United States.
The United States actively strives for it. TSMC announced last year that it would invest 12 billion U.S. dollars to set up a factory in Arizona. According to the report, TSMC is considered an anomaly, because TSMC supplies some plants in Taiwan to China and other plants in Europe and the United States. As the outside world is increasingly worried that Xi Jinping may try to use force to attack Taiwan, TSMC has become a part of the struggle between the United States and China to maintain Taiwan’s substantial independence.
US intelligence officials believe that Xi Jinping has concerns about the military’s reunification of Taiwan, partly because he fears that TSMC’s production line may be destroyed, disrupting China’s plans to develop computing and telecommunications technology.
An intelligence official recently stated that for Xi Jinping, the above-mentioned risks are “really too high.”
In addition to attracting foreign businessmen to set up factories in the United States, US semiconductor manufacturers such as Intel, Micron Technology, and Texas Instruments may also receive funding from this bill. However, the US government will not decide the allocation of funds until Congress passes the bill.
The Senate will vote on this bill on the 8th day as soon as possible. It is generally expected to pass with a high number of votes. This proves that competition with China in the commercial and military fields has become one of the few issues that can consolidate the consensus of the two major US parties.
Proposers such as Senate Majority Leader Chuck Schumer promoted the bill with employment plans, but parliamentary discussions often refer to the Cold War, and lawmakers also warned that if the United States does not move, over-reliance on its number one geopolitical opponent will be perilous.
The co-sponsors of the bill avoided using the term “industrial policy” to avoid a recurrence of the fierce debate over whether the government should support specific industries more than 30 years ago. When former U.S. President Reagan was in power, Japan seemed to pose the greatest threat to the U.S. semiconductor and automotive industries. At that time, the federal government launched small-scale programs such as the Semiconductor Manufacturing Technology Alliance (SEMATECH) to revitalize the semiconductor industry.
The difference from the intense debate in the 1980s is that Japan is an industrial competitor and military ally of the United States, while China is a rising geopolitical opponent. In the 1980s, no one claimed that Japan would use large companies as surveillance tools or potential warfare weapons; today, this is where the outside world is concerned about China.
Many experts say that this bill may accelerate the decoupling of the world’s two largest economies. Beijing is afraid that it will still rely on foreign sources of advanced chips and software for many years; Washington is worried that China’s dominance of fifth-generation mobile communications (5G) technology will allow Beijing to cut off U.S. telecommunications networks.
US President Biden signed an executive order last week to expand the prohibition of US individuals and entities from investing in supporting Chinese military or Chinese companies that develop surveillance technologies for racial and religious oppression. Such measures may also limit the degree of economic exchanges between the US and China.
(Author: Yin Junjie; source of the first image: shutterstock)
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