When US president Joe Biden visited South Korea, he visited Samsung Electronics' 3nm semiconductor fab. Should Taiwan or TSMC envy that? South Korea has a high-profile role to play in the international community, but what would happen if Taiwan had a similar role?
US secretary of commerce Gina Raimondo has noted that 70% of US cutting-edge chips come from Taiwan, but in fact China sees an even higher proportion of chips from Taiwan. According to Taiwan's Ministry of Finance, Taiwan's semiconductor exports totaled US$155.5 billion in 2021, of which US$93.7 billion, or 60%, went to China and Hong Kong. Yes, it is a national security issue not only for the US, but also for Taiwan and China.
There is no need to envy others, but it is the unshirkable responsibility of think tanks to find the best possibility for everyone to win with their own advantages.
Judging from the Trump administration' cabinet and national security team lineup, we can tell that the dovish US policy toward China had its roots in Wall Street, where commercial interests were given priority. Former US treasury secretary Henry Paulson chronicled his experiences with senior Chinese officials in his book "Dealing with China".
All that experts with Wall Street backgrounds talk about is business interests, ranging from the privatization of state-owned enterprises, Internet giants to US stock markets. We cannot deny that Apple, because of huge business interests, has to store user data in data centers in China. Tech giants, such as Google, Meta and Microsoft, who are denied access or have limited access to the Chinese market, do not speak ill of China. No companies are willing to give up the huge potential benefits from China, and most of them are dovish.
Many of the hawkish critics are China experts who have long studied the Chinese cmmunists, such as Matt Pottinger, Peter Navarro and Steve Bannon. They know that the confrontation with China is not just about tariffs and other financial tools. Therefore, the US must confront China starting from the foundation of society, and public opinion is very important.
There are two camps of hawks. One believes that China will find its own way in the future, but it must not be allowed to threaten US national security and interests. The other believes that China's problems lie with the Chinese Communist Party (CCP), and that only when the CCP collapses will the international community have long-term peace and stability.
There is a huge difference between the US concept of healthy competition and the Chinese concept of "class struggle," as in the case of Russia, where the perception is that if you cannot beat your opponent, you will one day be beaten. Coexistence is a dream; struggle is the norm. Barack Obama had the best opportunity to "deal with China," but he missed it.
Now Taiwan has a good hand, and South Korea and Japan are also in a good position. But we need to combine political, economic and industrial experts to prepare Taiwan's industrial strategy, because it is a national security issue. Never mind what cards you have, but you have to pay attention to whether the rules of the game have changed or not.
Taiwan semiconductor exports to global and China markets, 2016-2021 (US$100m)
Source: Ministy of Finance, compiled by DIGITIMES, June 2022
