Imagine that a superpower declared war on a great power and nobody noticed. Joe Biden this month launched a full-blown economic war on China — all but committing the US to stopping its rise — and for the most part, Americans did not react.
History is likely to record Biden’s move as the moment when US-China rivalry came out of the closet. America is now pledged to do everything short of fighting an actual war to stop China’s rise.
It is not clear that corporate America, or its foreign counterparts, have fully digested what is about to hit them. For decades, serious businesses have based their growth models on having a China strategy — whether it be by exporting to China, or producing there, or both. Unless a company’s product is, say, luxury goods or agricultural commodities, Biden’s technological decoupling will hit their bottom line. His escalation also marks a final break with decades of US foreign policy that assumed China’s global integration would tame its rise as a great power.
America’s conversion to China containment is bipartisan. It was one thing for Donald Trump to target Huawei and ZTE, the Chinese telecoms conglomerates, and aim for managed trade. It is another for Trump’s Democratic successor to isolate China’s entire high-tech sector. It is notable there are no prominent voices raised in either political party against US-China decoupling. Washington’s China politics is now about which party can get more to the right of the other.
There are two big risks to Biden’s gamble. The first is that America is now close to making regime change in China its implicit goal. The new restrictions are not confined to the export of high-end US semiconductor chips. They extend to any advanced chips made with US equipment. This incorporates almost every non-Chinese high-end exporter, whether based in Taiwan, South Korea or the Netherlands. The ban also extends to “US persons”, which includes green card holders as well as US citizens. That presents a binary choice between America or China. Most will choose the US. But there are tens of thousands of Chinese green card holders who will now be inclined to believe Beijing’s claim that there can be no such thing as divided loyalty.
The hit to China’s economy will be far bigger than the word “semiconductor” implies. Biden’s move draws on the premise that any advanced chip can be used by China’s military, including for nuclear weapon and hypersonic missile development. It is also meant to undercut China’s goal of dominating global artificial intelligence by 2030. But all such chips are dual use, which means that the US is now committed to blocking China in all kinds of civilian technologies that make up a modern economy.
In Chinese eyes, it will look like the US wants to keep communist China permanently down. It is no great leap from that to regime change.
The more imminent risk is that Biden’s gamble could prompt Xi Jinping, China’s president, to accelerate his timetable for Taiwan reunification. The island state is by far the world’s largest maker of high-end chips. That Biden’s move took place shortly before China’s 20th party congress, which ends on Saturday with a likely third five-year term for Xi, is notable. Many China watchers think Xi wanted to put the party congress behind him before turning to his vow of fixing the Taiwan problem. Biden could have made a violent resolution to China’s Taiwan policy more likely. He could equally have given Xi pause for thought. We will find out.
What we do know is that national security is once again the lens through which Washington sees the world. Rest in peace “the world is flat” and the “end of history”. The US has endorsed a zero-sum metric in which China’s rise is seen as being at America’s expense. You could say that Biden is belatedly reacting to what China has been talking about for years — with increasing unsubtlety by Xi. But that is hardly reassuring. It means that the world’s hegemon and its only serious rival now see each other through the same lens. As is usually the case in history, nobody else gets much of a say.
Anonymous
China is not ready to move on Taiwan as that will give usa to confisticate the three trillions us$ reserve that china took 30 years to earn
ReplyDeleteUSA's chip war on China is going to backfire. Just wait. Toyota of Japan cut production of cars by 40% in Septemeber, and that just gives an idea what it will be like going forward. Cars do not need high end chips anyway, so what is the issue?
ReplyDeleteChip war will affect many Asian countries like South Korea, Taiwan and Japan, themselves chip producers. But they have still to depend on raw materials for making chips from who? Mainly Russia and Eastern Ukraine, for Neon and Palladium. Being considered non-friendly countries by Russia, what do they expect. China will of course be able to get Russian raw materials, as they now have an agreement for chip co-operation with Russia. Will the USA help South Korea, Japan and Taiwan when the USA itself has to rely mainly on some raw materials from Russia and Ukraine as well? Sure, the USA can supply, but at what price?
Just as Europeans were banking on the USA to supply them oil and gas, it was a evil ploy and they were suckered into buying USA oil and gas, at four to five times the price they could have sourced from Russia. Now crying foul, but they deserve the treatment without having a plan as to how they can overcome the shortage.
Following the USA blindfolded is not the way, and proven costly, even if they are allies. The USA does not treat them as allies and their own interest is the only thing they care about, and so it is slaughtering the Europeans like enemies. Does that prove that Kissinger's warning that 'to be a friend of the USA is fatal'. Well, I do think so.
Now, Olaf Schulz is going to China and already they are howling and warning him not to act unilaterally in dealing with China. Schulz obviously has taken the advice of Angela Merkel and knows that Germany cannot decouple from China. It would be catastrophic. The fact that Schulz is going to China alone, shows that all is not well in the EU, as far as unity is concern. We have also seen that Hungary still honours it's good relations with Russia and ignoring the USA's and Nato's coercion.
Meanwhile the USA is said to be restoring defence talks with Russia, but as usual, start with antagonising Russia and saying Russia is not interested in talking about ending the war in Ukraine. Does that needed to be said? When Ukraine and Russia reached agreement to stop the war in March/April after negotiations, the USA and UK scuttled the agreement, with Boris Johnson the main instigator.
Now why would Russia want to talk about ending the war, when what the USA and UK did earlier, makes talking about ending the war an exercise in futility. The USA is trying to show their hypocritical stand of showing the world that they want peace in Ukraine, which is totally and diametrically opposed to their real intention of keeping the war going. There is really no sincerity in their approach of wanting peace, when they keep pouring weapons and aid to Ukraine.
Any move by the USA or it's poodles making agreements with any country on security is always about countering China's influence.
ReplyDeleteConpare that with China's agreements with countries which are always about increasing co-operation, trade links, investments and infrastructure developments and not about targeting any other country.
China's stance is, if you do not like it, take up the challenge and compete, and not trying to sabotage others to keep them down, so you can rise to the top. The USA did that to Germany and Japan. Now it is targeting China, to bring China down, not by competing with, but by sabotaging it.
ReplyDeleteThe Economy and Cultural(more potent in my view) are on since time immemorial. And these two wars are infinite till there is no more mankind.
This, l must say all should always bear
In mind.
The USA always thought everything is easy to win.
ReplyDeletePouring hundreds of thousands of troops into Vietnam together with all their top of the range military equipments, still ended up with the USA running scared, with tails between their legs.
Pouring hundreds of billions of taxpayer's money into Afghanistan, together with all the weapons, military helicopters and wasting 20 long years fighting a war against a Taliban outfit of farmers with small arms. Yet they fled with only their pants on, leaving billions of dollars worth of military equipment behind.
They went into Iraq with overwhelming force and within two months, George W. Bush already proclaimed 'Mission Accomplished'. Yet, almost twenty years later, Iraq is still wrought with erupting violence. Only stealing the oil was accomplished. Nothing more.
They thought Russia was a pushover, with Nato providing the proxy to carry out their agenda of expanding Nato, a grouping they totally controlled. They thought using sanctions will make Russia collapse. Russia did the sanctions in reverse on Nato by cutting energy and we can clearly see who is collapsing and breaking up.
Starting a trade war with China and proclaiming trade wars are easy to win. Yet, four years down the road, China is selling even more to USA in spite of the Pandemic. The winner is yet to be proclaimed. But it is not the USA.
The Americans planned to destroy Russia and Europe and then come in with a Marshall Plan 2 to rule over Europe and Russia.
ReplyDeleteThe Europeans are so silly not knowing that the big sacrifice is not Ukraine but Europe. After this winter, Europe would be on its knee, begging the Americans for charity.
Worst case scenario, Europe will crawl back to Russia, begging for forgiveness. Nato will break up and a new European Political Community, already formed, will take over, without the USA's involvement.
ReplyDeleteThe Europeans now know that the USA's interest is merely using the Europeans in Nato to fight a proxy war that benefits the USA solely. They are suffering, and to add insult to injury, the USA is adding more misery by selling expensive gas to them and laughing all the way to the bank, probably laughing at the stupidity of the Europeans too.
The US and Western allies are supplying Ukraine weapons to prolong the war, China should supply Russia with weapons to help end the war sooner with a quick Russian victory. After all, the US had already initiated an economic war with China. So why should Beijing be afraid of sanctions?
ReplyDeleteA lot of things are happening between Putin and Xi that we would not know. Just like Saudi standing up to the Americans, UAE also showing the middle finger to the Americans.
ReplyDeletePutin is very confident of what he is doing not without reason. China is standing behind him like a mountain.
China is selling DF21s to the Saudis and the latest Chinese warplanes and drones. China is patching up the Saudis with the Iranians.
If the Americans can see or guess what the Chinese are doing, then things would be easy for the Americans.
US senators want to stop Huawei from building its factory in .. China !!!
ReplyDeleteU.S. Senator Marsha Blackburn (R-Tenn.), along with Senators Tom Cotton (R-Ark.), Bill Hagerty (R-Tenn.), Ted Cruz (R-Texas), and Marco Rubio (R-Fla.) sent a letter to President Biden demanding he act quickly to prevent Huawei from building the Pengxinwei IC Manufacturing Company (PXW) semiconductor plant. The opening of this plant would put the United States at a disadvantage in countering Huawei, advance Communist China’s Military-Civil Fusion campaign, put American semiconductor companies at a disadvantage, and pose a national security concern.
Dear President Biden,
ReplyDeleteWe call on the administration to take immediate action to halt Huawei’s attempt to build the Pengxinwei IC Manufacturing Company (PXW) semiconductor foundry. This Huawei-aligned foundry is designed to fatally undermine the U.S. strategy to counter the Chinese Communist Party’s (CCP) bid to dominate global 5G markets and strengthen its intelligence and repression apparatus.
Bloomberg recently published evidence that Huawei began construction over seven months ago on a factory where PXW is expected to eventually mass produce chips as advanced as 14 nanometers and 7 nanometers. Almost all of these chips are expected to be sold to Huawei, and PXW reportedly has already ordered the advanced equipment necessary to build these chips. This would represent a dangerous leap in Chinese semiconductor manufacturing, as Chinese chipmakers have thus far only been able to produce 7-nanometer chips in limited quantities. With these new chips for its base stations, Huawei could resume its march towards 5G market dominance, and the CCP will advance its plan to control global telecommunications and extend its economic espionage and repression.
We are deeply concerned that, despite the obvious threat that PXW poses, your administration has taken no official steps to delay the project’s progress, despite being aware of the project for some time. The Department of Commerce’s apparent inaction is a dereliction of duty. Despite PXW’s clear connection with Huawei, Commerce has not added PXW to its Bureau of Industry and Security’s (BIS) Entity List or its list of Huawei subsidiaries under the Foreign Direct Product Rule. As far as we can tell, Commerce has not sent a single “informed” letter to any entities potentially working with PXW, ordering them to halt all shipments to and transactions with the factory.
Export controls are among our nation’s foremost tools to win the economic long war with China. It defies logic that, at the same time as your administration worked on a package of export controls on Chinese semiconductors, it has not used all the tools at its disposal to end PXW’s development. Your administration should blacklist PXW immediately, unless you wish to preside over the unravelling of the U.S. campaign against Huawei and the CCP’s bid for global 5G dominance.
Thank you for your prompt attention to this matter. I look forward to receiving your response.
These white savages might as well send a letter to Biden to stop China's Space Centre in Hainan Island! The savages are getting really wild and need to be wiped out for the good of mankind.
ReplyDeleteWhat tools have the USA not used in it's sanctions basket to stop Russia? Nothing left! Just hot air.
ReplyDeleteThe thought of losing their US$ hegemony is so terrifying for them, they are desperate. And with allies like Saudi Arabia now thinking of joining BRICS and SCO, they are tearing their hairs out trying to find a way to control the Arab oil producers.
ReplyDeleteThey can withdraw their military protection for the Arab oil producers as threatened, and Russia will step in. Russia would also be able to sell more weapons like S400 anti missile system to the Saudis. That would be more money to fund the war for Russia in Ukraine. The USA will also lose the massive protection money the Arabs are paying them.
Because of Israel's objection, the Americans refused to sell many weapons that the Saudi's wanted to buy like F35s etc etc. This pissed off the Saudis for being treated as second rate to Israel.
ReplyDeleteWith Russia or China, the Saudis can buy any weapons they want as long as they are selling. There would be no Israel to block the transaction.
The Saudis have been quietly buying from Russia and China for many years.