#Pakistan among top 5 markets for #China's ByteDance owned #TikTok video sharing app. #India leads with 190 million users, followed by #US 41 million, #Turkey 23.2 million, #Russia 19.9 million and #Pakistan 19.5 million. https://www.businessofapps.com/data/tik-tok-statistics/#:~:text=Ind....

A total of 44 countries are covered by these stats. It is unclear whether these include China.

https://twitter.com/haqsmusings/status/1291431262129774592?s=20

Mark Zuckerberg tells #Facebook employees he's 'really worried' about possible #tiktokban. "It's a really bad long-term precedent..I am really worried…it could very well have long-term consequences in other countries around the world. https://www.businessinsider.com/mark-zuckerberg-facebook-tiktok-ban... via @businessinsider

#US squeeze on #China’s apps, #digital infrastructure could upend global internet. Over 20 of 100 top-grossing apps on #Google Play are #Chinese, while 10 of the 100 highest grossing apps on #Apple’s App Store are from China. #CleanNetwork https://www.scmp.com/tech/big-tech/article/3096323/us-squeeze-china... via @scmpnews

“Many of the Chinese companies currently under unilateral US sanctions are innocent, and their technology and products are safe,” said Wang Wenbin, China’s Foreign Ministry spokesman, in a statement on Thursday. “It is absurd for the US to talk of a ‘Clean Network’ when it is covered in its own filth”, referencing the Edward Snowden incident and Prism surveillance.

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The Trump administration’s “Clean Network” programme threatens to further disrupt China’s technology industry, as the campaign seeks to restrict the international expansion of Chinese apps, cloud services and undersea cable networks.
US Secretary of State Mike Pompeo on Wednesday made sweeping remarks that – “to keep Americans’ data safe from untrusted vendors” – he will aim to remove Chinese-owned apps in the market as well as cut off links with China’s digital infrastructure.
The initiative, which the State Department said includes the commitment of more than 30 countries and territories, is likely to escalate the complex tech war between the world’s two largest economies, according to analysts.
“The negative effect of this programme is that it’s becoming harder to see a truly global vision of the internet and access without borders surviving this tech war,” said Paul Haswell, a partner who advises technology companies at international law firm Pinsent Masons. “It would seem that the object of the campaign is to remove Chinese technology from all aspects of US data transmission and processes. We’ll have to see if that is even possible in practice.”

-----------

“This latest ramp-up in US-China tensions poses a potential barrier for the Chinese cloud companies to expand globally,” said Mathew Ball, Canalys’ chief analyst for global infrastructure, cloud and cybersecurity. He added, however, that this campaign “will be challenging to enforce outside the US”.
Pompeo said the US campaign is also focused on keeping the undersea cables that links the country to the global internet safe from intelligence-gathering by China.
In June, the US government blocked a major undersea cable network from linking Hong Kong to the US West Coast because it “would expose US communications traffic to collection” by China.

#US #CleanNetwork aims to restrict #international growth of #Chinese apps, cloud services and undersea cable networks. 20+ of 100 top-grossing apps on #Google Play are #Chinese, while 10 of the 100 highest grossing apps on #Apple’s App Store are from China https://www.scmp.com/tech/big-tech/article/3096323/us-squeeze-china...

The Clean Network campaign also aims to prevent sensitive personal information of US citizens and businesses’ most valuable intellectual property – including Covid-19 vaccine research – from being stored and processed on cloud computing platforms run by the likes of 

, telecommunications network operators 

 and 

, 

 and Tencent.

Alibaba vs. Amazon

https://www.nasdaq.com/articles/better-buy%3A-alibaba-vs.-amazon-20...


With just about everyone who is still working doing so from home due to the COVID-19 outbreak, there has been a huge increase in the use of cloud services and online grocery orders. Alibaba (NYSE: BABA) and Amazon.com (NASDAQ: AMZN) are two of the top e-commerce and cloud service providers in the world.

Alibaba dominates China's e-commerce market, with 824 million users on mobile. The Chinese tech giant is also the leading cloud service provider in China with Alibaba Cloud.

Amazon is increasing its share of e-commerce in the U.S., as it becomes the go-to online store for people relatively new to buying things online. The company has over 150 million Amazon Prime members who enjoy free shipping and other services as part of a yearly subscription. Most of the company's profit, however, is generated from Amazon Web Services, which is helping organizations migrate their data systems from on-premise servers to the cloud.

Both companies were growing fast going into the coronavirus crisis, but the practice of social distancing will only make these companies stronger as more people adopt online shopping. We'll compare Alibaba and Amazon on financial fortitude, growth, and valuation to determine which stock is the better buy.

In hard times, companies that have plenty of cash can weather the storm, while companies that are swamped with debt add an additional element of risk that you can avoid by investing in cash-rich companies like Alibaba and Amazon.

The main difference between the two is that Alibaba generates more free cash flow relative to revenue than Amazon. Free cash flow is an important profitability metric to watch, as it shows the actual cash that is left over for value-creating moves like dividends, share repurchases, and acquisitions after paying all expenses and reinvesting in the business for growth.

Overall, Alibaba has the advantage here.

Which company is growing faster?
While Alibaba and Amazon have both been around for more than 20 years, both companies are still growing very fast, especially for companies of their size.

Has China Won by Kishore Mahbubani

Financial Times Book Review by John Thornhill

https://www.blogger.com/comment.g?blogID=8278279504304651957&po...


In Mahbubani’s telling, written before coronavirus struck, the US ruling classes think their rivalry with China is a rerun of the cold war with the Soviet Union — and they know how that movie ended. It is surely only a matter of time and political gravity before the liberty-loving, free-market superpower sees off the latest uppity communist dictatorship.

Mahbubani picks up on that cold war analogy. But this time, he argues, the roles are reversed: the US is the inflexible, ideological, systemically challenged superpower, while China is the adaptable, pragmatic and strategically smart rival. “America is behaving like the Soviet Union, and China is behaving like America,” he writes.

Like an overzealous proctologist, Mahbubani probes America’s most sensitive parts. In spite of the increasingly bellicose noises coming out of Washington, the US has failed to develop any coherent strategy to deal with a resurgent China, he argues. That is in glaring contrast with the patient strategy of containment articulated by the US diplomat George Kennan in 1946 at the start of the cold war. Mahbubani gives short shrift to America’s marginalised modern-day diplomats: there are, as the former defence secretary Robert Gates observed, more members of military marching bands than US foreign service personnel.


The former Singaporean diplomat adds that US politics has been captured by a short-sighted plutocracy that would not survive long if the Foreign Corrupt Practices Act, criminalising bribery of officials abroad, applied at home.


Lacking any strategic brain, the US has become over-reliant on military muscle and entangled in perpetual wars in the Middle East. The US may account for half of global defence spending, but how much use is its military hardware in a software age? US aircraft carriers, which can cost up to $13bn to build, can be easily sunk by one of China’s DF-26 missiles, costing a few hundred thousand dollars.

Most tellingly, the US’s social and economic model has stopped delivering for most of its people. “America is the only developed society where the average income of the bottom 50 per cent of the population has gone down over the past 30 years. In the same period, the Chinese people have experienced the greatest improvement in their standard of living ever seen in Chinese history,” he writes.




It is in the nature of a polemic to maximise all evidence supporting an argument and minimise everything that contradicts it. So it is with Mahbubani: unsparing on the US’s failings, he glosses over China’s manifest flaws. The Great Leap Forward and Cultural Revolution, in which tens of millions died, merit one sentence. The current unrest in Hong Kong is dismissed as a struggle between the homeless and real estate tycoons.

Mahbubani is as effusive in his praise of China’s leaders as he is damning of their US counterparts. President Xi Jinping’s removal of term limits was necessary to counter factionalism and corruption. His rule delivers three public goods to the world: restraining Chinese nationalism; responding to climate change; and ensuring that China is a status quo power, not a revolutionary one. “There is a very strong potential that Xi Jinping could provide to China the beneficent kind of rule provided by a philosopher king,” he gushes.

In the end, Mahbubani ducks the question his book’s title poses. Despite his criticisms of the US, he recognises its many strengths: an individualistic culture; the best universities in the world; a magnetic attraction for the world’s best and brightest (including 351,000 Chinese students); and its strong institutions — although Donald Trump is working on that.

He concludes that a “geopolitical contest between America and China is both inevitable and avoidable”. Read this book to be provoked, if not convinced.

#India and #US , the 2 largest democracies in the world, are the sickest now. One major difference is that political opposition to the government’s mishandling of the #COVID19 crisis is much more energised and organised in the US than in India.

https://scroll.in/article/971086/the-two-largest-democracies-in-the...

The two largest democracies in the world, India and the United States, are now struggling and flailing in the fight against the coronavirus. India has the world’s largest number of new cases, followed closely by the US. The number of reported cases are almost surely undercounts, as in both countries testing has been delayed and highly inadequate, if not downright chaotic. Death rates per million people are much lower in India, possibly because the Indian population is much younger. As the number of cases mounted, the government in both countries discontinued giving daily briefings on the virus impact.

As is well known, in the US, President Donald Trump and his party had been in denial or claiming imminent victories too often (consistent with their anti-science and anti-expert attitude), fatally wasting several weeks of potential preparation. Simple hygienic precautionary measures have been politicised, with not wearing masks becoming a sign of partisan or libertarian defiance.

The US also lacks a unified public health agency to authoritatively handle and coordinate in a major pandemic. Even in the best of times, the US private medical insurance system is messy, uncoordinated, mired in a bureaucratic system oriented to exclude people, and largely unaffordable for all those, particularly the poor, who do not have a stable job. Among rich countries the system is among the least prepared to face a pandemic of the current proportions.

The current regime in India in its health plans has been trying by and large to copy the American system of subsidised private insurance. Health spending by the Indian government as percentage of GDP has long been one of the lowest for any major country, and the public health system is chronically dismal. This has been a matter of national shame, but this kind of shame does not get the attention of our current crop of ultra-nationalists.

A poorly handled pandemic
Faced with the virus, India, like the US, has been woefully unprepared. India also wasted crucial weeks in February and March, even as the virus was raging in a neighboring country. This was not so much because of anti-science attitudes (though they are not absent in the ruling party and its affiliates – remember the cow urine drinking parties organised by some of them to forestall the virus), but more because of another virus that has been afflicting India’s body politic: the virus of hate and intolerance.

Much of February, particularly around the time of the Delhi state elections, went in majoritarian hate-mongering against the minority Muslim community and all dissenters against a highly discriminatory Citizenship Act. The protesting women of Shaheen Bagh were the enemy, more than the pandemic. On February 24, the regime felicitated Trump in an Ahmedabad cricket stadium packed with 110,000 people, at a time when restrictions were already in place in some countries. After the Delhi elections, some ruling party politicians were busy fomenting riots. The first half of March the central leadership was preoccupied with toppling an Opposition state government.

--------------------

There is a danger that by the time the coronavirus crisis is finally over in India, there may be only a largely hollowed-out shell of democracy left. India will then be known as the world’s largest pseudo-democracy. This will give China a much larger ideological victory than their minor military one at India’s borders that the Indian government is currently busy covering up to prop its faltering image of muscular nationalism.

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America’s decision to engage, rather than isolate, Pakistan has also helped. I have no doubt that closer
American re-engagement helped to nudge Pakistan in the right direction. Many members of Pakistan’s
elite have been educated in American universities – another leading indicator of a country’s orientation.
Just imagine how different international relations would be if American leaders could visit Myanmar (or
even Iran) with equal ease and have friendly discussions about agreements and disagreements.

Snowden, Edward. Permanent Record (pp. 163-164). Henry Holt and Co.. Kindle Edition.

"It’s not just the Internet’s infrastructure that I’m defining as fundamentally American—it’s the computer software (Microsoft, Google, Oracle) and hardware (HP, Apple, Dell), too. It’s everything from the chips (Intel, Qualcomm), to the routers and modems (Cisco, Juniper), to the Web services and platforms that provide email and social networking and cloud storage (Google, Facebook, and the most structurally important but invisible Amazon, which provides cloud services to the US government along with half the Internet). Though some of these companies might manufacture their devices in, say, China, the companies themselves are American and are subject to American law. The problem is, they’re also subject to classified American policies that pervert law and permit the US government to surveil virtually every man, woman, and child who has ever touched a computer or picked up a phone. Given the American nature of the planet’s communications infrastructure, it should have been obvious that the US government would engage in this type of mass surveillance. It should have been especially obvious to me. Yet it wasn’t—mostly because the government kept insisting that it did nothing of the sort, and generally disclaimed the practice in courts and in the media in a manner so adamant that the few remaining skeptics who accused it of lying were treated like wild-haired conspiracy junkies. Their suspicions about secret NSA programs seemed hardly different from paranoid delusions involving alien messages being beamed to the radios in our teeth. We—me, you, all of us—were too trusting. But what makes this all the more personally painful for me was that the last time I’d made this mistake, I’d supported the invasion of Iraq and joined the army. When I arrived in the IC, I felt sure that I’d never be fooled again, especially given my top secret clearance. Surely that had to count for some degree of transparency. After all, why would the government keep secrets from its secret keepers? This is all to say that the obvious didn’t even become the thinkable for me until some time after I moved to Japan in 2009 to work for the NSA, America’s premier signals intelligence agency."

Snowden, Edward. Permanent Record (pp. 172-173). Henry Holt and Co.. Kindle Edition. 

AT THE START of my employment with the NSA, in 2009, I was only slightly more knowledgeable about its practices than the rest of the world. From journalists’ reports, I was aware of the agency’s myriad surveillance initiatives authorized by President George W. Bush in the immediate aftermath of 9/11. In particular, I knew about its most publicly contested initiative, the warrantless wiretapping component of the President’s Surveillance Program (PSP), which had been disclosed by the New York Times in 2005 thanks to the courage of a few NSA and Department  Department of Justice whistleblowers. Officially speaking, the PSP was an “executive order,” essentially a set of instructions set down by the American president that the government has to consider the equal of public law—even if they’re just scribbled secretly on a napkin. The PSP empowered the NSA to collect telephone and Internet communications between the United States and abroad. Notably, the PSP allowed the NSA to do this without having to obtain a special warrant from a Foreign Intelligence Surveillance Court, a secret federal court established in 1978 to oversee IC requests for surveillance warrants after the agencies were caught domestically spying on the anti–Vietnam War and civil rights movements. Following the outcry that attended the Times revelations, and American Civil Liberties Union challenges to the constitutionality of the PSP in non-secret, regular courts, the Bush administration claimed to have let the program expire in 2007. But the expiration turned out to be a farce. Congress spent the last two years of the Bush administration passing legislation that retroactively legalized the PSP. It also retroactively immunized from prosecution the telecoms and Internet service providers that had participated in it. This legislation—the Protect America Act of 2007 and the FISA Amendments Act of 2008—employed intentionally misleading language to reassure US citizens that their communications were not being explicitly targeted, even as it effectively extended the PSP’s remit. In addition to collecting inbound communications coming from foreign countries, the NSA now also had policy approval for the warrantless collection of outbound telephone and Internet communications originating within American borders.

Instead of #AI, #Pentagon Is Clinging to old #tech. #US #politics of killing off old weapons systems is so forbidding — often because it involves closing factories or bases, and endangers military jobs in congressional districts — that the efforts falter.

https://www.nytimes.com/2020/09/29/us/politics/military-cyberweapon...

A bipartisan House panel said on Tuesday that artificial intelligence, quantum computing, space and biotechnology were “making traditional battlefields and boundaries increasingly irrelevant” — but that the Pentagon was clinging to aging weapons systems meant for a past era.

The panel’s report, called the “Future of Defense Task Force,” is one of many underway in Congress to grapple with the speed at which the Pentagon is adopting new technologies, often using the rising competition with China in an effort to spur the pace of change.

Most reach a similar conclusion: For all the talk of embracing new technologies, the politics of killing off old weapons systems is so forbidding — often because it involves closing factories or bases, and endangers military jobs in congressional districts — that the efforts falter.

The task force said it was concentrating on the next 30 to 50 years, and concluded that the Defense Department and Congress should be “focused on the needs of the future and not on the political and military-industrial loyalties of the past.”

“We are totally out of time, and here is a bipartisan group — in this environment — saying that this is a race we have to win and that we are currently losing,” said Representative Seth Moulton, Democrat of Massachusetts, who served with the Marine Corps in Iraq and was a co-chairman of the task force. “There is a misalignment of priorities, and diminishing time to make dramatic changes.”

The report calls for the United States to undertake an artificial intelligence effort that uses “the Manhattan Project as a model,” citing the drive in World War II to assemble the nation’s best minds in nuclear physics and weapons to develop the atomic bomb. The task force found that although the Pentagon had been experimenting with artificial intelligence, machine learning and even semiautonomous weapons systems for years, “cultural resistance to its wider adoption remains.”

It recommended that every major military acquisition program “evaluate at least one A.I. or autonomous alternative” before it is funded. It also called for the United States to “lead in the formulation and ratification of a global treaty on artificial intelligence in the vein of the Geneva Conventions,” a step the Trump administration has resisted for cyberweaponry and the broader use of artificial intelligence.

But questions persist about whether such a treaty would prove useful. While nuclear and chemical weapons were largely in the hands of nations, cyberweapons — and artificial intelligence techniques — are in the hands of criminal groups, terrorist groups and teenagers.

Nonetheless, the report’s focus on working with allies and developing global codes of ethics and privacy runs counter to the instincts of the Trump administration, making it more surprising that the Republican members of the task force signed on.

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“The Pentagon knows how to acquire large programs,” like “fighter jets or aircraft carries, but it is less adept at purchasing at scale the types of emerging technologies that will be required for future conflict,” it said.

Defense Department officials have sought to address that problem. But the task force found that while those efforts sometimes succeeded, they were too small, and “the Pentagon has so far only been able to tap into a fraction of the innovation being developed in the United States.”

#China's #Huawei develops plan for chip plant to help beat #American sanctions. #Chinese fab will initially experiment with making low-end 45nm chips, a #technology global leaders in chipmaking like #TSMC & #Intel started using 15 years ago. #SiliconValley https://www.latimes.com/business/story/2020-11-01/huawei-chip-plant

Huawei is working on plans for a dedicated chip plant in Shanghai that would not use American technology, enabling it to secure supplies for its core telecom infrastructure business despite U.S. sanctions.

Two people briefed on the project said the plant would be run by a partner, Shanghai IC R&D Center, a chip research company backed by the Shanghai municipal government.

Industry experts said the project could help Huawei, which has no experience in fabricating chips, chart a path to long-term survival.

U.S. export controls imposed in May and tightened in August leverage American companies’ dominance of certain chip-manufacturing equipment and chip-design software to block semiconductor supplies to Huawei.

Industry experts said the planned local facility would be a potential new source for semiconductors after stocks of imported chips Huawei has been accumulating since last year ran out.

The fabrication plant will initially experiment with making low-end 45nm chips, a technology global leaders in chipmaking started using 15 years ago.

But Huawei wants to make more advanced 28nm chips by the end of next year, according to chip industry engineers and executives familiar with the project. Such a plan would allow Huawei to make smart TVs and other “internet of things” devices.

Huawei then aims to produce 20nm chips by late 2022, which could be used to make most of its 5G telecoms equipment and allow that business to continue even with the U.S. sanctions.
“The planned new production line will not help with the smartphone business since chipsets needed for smartphones need to be produced at more advanced technology nodes,” said a semiconductor industry executive briefed on the plans.

“But if it succeeds, it can become a bridge to a sustainable future for their infrastructure business, in combination with the inventory they have built and which should last for two years or so,” he said.

“They possibly can do it, in maybe two years,” said Mark Li, a semiconductor analyst at Bernstein in Hong Kong.

He added that although the chips Huawei needed for making mobile network base stations would ideally be made on 14nm or more advanced process technology, using 28nm was possible.


“Huawei can make up for the shortcomings on the software and system side,” he said. Chinese producers could tolerate higher costs and operational inefficiencies than their offshore competitors.

The project, first reported by Chinese newspaper Caixin last month, could also jump-start China’s ambitions to shake off its dependency on foreign chip technology, particularly from the U.S., which wants to slow China’s development as a technology power.

Huawei has already been investing in the domestic semiconductor sector, especially among smaller operators, a chip industry executive said.

“Huawei has strong abilities in chip design, and we are very happy to help a trustworthy supply chain develop its capabilities in chip manufacturing, equipment and materials. Helping them is helping ourselves,” rotating chairman Guo Ping told journalists in September.

What started as #Asian pivot for #America is now a full-blown containment strategy to check #China's power by "supporting India’s efforts to pose military dilemmas for China....." #India #Pakistan #CPEC #Asia https://www.dawn.com/news/1596983


The opening line (of "Rising to the China Challenge" report) declares: “The United States and China are locked in strategic competition over the future of the Indo-Pacific” and then goes on to paint a stark contrast between America’s “free and open” vision and the “closed and illiberal” future that the report sees China as envisioning. It then goes on to state that “managing the China challenge” should be the topmost priority of US foreign policy and that doing so will carry economic costs for Americans and require sacrifice and trade-offs. This makes it clear that the coming decade will be shaped by the US-China confrontation, with all the turmoil and scheming that this entails.

There’s a lot in the report that is meant to alarm or goad US policymakers into action, in keeping with the standard policy of exaggerating threats in order to justify a massive response. To summarise, the report warns that “China is poised to surpass the United States in gross domestic product, while racing ahead to gain technological advantage in key areas such as artificial intelligence, quantum computing, and genomics,” and that the US response must then be to compete in the domains of “economics, technology, diplomacy, ideology, governance, and human capital”. Which pretty much covers all bases.

The report notes that the US has an advantage in the number of regional allies and partners it has, such as Australia, Japan, South Korea and Thailand, and notably mentions India a total of 31 times. By contrast, the only mention of Pakistan is a hyphenated one, occurring in the context of the Indo-Pakistan border. And that brings us to exactly what the US intends to do for India in military terms with the aim of propping it up as a regional counterweight to China. In the report’s own language, this entails “supporting India’s efforts to pose military dilemmas for China, thereby providing low-cost means to complicate the ability of the People’s Liberation Army (PLA) to concentrate … on US strongholds in East Asia and the Western Pacific”, noting that while India “has the potential to contribute as a military counterweight to China”, its “structural impediments and resource constraints” have hampered it.

The report then spends a good amount of space on how to remove those impediments and relieve those constraints. It envisions an India armed with super and hypersonic anti-ship missiles along with the targeting systems needed to maximise the potential of these weapons. It also proposes making it easier for India to build and/or acquire more cutting-edge attack submarines. There is a focus on improving Indian military transportation infrastructure, allowing it to better redeploy forces on short notice. More crucially, it emphasises making “major investments in [Indian] electronic warfare, cyber offence and counterspace systems”, thus changing the Indian army’s approach from “territorial defence” to multi-domain dominance.

Interestingly, it also proposes turning a blind eye to Indian acquisitions of Russian defence technology so as to not corner Russia or inconvenience India. In that context, the report also proposes “removing barriers” to assistance to allied countries, which in this case means turning a blind eye to growing authoritarianism and Hindutva-led fascism in India. After all, principles are nice to have, but not at the expense of power. As for us, we know that while India may acquire capabilities against China, those capabilities will be first used against us. Will we be forced into a camp or can deft diplomacy reap us some benefits? Either way, things are about to get interesting, once again.

https://www.cnas.org/publications/reports/rising-to-the-china-chall...

THE world is undergoing a transformation of historic proportions. Two main drivers of this are the growing US-China rivalry and the scientific and technological revolution worldwide especially in the US, China, Western Europe and other developed countries. Both developments will have far-reaching implications for global politics, security and economy. Countries, which understand the fundamental forces driving the world and take steps to safeguard their national interests, will forge ahead of others who fail to understand the implications of the changes shaping the globe.

https://www.dawn.com/news/1598083

This prospect raises critical foreign policy and security issues for the consideration of Pakistan’s leaders and policymakers. The main foreign policy challenge confronting Pakistan would be to deepen its strategic cooperation with China in the face of the growing US-India strategic partnership while maintaining friendly ties with the US-led West which has its own importance in Pakistan’s political, economic and security calculations. The ramifications of the global geopolitical transformation in the Middle East, in the backdrop of the growing Indo-US-Israeli political, security and economic footprint in the region and the deep political divide between Iran and some of the GCC states, will pose their own set of difficult foreign policy choices for Pakistan.

The scientific and technological revolution unfolding in the US, China, Western Europe and other developed countries is another element driving the global transformation over and above the growing US-China rivalry. Developments in cutting-edge information technology ie semi-conductors, data, 5G mobile networks, internet standards, artificial intelligence and quantum computing particularly will help determine not only which country or countries have military edge but also a more dynamic economy.

Countries neglecting education, particularly science and technology, in their national development plans will increasingly become irrelevant in international politics with the passage of time. Unfortunately, Pakistan, which lags far behind in economic, scientific and technological development because of the short-sightedness of its leaders and policymakers, falls in this category. In the absence of necessary corrective steps by our government, the adverse consequences of our flawed policies will continue to haunt us far into the future.

Lack of #Computer Chips Disrupts #Automobile Factories Worldwide. #Semiconductor chips are used in touch screens, engine controls & transmissions, communications, suspensions, anti-lock brakes & collision avoidance systems with cameras and other sensors https://www.nytimes.com/2021/01/13/business/auto-factories-semicond...

Geopolitics also played a role. The Trump administration in September placed restrictions on Semiconductor Manufacturing International Corporation, China’s main foundry, which produces chips for cars and many other applications. The company’s customers began looking for alternatives, generating additional competition for chip supplies from other foundries, said Gaurav Gupta, a vice president at the research firm Gartner.

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The chip crisis is an example of how the pandemic has shaken the global economy in unpredictable ways. Carmakers expected to face supply chain shortages, and plants closed early in 2020 because of fear that workers would infect one another, or because trucking firms had stopped delivering. Most U.S. auto factories ceased production for roughly two months last spring.

Automakers braced for turmoil when the pandemic hit. They expected supply chain disruptions and plummeting sales. But they never figured that a year later one of their biggest problems would be PlayStations.

Strong demand for gaming systems, personal computers and other electronics by a world stuck indoors has sucked up supplies of semiconductors, forcing carmakers around the world to scramble for the chips that have become as essential to mobility as gasoline or steel.

Virtually no carmaker has been spared. Toyota Motor has shut down production lines in China. Fiat Chrysler Automobiles temporarily stopped production at plants in Ontario and Mexico. Volkswagen has warned of production problems at factories in China, Europe and the United States. Ford Motor said last week that it was idling a Louisville, Ky., factory for a week because of the shortage.

When Covid-19 hit, automakers slashed orders for chips in anticipation of plunging sales. At the same time, semiconductor makers shifted their production lines to meet surging orders for chips used in products like laptop computers, webcams, tablets and 5G smartphones.

-----------

Businesses also upgraded their digital infrastructure to handle online meetings and employees working from home, while telecommunications companies invested in broadband infrastructure, further fueling demand for semiconductors.

Then auto sales bounced back faster than expected at the end of 2020, catching everyone off guard. The shortages of chips that ensued are expected to last well into 2021, because it can take semiconductor makers six to nine months to realign production.

“Consumer electronics exploded,” said Dan Hearsch, a managing director at the consulting firm AlixPartners. “Everybody and their brother wanted to buy an Xbox and PlayStation and laptops, while automotive shut down. Then automotive came back faster than expected, and that’s where you get into this problem.”

While the shortage is not expected to cause auto prices to rise very much, buyers might have to wait longer to get the vehicles they want.

The chip shortage has its roots in long-term forces reshaping the auto and semiconductor industries, as well as short-term confusion from the pandemic.

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“Future investment in these foundries will therefore be critical so that the automotive industry can avoid such supply chain upheavals in the future,” Continental said in a statement.

Infineon, based in Munich, said it was stepping up investment in new production capacity in 2021 to as much as 1.5 billion euros, or $1.8 billion, from €1.1 billion in 2020. The company is also ramping up production at a new chip factory in Villach, Austria, that will produce 12-inch wafers.

China is home to 1.87 million scientific researchers, the most in the world, and a growing number of high tech giants such as Huawei, Tencent and ZTE.

https://asia.nikkei.com/Politics/International-relations/China-rise...


Despite recent efforts by the Kremlin to stimulate the domestic tech sector, Russia has not enjoyed similar success. Experts warn that Russia is falling behind in key emerging technologies such as artificial intelligence, and that unless that changes, its defense industry will have a difficult time keeping up with China and the U.S.

"Russia doesn't have giants like Microsoft or Huawei that produce technologies that can be used for civilian and military purposes," said Kozyulin of the PIR Center. "Instead, the government itself has to create everything from scratch, which is very costly."

As China has become more advanced, Russia has begun exploring opportunities to codevelop weaponry with Beijing. In 2016, the two countries partnered to develop and produce over 200 next-generation heavy lift helicopters for the PLA by 2040. Another major collaboration was announced in August, when Russia arms officials revealed that Moscow and Beijing had begun working on developing a new non-nuclear submarine.

"It's pretty clear that Russia is transitioning to a technology transferring and subcontracting role, since although China can now make many of its own systems, it still lacks Russia's tremendous amount of engineering experience and ability to develop a lot of key components," said Michael Kofman, director of the Russia program at the Washington-based CNA military research center.

But other experts are skeptical that such an arrangement is sustainable in the long run. Siemon Wezeman, a senior researcher at the SIPRI Arms and Military Expenditure Programme, argued that Moscow could be falling too far behind to keep Beijing interested.

"I expect the Russians to be completely out of the picture for the Chinese as a provider of technology within five to 10 years," he said. "The Russians will be looking to see if they can somehow get their hands on Chinese technology because the Russians are falling behind, and in some cases they're not getting anywhere anymore."

Wezeman added that in the long run, it is even possible that China will push Russian arms manufacturers out of their traditional markets in Africa, the Middle East and Latin America. He warned that China is well-positioned to outcompete Russia in these markets, since unlike Moscow, Beijing can bundle arms deals together with lucrative economic agreements.

"There is no real reason for those countries to go with the Russians if they can get something similar or better from the Chinese," Wezeman said. "In a way the Chinese probably have more to offer, not only in terms of the weapons, but also all kinds of other arrangements."

----------

China passes US as world's top researcher, showing its R&D might. TOKYO -- China has outstripped the U.S. in putting out research papers in the natural sciences, data released Friday shows, further illustrating its emerging dominance in scientific investigation.Aug 8, 2020


https://asia.nikkei.com/Business/Science/China-passes-US-as-world-s...


https://www.nippon.com/en/japan-data/h00809/

Pakistan’s Performance in Global Impact Factor Race


https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6115561/


Pakistan is a home to more than 200 million people, 189 Higher Education Commission (HEC) chartered universities and degree awarding institutes4 including 29 medical universities, 157 medical schools5 125 engineering, 92 management sciences and 28 agricultural institutes.4

In Pakistan, there are 371 HEC indexed journals in various academic disciplines of science and social sciences4. In the last week of June 2018, Philadelphia USA based, a notable indexing institute, Thomson Reuters, Institute of Scientific Information (ISI) Web of Science, currently known as “Clarivate Analytics” released a global science and social science journals Impact Factor (IF) list of year 2017.6

Impact factor represents the total number of citations to a journal’s articles divided by the number of articles published during the previous two years. It is widely used in the academic world as a yardstick of a journal’s prestige. From Pakistan, out of 371 only 12 (3.24%) academic journals have achieved a place in ISI-Web of Science.

Worldwide, 12271 science and social sciences journals are indexed in the ISI-Web of Science, their IF is ranging from 0.001 to 244.58.6 The Cancer Journal for Clinicians USA achieved a top position in the world with Impact Factor 244.58. The other top ranking journals are New England Journal of Medicine USA 79.25; Lancet USA 53.24; Nature UK 41.57; and Science USA 41.05.6 These journals are leading the world and have maintained their topmost positions in the global IF race.

In our environs, China is leading the region with 203 academic journals achieved a remarkable position in ISI Web of science with IF 0.0045 to 15.393. India has 104 with IF 0.096 to 2.658; Iran 42 IF 0.280 to 2.667; Pakistan 12 IF 0.280 to 1.217; and Bangladesh has 4 with IF 0.214 to 1.532. Only one Journal from Pakistan, “Pakistani Veterinary Journal” exceeds the IF 1.217.6

While comparing the quartile factor of the journals, subject category in percentile rank, the top 25% of journals in a particular category are placed in Q1, next in Q2 and so on. 41 Chinese journals achieved a position in first quartile Q1, Q2: 63, Q3:57 and 62 journals in Q4. India has Q1: 0, Q2: 4, Q3: 26 and in Q4:74. Iran has 42 academic journals from them Q1: 1, Q2: 4, Q3: 12 and in Q4:25. However, Bangladesh has 4 ISI-Web of Science indexed journals only one journal placed a position in Q3 and 3 in Q4.6

The quartile ranking of Pakistani journals is: 2 journals in both Q2 and Q3 and the remaining 8 journals are in Q4. Only one Journal, Pakistan Veterinary Journal exceeds the IF 1.217 and two journals placed a position in quartile 2.6

In medical sciences, Pakistan Journal of Medical Sciences achieved an IF 0.719; Journal of Pakistan Medical Association IF 0.718; Journal of College of Physicians and Surgeons of Pakistan- JCPSP IF 0.439.6 These medical sciences journals are establishing a platform to publish quality research but still the road is rutted and needs its renewal. They should fascinate the international science community and enhance the research visibility in the global science to upsurge the IF and quartile ranking of the academic journals to compete internationally. Sadly, few Pakistani journals, which are celebrating their golden anniversaries of 50 years, have yet still failed to achieve a place in ISI Web of Science.

China’s Ascent
The rise of China will have far-reaching consequences—the world should get ready
By Keyu Jin

https://www.imf.org/external/pubs/ft/fandd/2019/06/rise-of-china-ji...

China in 2040 will look on the face of things to be a mighty economic power. Under plausible projections, it will have firmly established itself as the largest economy in the world, with 60 to 70 percent of the US income level. But in 20 years, China will still be a developing economy by many measures—its financial development will lag its economic development, and many economic and policy distortions may still persist.

In that scenario, the world must be prepared for China to be its first systemic emerging market economy. It should brace for greater volatility and uncertainty as China becomes more intermeshed with global financial markets. It should prepare for a China that emits shocks distinctive to developing economies—but on a much larger scale and with greater thrust and impetus.

Every significant policy move, stock market panic, and cyclical upswing or downswing in China can plausibly diffuse and propagate through the web of financial networks that links nations. In China today, 70 percent of investors in capital markets are retail investors, quick to react to noise and changes in sentiment. Mercurial stock markets and volatile exchange rates may become the rule, not the exception.

Currently, China is already inadvertently sending shocks to the rest of the world, despite its small international financial exposure. My own research with Yi Huang shows that it is not only policy shocks (monetary and fiscal) that spill over to the rest of the world but also the shocks of policy uncertainty.

In a country where reforms big and small happen on a regular basis, where policy moves often instigate cyclical fluctuations rather than subdue them, where policy direction and strategy are based on experimentation rather than experience, uncertainty can be a first-order menace to overly sensitized financial markets.

Our research shows that during 2000–18, Chinese policy uncertainty shocks significantly affected not only economic variables, such as world industrial production and commodity prices, but also key financial variables, including global stock prices and bond yields, the MSCI World Index, and financial volatility.

Now imagine China in 2040, more consequential and with a greater number of channels open to the rest of the world—whether cross-border bank lending, portfolio holdings, capital flows, or a more dominant renminbi. In that scenario, shocks emanating from China would not only propagate more swiftly and potently, they would also be amplified and expanded through its increasing and diverse financial channels.

The rise of China today bears much similarity to the ascent of the United States in the late 19th century. Although it was growing rapidly and catching up with European countries, it had the developing economy malaise of unsophisticated capital markets. Corporate governance was riddled with problems and banking crises occurred regularly; weak financial intermediaries and a shortage of financial assets, along with the absence of a lender of last resort, prevented the efficient mobilization of capital. The vagaries of the US economy and the financial panic in 1873 were fully transmitted to Europe and Great Britain, which had significant exposure to the US economy.

The shape of China’s recovery

By Keyu Jin

Fortunately, although the government’s short-term recovery measures have slowed progress on longer-term reforms, its post-pandemic spending spree is more targeted than last time, and thus unlikely to fuel another credit bubble. Among the most notable features of this package is its emphasis on investments in innovation. In the name of building “new infrastructure,” the government is redirecting resources from traditional projects to data centers, artificial-intelligence applications, and electric-vehicle charging stations, increasing investment in high-tech manufacturing and services by nearly 10% over the course of the year.

This suggests that we should expect a continued commitment to opening up the economy, particularly in financial services. Chinese policymakers recognize that the domestic financial system needs to become more competitive and more closely integrated with Western institutions and corporations amid heightening geopolitical tensions.

----------

China’s economy is on the road to recovery after the COVID-19 shock in the spring of 2020. Negative growth rates in investment, manufacturing activity, and consumption have reversed course and moved into positive territory, and some indicators, such as exports, have even beaten expectations, registering a positive growth rate of more than 10% in the third quarter of the year.

How an economy recovers from an economic shock determines how robust its recovery will be. Back in 2009, the Chinese government’s 4 trillion yuan ($605 billion) stimulus plan following the global financial crisis fueled a credit boom, which inflated the shadow-banking sector and sent debt levels soaring to alarming heights.

To be sure, China’s overall response salvaged the economy and maintained impressive growth rates. But as investment flooded into infrastructure projects and housing, and onto the balance sheets of large state-owned enterprises, it created even more economic distortions than there had been before the crisis. Overall productivity growth would remain diminished for the next decade.

This time around, China’s recovery is again based on a large stimulus plan, coupled with measures to control the virus so that work and other economic activities can resume. But much of the spending so far has come from the public sector rather than private enterprise. Moreover, recent figures show that China’s post-COVID rebound has been led by investments in infrastructure and housing, whereas consumption growth has been sluggish and nowhere near the pre-crisis trend.

Even though people are safe going about their normal lives, the service sector is still nowhere near a true recovery. Out of an abundance of caution, people are saving more and going out less. This trend could bode ill not just for China but also for the rest of the world, since it may be an indication of what awaits other economies.

#Superpower status will depend on #semiconductor chips. #TSMC building world's largest $20 billion fab in #Taiwan to manufacture chips at dimensions of just 3 nanometers that'll power everything from latest iPhones to medical equipment to F-35 fighters. https://www.ft.com/content/44e28cad-55b7-4995-a5c5-6de6f9733747


This vast capital expenditure highlights the near-insatiable demand for computer chips, the dominance of Taiwanese chipmakers and the sophistication of modern manufacturing. TSMC’s chips power everything from Apple’s latest iPhones to medical equipment to F-35 warplanes, accounting for about 55 per cent of global semiconductor sales.

But the manufacture of semiconductors is becoming a geopolitical imperative, too. As part of its squeeze on China’s tech industry, the US has pressured TSMC to stop supplying Huawei, previously one of its biggest customers. China, which spends more on importing computer chips than oil, is developing a semiconductor industry to reduce dependence on overseas suppliers. 

Sensing their own vulnerability, the US, Japan and the EU are also stepping up their efforts to develop indigenous semiconductor industries, as their carmakers and computer games companies wail about the lack of supply. Computer chips currently vie with vaccines as must-have resources for any nation state.

If military capability in previous centuries was built on breech-loading rifles, warships or atomic bombs, it may well depend in the 21st century on the smartest use of advanced chips. The centrality of TSMC to the global semiconductor industry is sometimes given as a reason why mainland China might yet invade Taiwan. But far bigger military and political considerations will determine Beijing’s course of action.

By any measure, TSMC is an extraordinary company which is reaping the benefits of out-investing its rivals. It has just announced that its capital spending will further increase to between $25bn and $28bn this year as it struggles to add capacity fast enough to match demand. During an earnings call last month, CC Wei, TSMC’s chief executive, said that surging sales of smartphones and high-performance computers and the adoption of 5G mobile technology were fuelling demand for the company’s leading-edge logic chips. “We believe that 5G is a multiyear megatrend that will enable a world where digital computation is increasingly ubiquitous,” he said.

Most other semiconductor companies have dropped out of the race to manufacture 3nm chips due to the stratospheric costs. It will now be hard for any rival to catch up with TSMC because of its vast capital spending, its technological expertise, its network of suppliers and its support from the Taiwanese government. Only Samsung of South Korea is visible in its rear-view mirror.

“What separates TSMC from other foundries is its appetite to take risks and its ability to execute. It is an incredible business model,” says Brett Simpson, a tech analyst at Arete, an independent research firm. “The market is heading for one dominant player and one subscale player that is hanging in there and executing very well.”

The bigger concern for TSMC is the geopolitical tension between the US and China. With two fabrication plants in China, one in the US state of Washington and another planned in Arizona, TSMC has been hedging its bets. But like many other companies in a fast-polarising world, it is being forced to choose.

Shelley Rigger, a professor at Davidson College in North Carolina and author of Why Taiwan Matters, says that US pressure on China is only reinforcing Beijing’s determination to become self-sufficient in semiconductor manufacturing: “China has infinite money to throw at a problem like this and no scruples about doing what needs to be done.”

Taiwan has long feared that the world could divide into Chinese-dominated red supply chains and US-focused blue supply chains, jeopardising relations with either its biggest trading partner or its main strategic ally. The island’s room for manoeuvre is becoming as thin as TSMC’s wafers.

#Biden's #China Policy: #US “should put less focus on trying to slow China down and more emphasis on trying to run faster ourselves”. #America's common anti-China policy with #Japan, #SouthKorea, #India and #Australia #geopolitics #Quad #Asia #IndoPacific https://www.nytimes.com/2021/03/17/us/politics/us-china-relations.html

President Biden is engineering a sharp shift in policy toward China, focused on gathering allies to counter Beijing’s coercive diplomacy around the world and ensuring that China does not gain a permanent advantage in critical technologies.

At first glance, it seems to adopt much of the Trump administration’s conviction that the world’s two biggest powers are veering dangerously toward confrontation, a clear change in tone from the Obama years.

But the emerging strategy more directly repudiates the prevailing view of the last quarter century that deep economic interdependence could be counted on to temper fundamental conflicts on issues like China’s military buildup, its territorial ambitions and human rights.

It focuses anew on competing more aggressively with Beijing on technologies vital to long-term economic and military power, after concluding that President Donald J. Trump’s approach — a mix of expensive tariffs, efforts to ban Huawei and TikTok, and accusations about sending the “China virus” to American shores — had failed to change President Xi Jinping’s course.

The result, as Jake Sullivan, President Biden’s national security adviser, put it during the campaign last year, is an approach that “should put less focus on trying to slow China down and more emphasis on trying to run faster ourselves” through increased government investment in research and technologies like semiconductors, artificial intelligence and energy.

Mr. Sullivan and Secretary of State Antony J. Blinken will road-test the new approach in what promises to be a tense first encounter on Thursday with their Chinese counterparts in Anchorage. It is a meeting they delayed until they could reach the outlines of a common strategy with allies — notably Japan, South Korea, India and Australia — and one they insisted had to take place on American soil.

But it will also be a first demonstration of Beijing’s determination to stand up to the new administration, and a chance for its diplomats to deliver a litany of complaints about Washington’s “evil” interference in China’s affairs, as a Chinese Foreign Ministry spokesman put it on Wednesday.

The United States imposed sanctions on 24 Chinese officials on Wednesday for undermining Hong Kong’s democratic freedoms, an action whose timing was pointed and clearly intentional. Mr. Blinken said in Tokyo this week that “we will push back if necessary when China uses coercion or aggression to get its way.”

And that is happening almost daily, he conceded, including Beijing’s efforts to terminate Hong Kong’s autonomy, intimidate Australia and Taiwan, and move ahead, despite international condemnation, with what Mr. Blinken has said is a “genocide” aimed at China’s Uyghur minority.

It is all part of the initial resetting of the relationship that has marked Mr. Biden’s renewed, if now far more tense, encounters with Mr. Xi.

Back when Mr. Biden was vice president and Mr. Xi was consolidating power on his way to becoming China’s most powerful leader in decades, the two men met in China and the United States and offered public assurances that confrontation was not inevitable.

The intelligence assessment inside the American government at the time was that Mr. Xi would proceed cautiously, focus on economic development at home and avoid direct confrontation with the United States.

Mr. Biden, Enough With the Tough Talk on China
Modest measures can reverse the dangerous decay in relations.

Ian Johnson
By Ian Johnson
Mr. Johnson was a China correspondent for two decades.

March 19, 2021

These harsh exchanges will only contribute to the dangerous decay in relations between the world’s two most powerful countries. Both sides seem to be trapped by a need to look and sound tough. That stance may play well domestically in both countries, but it complicates doing what is really needed: engaging, with realistic expectations, with the other side.


https://www.nytimes.com/2021/03/19/opinion/us-china-biden.html

Since taking office nearly two months ago, the Biden administration has been a whirlwind of activity in reforming and revisiting almost every key problem area but one: the chaotic and incoherent China policy it inherited from the Trump administration.

Top U.S. and Chinese officials met Thursday in Alaska for the first time since the new administration took power. The meeting, framed as little more than a chance for each side to state their well-known positions, fell short of even those low expectations.

In a series of blunt remarks, U.S. Secretary of State Antony J. Blinken said that the U.S. government had “deep concerns with actions by China, including in Xinjiang, Hong Kong, Taiwan, cyberattacks on the United States and economic coercion toward our allies” — actions, he said, that “threaten the rules-based order that maintains global stability.” In a lengthy presentation that went well over the agreed-upon time limit, China’s top diplomat, Yang Jiechi, countered that the United States was the “champion” of cyberattacks and that “many people within the United States actually have little confidence in the democracy of the United States.”

These harsh exchanges will only contribute to the dangerous decay in relations between the world’s two most powerful countries. Both sides seem to be trapped by a need to look and sound tough. That stance may play well domestically in both countries, but it complicates doing what is really needed: engaging, with realistic expectations, with the other side.

Now that each government has had its say, the United States should take the high ground and find ways to reduce tensions, even if those can partly be blamed on China’s recent actions.

One way forward would be to reverse some of the Trump administration’s burn-the-bridges measures, like its ending academic exchanges, expelling Chinese journalists and closing consulates.

The Biden administration has sought to characterize its China policy as more nuanced than that of the Trump White House. Shortly after taking office, the president said that the United States sought “extreme competition” with China but not conflict. Mr. Blinken said in Tokyo this week, during his first official trip abroad, “The relationship with China is a very complex one: It has adversarial aspects; it has competitive aspects; it has cooperative aspects.”

But the administration’s actions so far have largely followed the Trump playbook.

U.S., China exchange strong words, but both label talks constructive

https://www.pbs.org/newshour/show/u-s-china-exchange-strong-words-b...


Susan Thornton:

Yes, I think this meeting was about restarting diplomacy with China after a four-year hiatus, basically, under the previous administration.

And you do diplomacy to engage counterparts in private to try to find a way forward on areas where you have overlapping interests. And Secretary Blinken mentioned there at the end a number of areas, North Korea, Afghanistan, Iran, climate change, where there are overlapping interests.

And to sit together with the other side and find out where those areas are and a way forward, that's the art of the goal. So I think that the circus in front of the cameras to start off was a bit unfortunate. I am not sure that that is necessarily a productive way to start this off, but it looks like they were able to savor something for the end.

---------

Susan Thornton:

I think that there is a lot of continuity that we see with Xi Jinping. And I am not that surprised by anything we see in China.

There's — it is not coming out of the blue. Certainly, there has been regression on human rights and in a lot of practices domestically, in China's domestic politics, certainly now also vis-a-vis the United States. They are starting to pursue a policy of indigenization of their technological industries.

But I think, in general, the error that the U.S. makes is in thinking that we are going to have some kind of fundamental way of changing China. I personally don't think China represents an existential threat. I think we need learn to live with China and coexist. They are not going anywhere, but we are probably not going to be able to change them fundamentally.

Fareed Zakaria on GPS March 21, 2021:

"Consider two contrasting exercises of power. America's F-35 fighter jet program, devilled by cost overruns and technical problems, will ultimately cost taxpayers $1.7 trillion according to a document obtained by Bloomberg. China will likely spend a comparable amount of money on the belt and road initiative, an ambitious set of loans, aid and financing for infrastructure projects across the world aimed at creating greater interdependent with dozens of countries that are important to Beijing."

http://transcripts.cnn.com/TRANSCRIPTS/2103/21/fzgps.01.html

Global Trends 2024 "A More Contested World": Why #US #Spy Agencies Say the Future Is Bleak as Competition with #China Ratchets up in the Next 20 years. #Climatechange, #technology, #pandemics and #financial crises will pose big challenges for the world. https://www.nytimes.com/2021/04/15/opinion/global-trends-intelligen...

The world envisioned in the 144-page report, ominously subtitled “A More Contested World,” is rent by a changing climate, aging populations, disease, financial crises and technologies that divide more than they unite, all straining societies and generating “shocks that could be catastrophic.” The gap between the challenges and the institutions meant to deal with them continues to grow, so that “politics within states are likely to grow more volatile and contentious, and no region, ideology, or governance system seems immune or to have the answers.” At the international level, it will be a world increasingly “shaped by China’s challenge to the United States and Western-led international system,” with a greater risk of conflict.

Here’s how agencies charged with watching the world see things:

“Large segments of the global population are becoming wary of institutions and governments that they see as unwilling or unable to address their needs. People are gravitating to familiar and like-minded groups for community and security, including ethnic, religious, and cultural identities as well as groupings around interests and causes, such as environmentalism.”

“At the same time that populations are increasingly empowered and demanding more, governments are coming under greater pressure from new challenges and more limited resources. This widening gap portends more political volatility, erosion of democracy, and expanding roles for alternative providers of governance.”

“Accelerating shifts in military power, demographics, economic growth, environmental conditions, and technology, as well as hardening divisions over governance models, are likely to further ratchet up competition between China and a Western coalition led by the United States.”

“At the state level, the relationships between societies and their governments in every region are likely to face persistent strains and tensions because of a growing mismatch between what publics need and expect and what governments can and will deliver.”

Experts in Washington who have read these reports said they do not recall a gloomier one. In past years, the future situations offered have tilted toward good ones; this year, the headings for how 2040 may look tell a different story: “Competitive Coexistence,” “Separate Silos,” “Tragedy and Mobilization” or “A World Adrift,” in which “the international system is directionless, chaotic, and volatile as international rules and institutions are largely ignored by major powers like China, regional players and non-state actors.”

There is one cheery scenario thrown in, “Renaissance of Democracies,” in which the United States and its allies are leading a world of resurgent democracies, and everybody is getting happier. Its apparent purpose is to show that people could, in principle, turn things around. But nothing in the report suggests it is likely.

The gloom, however, should not come as a surprise. Most of what Global Trends provides are reminders of the dangers we know and the warnings we’ve heard. We know that the world was ill prepared for the coronavirus and that the pandemic was grievously mishandled in most parts of the world, including the United States. We know the Arctic caps are melting at a perilous rate, raising sea levels and threatening dire consequences the world over. We know that for all the grand benefits of the internet, digital technology has also unleashed lies, conspiracies and distrust, fragmenting societies and poisoning political discourse. We know from the past four years what polarized and self-serving rule is like. We know that China is on the rise, and that it is essential to find a manageable balance between containment and cooperation.

Chip shortage highlights U.S. dependence on fragile supply chain - 60 Minutes - CBS News

https://www.cbsnews.com/news/semiconductor-chip-shortage-60-minutes...

Lesley Stahl: Should Americans be concerned that most chips are being manufactured in Asia today?

Mark Liu: I understand their concern, first of all. But this is not about Asia or not Asia I mean, the shortage will happen no matter where the production is located because it's due to the COVID.

Lesley Stahl: But Pat Gelsinger at Intel talks about a need to rebalance the supply chain issue because so much, so many of the chips in the world now are made in Asia.

Mark Liu: I think U.S. ought to pursue to run faster, to invest in R&D, to produce more Ph.D., master, bachelor students to get into this manufacturing field instead of trying to move the supply chain, which is very costly and really non productive. That will slow down the innovation because-- people trying to hold on their technology to their own and forsake the global collaboration.

Within the world of global collaboration there's intense competition. Days after Intel announced spending $20 billion on two new fabs, TSMC announced it would spend $100 billion over three years on R&D, upgrades, and a new fab in Phoenix, Arizona, Intel's backyard, where the Taiwanese company will produce the chips Apple needs but the Americans can't make.

Mark Liu: That was a big investment.

But there's a looming shadow over TSMC, which supplies chips for our cars, iPhones, and the supercomputer managing our nuclear stockpile: China's President Xi Jinping, who has intensified his long-time threat to seize Taiwan.

China's attempts to develop its own advanced chip industry have failed and so it's been forced to import chips. But last year, Washington imposed restrictions on chipmakers from exporting certain semiconductors to china. Both Liu and Gelsinger fear the escalating trade war with China may backfire, and in Intel's case: could hurt business.

Lesley Stahl: Are they your biggest customer?

Pat Gelsinger: China is one of our largest markets today. You know, over 25% of our revenue is to Chinese customers. We expect that this will remain an area of tension, and one that needs to be navigated carefully. Because if there's any points that people can't keep running their countries or running their businesses because of supply of one critical component like semiconductors, boy, that leads them to take very extreme postures on things because they have to.

The most extreme would be China invading Taiwan and in the process gaining control of TSMC. That could force the U.S. to defend Taiwan as we did Kuwait from the Iraqis 30 years ago. Then it was oil. Now it's chips.

Lesley Stahl: The chip industry in Taiwan has been called the Silicon Shield.

Mark Liu: Yes.

Lesley Stahl: What does that mean?

Mark Liu: That means the world all needs Taiwan's high-tech industry support. So they will not let the war happen in this region because it goes against interest of every country in the world.

Lesley Stahl: Do you think that in any way your industry is keeping Taiwan safe?

Mark Liu: I cannot comment on the safety. I mean, this is a changing world. Nobody want these things to happen. And I hope-- I hope not too-- either.

Shortage of #semiconductors, dubbed the 'new oil,' could dent #GDP growth, boost #inflation. "While semiconductors account for only 0.3% of US output, they are an important production input to 12% of GDP” #technology #SiliconValley #Intel #TSMC #Samsung https://cnb.cx/2RVCitw


KEY POINTS
A variety of factors have converged to make coveted semiconductors scarce.
Goldman Sachs says the GDP hit from the shortage could be 0.5% this year while price increases could hit 3% for affected goods.
TS Lombard economist Rory Green calls semis the “new oil” for the global impact that disruptions can cause.

Economic growth could slow and inflation is likely to see at least a momentary bump higher as the semiconductor shortage worsens, economists say.

A variety of factors have converged to make the coveted computer chips scarce. Soaring demand coupled with supply bottlenecks have led to a situation in which orders for everything from cars to televisions to touch-screen computers and more are on backup for six months or more.

With semis at the core of so much U.S. economic activity, the ongoing supply problems are likely to have ripples.

Goldman Sachs economists say that for the bulk of 2021, the shortage will translate into an inflationary tax that could result in prices rising as much as 3% for affected goods. That would boost inflation as much as 0.4 percentage points through the rest of the year, the firm said.

“Taken together, while we see relatively modest implications of the semiconductor shortage for GDP growth and the industrial sector, it represents another reason to expect core goods inflation to remain firm this year,” Goldman economist Spencer Hill said in a note.

Even though the hit won’t cause a dramatic slowdown to an economy expected to roar in 2021, the impact could still be noticeable. Goldman said the impact could reach as high as a 1% subtraction from activity, but likely will be closer to 0.5%.

Disruptions to the ‘new oil’
“While semiconductors account for only 0.3% of US output, they are an important production input to 12% of GDP,” Hill said, nothing that the shortage could cut auto production by 2% to 6% this year.

Indeed, multiple automakers have curtailed production due to lack of chips vital to their vehicles.

Stellantis NV said it will be temporarily laying off workers at its Detroit Jeep plant, while Volvo also has said the chip issues will cause it to shut some plants until the situation is resolved.

The knock-on impacts of any disruptions in the semiconductor industry are becoming increasingly apparent.

“As the world becomes more interconnected, more automated and greener, each unit of GDP growth will contain a higher content of semiconductors. Integrated circuits are becoming the key commodity input for economic activity,” wrote TS Lombard economist Rory Green.

Green calls semis the “new oil” for the global impact that disruptions can cause.

“The current severe shortage of semiconductors, which is halting automotive production worldwide, underscores the speed and scale of the changes under way,” he said. “Chips have always been an important part for manufacturing and consumer electronics, but their use will broaden to transport and digital services.”

Still, Goldman’s Hill said the inflationary impact likely won’t last far as supply increases later this year and into 2022. But the shortage now “represents another reason to expect core goods inflation to remain firm this year,” he said.

The new geopolitics of global business | The Economist


https://www.economist.com/leaders/2021/06/05/the-new-geopolitics-of...


Amazon’s near-death experience was part of the dotcom crash that exposed Silicon Valley’s hubris and, along with the $14bn fraud at Enron, shattered confidence in American business. China, meanwhile, was struggling to privatise its creaking state-owned firms, and there was little sign that it could create a culture of entrepreneurship. Instead the bright hope was in Europe, where a new single currency promised to catalyse a giant business-friendly integrated market.

Creative destruction often makes predictions look silly, but even by these standards the post-pandemic business world is dramatically different from what you might have expected two decades ago. Tech firms comprise a quarter of the global stockmarket and the geographic mix has become strikingly lopsided. America and, increasingly, China are ascendant, accounting for 76 of the world’s 100 most valuable firms. Europe’s tally has fallen from 41 in 2000 to 15 today.

Top 100 Tech Firms by valuation:

US 58, Europe 11, China 8, Japan 6, Taiwan 6, South Korea 3, Canada 3, Israel 2, Australia 1, Bermuda 1, UK 1


Top 10 Tech Firms by valuation

US 6, China 2, Taiwan 1, South Korea 1

https://companiesmarketcap.com/tech/largest-tech-companies-by-marke...

#US Senate overwhelmingly passes $250 billion #tech #investment bill aimed at countering #China. The money will be invested in #American #manufacturing and #technology to meet #economic & #strategic challenge from China. #semiconductors #AI #geopolitics https://ti.me/3g5kDZP

Also added to the new bill was a separate initiative that provides $52 billion in incentives and grant programs to bolster domestic semiconductor manufacturing, sought by Republican Senators John Cornyn of Texas and Tom Cotton of Arkansas and Democrats Mark Kelly of Arizona and Mark Warner of Virginia.

The move was cheered by those in the industry, following months of complaints from manufacturers that a semiconductor shortage was hampering the delivery of everything from consumer electronic devices to pickup trucks.

“Semiconductors form the nerve center of America’s economy, national security, and critical infrastructure,” said John Neuffer, the president and CEO of the Semiconductor Industry Association. “We look forward to working with leaders in the administration and Congress to swiftly enact needed federal investments in chip technology to help ensure more of the chips our country needs are researched, designed and manufactured on U.S. shores.”

Darpa Money
That money, along with another $2 billion for related programs, would be available upon the law’s passage. The other spending in the bill would be subject to the appropriations process. An amendment from Senator Ben Sasse, a Republican from Nebraska, would also authorize an additional $17.5 billion for the Defense Advanced Research Projects Agency — or Darpa — over a period of five years.

Some Republicans rejected the idea of the government directing research and industrial policy.

“Maintaining our technological superiority over China requires punishing bad Chinese behavior and relying on the natural innovative entrepreneurship of America’s market economy, not by imitating Chinese central planning,” Pennsylvania GOP Senator Pat Toomey said in a statement before voting against the bill.

Senate GOP leader Mitch McConnell, who had criticized earlier versions of the bill as “not ready for prime time” and weak on defense, said the legislation was an important step forward and a rare area of bipartisan compromise, but should not be the “final word” on U.S. competition with China.

“Needless to say, final passage of this legislation cannot be the Senate’s final word on our competition with China,” McConnell said on the Senate floor. “It certainly won’t be mine.”

#China appoints Harvard-educated chip czar to accelerate domestic #semiconductor #manufacturing #technology. Vice Premier Liu will be in charge of industrial policy to catch up with #US, #Taiwan and #SouthKorea in advanced #semiconductors. https://asiatimes.com/2021/06/is-the-us-chip-wall-starting-to-crumble/

The Harvard-educated career bureaucrat is not an engineer, but more of an expert in economics and industrial policy.

That means the 69-year old Liu will have to rely on experts when it comes to decisions in his remit: semiconductor materials, equipment and processes.

But rather than merely catch-up, Liu’s chip strategy will likely be to explore areas rivals have yet to master in the hope that China can colonize these technologies.

It’s the kind of moonshot approach that the People’s Republic already practices. China last week released the first images taken on Mars as part of its Tianwen-1 interplanetary mission.

That success, according to Beijing-based consultancy Trivium, “validates the focus on pursuing leapfrog development,” focusing on next-generation technologies where no country has a clear advantage.

-------------

“Failure is not an option” is an epic phrase associated with Gene Kranz and the Apollo 13 Moon landing mission, which went terribly wrong, but ended happily thanks to some Mission Control heroics.

Likewise, with a newly-appointed vice premier at the microchip helm, China is leaving itself no more excuses to fail.

The nation’s decision to anoint a “chip czar” is the latest step to advance its semiconductor industry in the face of harsh US sanctions.

While China still has a ways to go in catching up to the US, Taiwan and South Korea, Vice Premier Liu He is a worthy choice to spearhead the development of future semiconductor technologies, Business Standard reported.

He’s headed China’s technology reform since at least 2018, acted as chief negotiator in US-China trade talks and his position within leader Xi Jinping’s inner circle ensures his recommendations get heard.

----------


Beijing is right to trumpet this success in space, and the results ought to boost morale within its struggling chip sector.

According to the South China Morning Post, China’s output of integrated circuits (IC) in May reached an all-time, single month high, as the country pulled out all stops to produce chips, according to central government data.

China’s chip output in May surged 37.6% from a year ago, to 29.9 billion units, the National Bureau of Statistics date showed.

While China’s chip makers are not able to produce high volumes of advanced 14-nm node chips — the type needed to power the latest iPhones — the country’s chip designers and manufacturers can produce mature technology ICs for home appliances and automobiles, SCMP reported.

In the first five months of this year, China produced 139.9 billion IC units, a 48.3% surge compared to the same period last year, data showed.

The latest data confirms that China is sparing no effort in its pursuit of self-sufficiency in semiconductors, SCMP reported.

In March, Beijing moved to waive levies on imported semiconductor parts and materials until 2030, SCMP reported. The Chinese government has declared its ambition to cultivate a US$237 billion domestic component market by 2023.

Meanwhile, Huawei Technologies is adamant in its pursuit of developing world-beating semiconductors, despite toughened US sanctions, according to Catherine Chen, a Huawei director and senior vice-president, Nikkei Asia reported.

Chen said the company has no intention of restructuring chip design subsidiary HiSilicon, despite the fact it has more than 7,000 workers on its payroll and is expected to go years without contributing to earnings.

But Huawei is privately held and unaffected by external forces, and its management has clearly shown it intends to retain HiSilicon, Chen said.

Xi Jinping Picks Top Lieutenant to Lead China’s Chip Battle Against U.S.


https://www.bloomberg.com/news/articles/2021-06-17/xi-taps-top-lieu...


Liu He, Xi’s economic czar whose sprawling portfolio spans trade to finance and technology, has been tapped to spearhead the development of so-called third-generation chip development and capabilities and is leading the formulation of a series of financial and policy supports for the technology, according to people with knowledge of the matter.

It’s a nascent field that relies on newer materials and gear beyond traditional silicon and is currently an arena where no company or nation yet dominates, offering Beijing one of its best chances to sidestep the hurdles slapped on its chipmaking industry by the U.S. and its allies. The sanctions, which emerged during Donald Trump’s presidency, have already smothered Huawei Technologies Co.’s smartphone business and will impede longer-term efforts by chipmakers from Huawei’s HiSilicon to Semiconductor Manufacturing International Corp. to migrate toward more advanced wafer fabrication technologies, threatening China’s technological ambitions.

“China is the world’s largest user of chips, so supply chain security is of high priority,” said Gu Wenjun, chief analyst at research firm ICwise. “It’s not possible for any country to control the entire supply chain, but a country’s effort is definitely stronger than a single company.”

The involvement of one of Xi’s most-trusted lieutenants in China’s chip efforts highlights the importance accorded by Beijing to the initiative, which is gaining urgency as rivals from the U.S. to Japan and South Korea scramble to shore up their own industries. The Chinese president has long called upon his Harvard-educated adviser to tackle matters of top national priority, making him the chief representative in trade negotiations with the U.S. as well as chairman of the Financial Stability and Development Committee, where Liu leads the charge to curb risks in the nation’s $5-trillion-plus financial sector.

In May, Liu spearheaded a meeting of the technology task force that discussed ways to grow next-generation semiconductor technologies, according to a government statement. The 69-year-old vice premier, who has led the country’s technology reform task force since 2018, is also overseeing projects that could lead to breakthroughs in traditional chipmaking, including the development of China’s own chip design software and extreme ultraviolet lithography machines, one of the people said, asking not to be identified as they weren’t authorized to speak to media.

The State Council and the Ministry of Industry and Information Technology didn’t respond to faxed requests for comment.

During trade negotiations with the Trump administration, Liu emerged as one of the most visible advocates of Beijing’s agenda. He’s known Xi since childhood -- both are sons of veteran Communist Party leaders and were among masses of young people dispatched to work in impoverished rural areas during the Cultural Revolution. Now, Liu is leading the charge to reform the tech sector, which was identified in China’s latest five-year economic plan as a key strategic area in which the “whole nation system” should be used to mobilize any necessary resources.

First introduced under Mao Zedong to help the then-fledgling Communist China industrialize, the approach was crucial to helping Beijing attain a number of top national priorities, from developing its first atomic bomb in the early 1960s to achieving Olympic sporting success. After that it was largely set aside as officials shifted to focus on economic growth. But following a series of U.S. sanctions that exposed the vulnerabilities of China’s chip capabilities, Xi is once again reactivating the mechanism to achieve breakthroughs in advanced chip development and manufacturing.

About a trillion dollars of government funding have been set aside under the technology initiative,

The White House released a report on Tuesday that offers a solemn assessment of American companies prioritizing profits over national security and long-term sustainability. “A focus on maximizing short-term capital returns has led to the private sector’s underinvestment in long-term resilience,” the 250-page report states. The United States has a competitive advantage over China in the production of semiconductor manufacturing equipment (SME), which provides a chokepoint that can limit “advanced semiconductor capabilities in countries of concern.”

https://www.forbes.com/sites/roslynlayton/2021/06/10/white-house-re...

The report details the findings and recommendations of the Administration’s 100-day supply chain review required by President Biden’s executive order from February that directed the review of four key industries: semiconductors, large capacity batteries, critical minerals and pharmaceuticals. The report states that the Chinese government’s “massive subsidy campaign [as much as $200 billion over the past eight years] to develop its domestic semiconductor capability” has exploited “gray areas” in international trade rules and avoided World Trade Organization (WTO) oversight. The Chinese government has propped up key tech industries, including semiconductors manufacturing and SME production, through a “novel subsidy strategy” meant to avoid “transparency requirements of the WTO subsidy regime.” Essentially, government subsidies are booked as “investments” to avoid WTO disclosure rules.

This one of many “innovation mercantilist” tactics that Chinese state has practiced for years, according to a recent report and event by the Information Technology & Innovation Foundation which details China’s deleterious impact on competitive international ecosystems for semiconductors, telecommunications equipment, biopharmaceuticals, solar photovoltaics, and high-speed rail. Co-author Stephen Ezell estimates that the US loses out on some 5000 semiconductors patents annually because of this predation.


The Chinese Communist Party has made a concerted effort to dominate the semiconductor market. The Made in China 2025 plan aims to produce 70 percent of China’s chip demand indigenously and pledges as much as $1.4 trillion of investment into China’s semiconductor industries.

Memory chips are the “most mature” of these efforts. Yangtze Memory Technologies (YMTC), which has received $24 billion in state subsidies, has emerged as a “national champion memory chip producer.” A report by James Mulvenon this year identifies ties between YMTC and the People’s Liberation Army.

“It’s not just YMTC,” cautioned Emily de La Bruyère, senior fellow at the Foundation for the Defense of Democracies, during a China Tech Threat roundtable forum this week. “Changxin Memory Technologies [CXMT] is equally propped up and potentially equally connected to the [People’s Liberation Army].” The roundtable titled "Let the Chips Fall?" explored the theme of how the next Undersecretary for the Department of Commerce’s Bureau of Industry and Security (BIS) should address semiconductor policy.


The White House report appears to be a de facto roadmap for the next BIS chief and is notable for naming leading Chinese fabs with military connections which have yet to be designated as Military End Users or on the Entity List. In no uncertain words, the bipartisan United State China Commission issued a report earlier this month, Unfinished Business: Export Control and Foreign Investment Reforms which critiqued BIS for failing to issue the lists of foundational and emerging technologies as required by the 2018 Export Reform and Control Act. Such a publication would likely trigger action against the Chinese fabs.

“While the United States no longer leads the world in semiconductor manufacturing capabilities,” it has a competitive advantage over China in semiconductor manufacturing equipment (SME), the White House report adds.

#China wants to buy advanced #chip machine from #Netherlands. #US says NO. It's an ASML machine called an extreme ultraviolet (EUV) lithography system that is essential to making advanced #semiconductor #microprocessors. #silicon #technology https://www.wsj.com/articles/china-wants-a-chip-machine-from-the-du... via @WSJ


Beijing has been pressuring the Dutch government to allow its companies to buy ASML Holding ASML -2.35% NV’s marquee product: a machine called an extreme ultraviolet lithography system that is essential to making advanced microprocessors.

The one-of-a-kind, 180-ton machines are used by companies including Intel Corp. INTC -1.51% , South Korea’s Samsung Electronics Co. and leading Apple Inc. supplier Taiwan Semiconductor Manufacturing Co. TSM -1.52% to make the chips in everything from cutting-edge smartphones and 5G cellular equipment to computers used for artificial intelligence.

China wants the $150-million machines for domestic chip makers, so smartphone giant Huawei Technologies Co. and other Chinese tech companies can be less reliant on foreign suppliers. But ASML hasn’t sent a single one because the Netherlands—under pressure from the U.S.—is withholding an export license to China.

The Biden administration has asked the government to restrict sales because of national-security concerns, according to U.S. officials. The stance is a holdover from the Trump White House, which first identified the strategic value of the machine and reached out to Dutch officials.

Washington has taken direct aim at Chinese companies like Huawei and has also tried to convince foreign allies to restrict the use of Huawei gear, over spying concerns that Huawei says are unfounded. The pressure aimed at ASML and the Netherlands is different, representing a form of collateral damage in a broader U.S.-China tech Cold War.


ASML Chief Executive Peter Wennink has said that export restrictions could backfire.

“When it comes to targeted, specific, national security issues, export controls are a valid tool,” he said in a statement. “However, as part of a broader national strategy on semiconductor leadership, governments need to think through how these tools, if overused, could slow down innovation in the medium term by reducing R&D.” He said in the short to medium term, it is possible that widespread use of export controls “could reduce the amount of global chip manufacturing capacity, exacerbating supply chain issues.”

---

That currently isn’t on the table inside the Biden White House, people familiar with the matter say. The U.S. is trying to put together alliances of Western countries to work jointly on export controls, people familiar with the matter said. The move could also have ramifications beyond ASML, further roiling semiconductor supply lines already under strain around the world.

ASML spun out of Dutch conglomerate Royal Philips NV in the 1990s. It is based in bucolic Veldhoven, near the Belgian border. It specializes in photolithography, the process of using light to print on photosensitive surfaces.

Photolithography is key to chip makers, which use light to draw a checkerboard of lines on a silicon wafer. Then they etch away those lines, like a knife carving into wood, but with chemicals. The remaining silicon squares become transistors.

The more transistors on a piece of silicon, the more powerful the chip. One of the best ways to pack more transistors into silicon is to draw thinner lines. That is ASML’s specialty: Its machines print the world’s thinnest lines.

The machines, which require three Boeing 747s to ship, use a laser and mirrors to draw lines five nanometers wide. Within a few years, that is expected to shrink to less than a nanometer wide. By comparison, a strand of human hair is 75,000 nanometers wide.

#TSMC eyes expansion in #US & #Japan to meet high chip demand. Expansion plans come amid concern over the concentration of chipmaking capability in #Taiwan. #China does not rule out the use of force for Taiwan's most advanced #semiconductor #technology. https://www.reuters.com/technology/taiwans-tsmc-posts-11-jump-q2-pr...

Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (2330.TW) signalled on Thursday plans to build new factories in the United States and Japan, riding on a pandemic-led surge in demand for chips that power smartphones, laptops and cars.

TSMC, which posted record quarterly sales and forecast higher revenue for the current quarter, said it will expand production capacity in China and does not rule out the possibility of a "second phase" expansion at its $12 billion factory in the U.S. state of Arizona.

The world's largest contract chipmaker and a major Apple Inc (AAPL.O) supplier also said it is currently reviewing a plan to set up a speciality technology wafer fabrication plant, or fab, in Japan.

TSMC's overseas expansion plans come amid concern over the concentration of chipmaking capability in Taiwan, which produces the majority of the world's most advanced chips and is geographically close to political rival China, which does not rule out the use of force to bring the democratic island under its control.

Taiwan and TSMC have also become central in efforts to resolve a pandemic-induced global chip shortage that has forced automakers to cut production and hurt manufacturers of smartphones, laptops and even appliances. read more

"We are expanding our global manufacturing footprint to sustain and enhance our competitive advantages and to better serve our customers in the new geopolitical environment," TSMC chairman Mark Liu told an analyst call.

"While our overseas fabs are not initially able to match the costs of our manufacturing operations in Taiwan, we will work with governments to minimise the cost gap," Liu said.

He did not give details of its plans in America and Japan, adding the company was working to "firm up" wafer prices to reflect cost increases.

Reuters reported in May TSMC was eyeing expansion in Arizona beyond the one currently planned. read more

Liu said TSMC was also planning a capacity expansion in China's Nanjing due to the "urgent need" of clients, using the mature 28 nanometre semiconductor manufacturing technology.

It is scheduled to enter production next year and will eventually reach a production of 40,000 wafers per month by mid-2023, he said.

Revenue for April-June at TSMC , Asia's most valuable manufacturing company, climbed 28% to a record $13.29 billion.

For the quarter ending in September, TSMC forecast revenue of $14.6 billion to $14.9 billion, compared with $12.1 billion in the same period a year earlier.

TSMC said the auto chip shortage will gradually reduce for its customers from this quarter but expects overall semiconductor capacity tightness to extend possibly into next year.

The Taiwanese firm, which also makes chips for Qualcomm Inc (QCOM.O), had previously flagged a $100 billion expansion plan over the next three years, as fifth-generation telecommunications (5G) technology and artificial intelligence applications drive global demand for advanced chips. read more

Deepglint, a chinese facial-recognition firm, was one of 14 companies slapped with American sanctions on July 9th for alleged links to human-rights abuses in China’s far-western region of Xinjiang. It is also a globally recognised leader in its field and has raised money from Sequoia Capital and other big American investment firms. DeepGlint’s founders, who graduated from Stanford and Brown universities in America, must now discuss with their foreign backers the prospect of decoupling from the Western commercial sphere. Many Chinese companies have been forced to hold similar talks.


https://www.economist.com/business/2021/07/17/china-incs-new-incons...


China Inc appears to be on the back foot. In America President Joe Biden has picked up where Donald Trump left off, placing restrictions on Chinese companies. Last year Congress passed a bill that may eventually force Chinese firms to delist from American stock exchanges, which would affect nearly $2trn in market value. Huawei, banned from America, has struggled to sell its 5g telecoms kit elsewhere in the West. ByteDance was nearly forced to divest from its prized short-video app, TikTok, over American fears that the Chinese regime could access global users’ personal data. Tencent, another internet giant, is said to be haggling with American regulators worried about its 40% stake in Epic Games, the developer of Fortnite.

Indian fantasizes having a major semiconductor manufacturer on its shores. It wants to lure a #Taiwanese name to burnish its #semiconductor #tech credentials but #Taiwan doesn't see much point in the exercise given #India's lack of expertise in the field https://www.bloomberg.com/opinion/articles/2021-10-03/india-s-chip-...


For more than two decades, India has maintained the fantasy that a major semiconductor manufacturer will set up shop on its shores, kicking off the nation’s journey along an inevitable path toward chip glory. It never happened, but there’s now a very clear script for how it might be done, if only government and industry leaders would take a more pragmatic approach.

In the latest incarnation of the dream, officials in India and Taiwan are apparently in talks to lure a new factory worth up to $7.5 billion. The local government is likely to foot half the bill to build and kit out such a project, Bloomberg News reported. While Taipei is eager to build closer ties with New Delhi, facilitating the construction of a chip fab in South Asia is not high on its priority list. That’s not due to Taiwan being particularly protectionist, but because it can’t see much point in the exercise given India's lack of expertise in the field.

How the West Can Win a Global Power Struggle
In an economic Cold War pitting China and Russia against the U.S. and its allies, one side holds most of the advantages. It just has to use them.

https://www.wsj.com/articles/how-the-west-can-win-a-global-power-st...

In the years preceding its invasion of Ukraine, Russia set out to sanction-proof its economy by developing local substitutes for key foreign products, such as microprocessors. The only problem: Since it lacks advanced semiconductor fabrication capacity, production of these Russian-designed chips was outsourced, mainly to Taiwan Semiconductor Manufacturing Co. After the invasion of Ukraine, Taiwan joined the U.S. in banning the export of sensitive technology to Russia. TSMC immediately promised to comply.

Russia may be an energy superpower but Taiwan is a semiconductor superpower, and semiconductors are harder to replace than oil. Therein lies a critical insight about the emerging Cold War between Russia and China on one side and the West—the U.S. and its democratic allies—on the other. This Cold War will be much more of an economic contest than the first, and the balance of economic power favors the U.S. and its allies. And it’s not even close.

Chinese President Xi Jinping likes to boast, “The East is rising, the West is declining.” When the rivalry was limited to China and the U.S., this had some resonance: At current rates of growth, China will surpass the U.S. as the world’s largest economy as soon as 2030 despite U.S. gains in the last year.

But with China partnered with Russia and the West more united than ever, this is turning into a contest of alliances, and Xi couldn’t be more wrong. In this framing, “East” and “West” are not geographic, but geopolitical, labels. If “the East” is defined as those countries with which China is closely aligned (it eschews formal alliances), only China is any sense rising. Russia was a stagnating petrostate even before sanctions eviscerated its economy. The others, such as Kazakhstan, Belarus, Pakistan, North Korea, Cambodia and Laos, are poor, slow-growing, or both. The West, defined as the European Union, the anglosphere (the U.S., Australia, Canada, Britain and New Zealand) and East Asia’s three big, rich democracies, Japan, South Korea and Taiwan, may not be growing rapidly, but it is growing and has a gigantic head start. As former U.S. Treasury Secretary Henry Paulson said a Chinese official once told him: “You have all the good allies.”

By itself, China accounted for 18% of global gross domestic product at current exchange rates last year, based on International Monetary Fund data. Adding Russia and their assorted allies brings the total to just 20%. The U.S., meanwhile, accounted for 24%, and adding its allies vaults the total to 59%.

While sanctions on Russia demonstrate the West’s control of the global financial system, long-run economic advantage will come from technology and knowledge. In pure science—such as space travel and atomic energy—Russia and China certainly hold their own. But in commercially useful technology, Western companies lead in almost every field, from commercial aviation and biotechnology to semiconductors and software.

“If you have a coherent strategy across the major democracies, you’re in an enormously robust position in terms of financial, economic and technological leverage,” said former Australian Prime Minister Kevin Rudd, now president of the Asia Society think tank.

How the West Can Win a Global Power Struggle
In an economic Cold War pitting China and Russia against the U.S. and its allies, one side holds most of the advantages. It just has to use them.

https://www.wsj.com/articles/how-the-west-can-win-a-global-power-st...

Of course the East plays a central role in the global economy. As recent market turmoil illustrates, Russia is a key supplier of not just oil and gas but metals such as palladium, used in catalytic converters, and nickel. China dominates manufacturing of countless goods whose value became abundantly clear during the pandemic, when demand for some, such as protective personal equipment, skyrocketed.

To a great extent these strengths reflect Russia’s comparative advantage in geology and China’s in factory labor. The West’s comparative advantage is in knowledge. That’s why Russia and China court Western investment. For example, to develop a complex liquefied natural gas (LNG) project in the Arctic, Russia relied on Norwegian, French and Italian contractors for essential expertise, research firm Rystad Energy notes.

Catching up with the West is no easy task, as semiconductors illustrate. Western companies dominate all the key steps in this critical and highly complex industry, from chip design (led by U.S.-based Nvidia, Intel, Qualcomm and AMD and Britain’s ARM) to the fabrication of advanced chips (led by Intel, Taiwan’s TSMC and South Korea’s Samsung ) and the sophisticated machines that etch chip designs onto wafers (produced by Applied Materials and Lam Research in the U.S., the Netherlands’ ASML Holding and Japan’s Tokyo Electron ).

Russia and China have made efforts to reduce this dependence. Russia developed locally designed microprocessors called Elbrus and Baikal to run data centers, cybersecurity operations and other applications. Though neither has achieved significant market share, they “represent the pinnacle of local design capability,” said Kostas Tigkos, principal at Jane’s, a defense intelligence provider. Russia hoped that they would eventually displace chips made by Intel and AMD, he said. “This would not only have been the foundation for diversifying their installed base, but a stepping stone for exports of those processors to other friendly nations.” But without manufacturers like TSMC to make the chips, Russia is facing “the complete disintegration of their aspirations to develop their own industry.”

China has a much bigger semiconductor industry than Russia, and its partly state-owned national champion, Semiconductor Manufacturing International Co. (SMIC), could in theory make Russia’s chips, but that would take at least a year, Mr. Tigkos said. Moreover, its efforts to catch up to its Taiwanese competitor have been set back by sanctions. In 2020 the U.S. required companies using American technology to obtain a license to sell to SMIC. This effectively limited its ability to acquire advanced equipment from Netherlands’ ASML, which is critical for “any country that wants to have a competitive semiconductor industry,” Mr. Tigkos said.

Why does all this matter to the outcome of the geopolitical contest? Over time economic weight, strength and vitality are what allow countries to sustain military capability, achieve and maintain technological superiority, and remain attractive partners for other countries.

How the West Can Win a Global Power Struggle
In an economic Cold War pitting China and Russia against the U.S. and its allies, one side holds most of the advantages. It just has to use them.

https://www.wsj.com/articles/how-the-west-can-win-a-global-power-st...

Yet GDP does not automatically equate to strategic influence. To win a Cold War, it’s not enough for the West to hold the best economic cards, it has to know how to play them. Economic statecraft, as this is called, does not come naturally to the West: Its institutions are built on the assumption that companies are private enterprises, not instruments of the state. They do business wherever it’s profitable, regardless of their home countries’ strategic interests.

No such division exists in Russia and China. Russian President Vladimir Putin used state control of key industries such as natural gas to reward or threaten neighbors. The Chinese Communist Party insists that state-owned and even private enterprises give priority to the state’s interests. In return, China tilts the playing field in those companies’ favor at home and abroad. Chinese state-sponsored hackers steal commercial secrets from Western companies, the U.S. has alleged. China is a master of economic coercion, punishing countries such as Australia or Lithuania or companies that cross its diplomatic red lines by depriving them of access to the Chinese market, knowing other countries and companies will eagerly take their place.

China has also learned how to play companies and countries in the West off against one another—favoring whoever promises to share more of its technology with Chinese partners, or avoids criticism of China.

Western governments, such as Germany, exaggerate China’s economic power and underappreciate their own, said Luke Patey, an expert on China’s international economic strategy at the Danish Institute for International Studies. “Germany has a full house when it comes to geoeconomics but plays like it has a pair of threes,” Mr. Patey said. The West frets that Chinese companies lead in fifth-generation telecommunications equipment—such as Huawei Technologies—and electric vehicle batteries. But, he said, “We sell short the fact that up there with Huawei are Ericsson, Nokia and Samsung,” based in Sweden, Finland and South Korea, respectively. Meanwhile Japan’s Panasonic and South Korea’s LG “are making the most sophisticated electric vehicle batteries in the world.”

For the West to play this game, it will have to more skillfully employ its ample economic assets toward geopolitical ends. The sanctions on Russia show that it can: The West showed a remarkable breadth and unity in its willingness to sustain significant economic discomfort in order to punish Russia. When the Trump administration imposed export controls on China, Taiwan did not join in but its companies were forced to comply because they use U.S. technology. This time Taiwan itself locked arms with the U.S. “Taiwan strongly condemns Russia’s invasion of Ukraine. Our country joins the U.S., EU & other like-minded partners in sanctioning Russia,” its Ministry of Foreign Affairs tweeted.

How the West Can Win a Global Power Struggle
In an economic Cold War pitting China and Russia against the U.S. and its allies, one side holds most of the advantages. It just has to use them.

https://www.wsj.com/articles/how-the-west-can-win-a-global-power-st...


Still, in one sense this is an easy test. Will the West’s unity persist if Ukraine slips from the headlines and economic pain mounts? More important, could it muster the same effort with China, a critical market and supplier to many companies and countries in the West?

If China attacks Taiwan, which it considers a renegade province, ostracizing it from the global economy would be next to impossible. Nonetheless, Western governments have begun circumscribing business ties with China in response to its more aggressive behavior toward its neighbors and “Made in China 2025,” an economic blueprint for dominance in key technologies. Germany and Italy are applying more stringent criteria to foreign investment in their companies, wary of advanced technology being transferred to Chinese competitors. Japan is now debating an economic security law to safeguard supply chains and screen foreign investment and equipment used in sensitive infrastructure. Companies that had prioritized expansion on China are now boosting their Western presence. TSMC is building fabrication plants in Arizona and Japan while Intel has announced new or expanded facilities in Ohio, France, Germany and Italy.

Western cooperation in such efforts, though nascent, is growing. When the U.S. and European Union settled a long-running dispute over each others’ subsidies to Boeing and Airbus last year, they also agreed to develop a common approach toward “non-market economies,” i.e. Russia and China, on civil aircraft. For example, they agreed those countries cannot make investment in their aviation sectors contingent on “the transfer of technology or jobs to the detriment” of the U.S. and Europe.

Sustaining an economic edge also requires continuous reinvestment. At present, the West holds a comfortable lead. Based on purchasing power rather than current exchange rates, China and Russia spent $570 billion on research and development in 2019, the latest figures available; the U.S. and its largest democratic allies spent more than twice as much, $1.5 trillion, according to the Organization for Economic Cooperation and Development.

When it comes to human capital, the lead narrows slightly: Russia and China have 2.5 million researchers, the U.S. and its allies about 5.2 million. It’s in the future talent pool that the gap really starts to close. China alone awards more science and engineering undergraduate degrees than the U.S., Britain, France, Germany, Japan and South Korea combined. Students in China are more likely to pursue science and engineering than in other countries. This pool of talent is a formidable engine for domestic innovation and a magnet for foreign and domestic investment. The lack of a similar pool constrains American efforts to bring critical manufacturing back to the U.S. In a speech in Taiwan last year Morris Chang, the founder of TSMC, complained that American engineers “don’t want to work in the manufacturing industry…Taiwan’s superiority in this is that it has a large number of excellent and dedicated engineers willing to throw themselves into manufacturing.”

How the West Can Win a Global Power Struggle
In an economic Cold War pitting China and Russia against the U.S. and its allies, one side holds most of the advantages. It just has to use them.

https://www.wsj.com/articles/how-the-west-can-win-a-global-power-st...

The West makes up for the shortage of homegrown talent through immigration. A study by the Peking University Institute of International and Strategic Studies earlier this year lamented that 34% of China’s top artificial intelligence talents worked in China while 56% worked in the U.S., whose “relatively relaxed and innovative scientific research environment is…favored by scientific and technological talents.” Tech entrepreneurs are motivated by freedom and wealth, both of which are slipping out of reach in China and Russia.

Thus a key factor in whether the West can sustain its edge is whether it can remain a magnet for talent. Yet the West’s openness to trade and immigration and even its commitment to democracy have come under stress. In the last decade support in Europe and the U.S. has surged for right-wing populists opposed to immigration and free trade, skeptical of NATO, and admiring of Mr. Putin. These include Marine Le Pen, a contender for president in France’s elections this spring, and former U.S. President Donald Trump, who may seek the White House again in 2024. Democracy has backslid in Hungary, Poland and the U.S., according to the think tank Freedom House.

This points to the final and perhaps biggest challenge for Western nations. Having shown how effectively they can sever ties with Russia, can they be equally effective in strengthening ties with each other and unaligned players like India, Brazil and Vietnam—and thus be an attractive alternative to the autocratic East?

After World War II the U.S. used trade to strengthen other democracies and bind allies, and its reward was a democratic and prosperous West. Yet since the 2000s Americans have soured on this model, as expanded trade with the likes of China brought economic turmoil and little geopolitical benefit. Mr. Trump saw trade as a zero-sum game and hit allies and adversaries alike with tariffs. He pulled the U.S. out of the Trans-Pacific Partnership with 11 other Pacific rim countries, a pact covering not just tariffs but investment, intellectual property, data and the behavior of state-owned enterprises, intended as an alternative to China. Mr. Biden has resolved tariff disputes but pushed to expand “Buy American” regulations that penalize imports. He has offered no trade-agreement analog to his expanded military ties with allies in Europe and Asia, although he has promised a less ambitious “Indo-Pacific Economic Framework.”

How the West Can Win a Global Power Struggle
In an economic Cold War pitting China and Russia against the U.S. and its allies, one side holds most of the advantages. It just has to use them.

https://www.wsj.com/articles/how-the-west-can-win-a-global-power-st...

Meanwhile, China is fast cultivating its own economic sphere of influence, via foreign investment, its “Belt and Road” infrastructure initiative, and trade agreements, even applying to join the TPP, renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

“China has studied very carefully the American postwar model of how their global and regional military domination was augmented by financial and economic domination,” said Mr. Rudd. China, he said, seeks to achieve its foreign policy aims by making countries throughout Asia, including American allies, dependent on its trade and investment, and eventually its currency. Mr. Rudd urged the U.S. to return to the TPP and revive a similar pact with Europe. The U.S. needs to recognize where its strategic advantage lies, “which is through free trade, open commerce and open capital flows.”

TSMC has suspended all sales to Russia and to third parties known to supply products to Russia while it sorts through the sanctions rules to ensure it fully complies, according to a person familiar with the company’s business, who spoke on the condition of anonymity to discuss sensitive matters.

https://www.washingtonpost.com/technology/2022/02/25/ukraine-russia...

In a statement, TSMC said it is “fully committed to complying with the new export control rules announced.”


GlobalFoundries, the chip manufacturer based in Malta, N.Y., said it also has begun complying with the rules. The company has a system to review and block any prohibited sales to Russia, said Karmi Leiman, the company’s head of global government affairs and trade, though he added that the size of the company’s sales to Russian buyers is “not material.”

Leiman said the internal review system is similar to the one the company uses for Huawei, the Chinese tech giant that has been a target of U.S. sanctions for several years.


Intel, based in Santa Clara, Calif., said it “complies with all applicable export regulations and sanctions,” including the new Russia-focused export controls.

Russia is vulnerable to the export ban because it doesn’t produce consumer electronics or chips in large quantities, analysts say. In particular, it doesn’t make the highest-end semiconductors needed for advanced computing, an area dominated by Taiwan, South Korea, the United States, Europe and Japan.


TSMC’s participation in the sanctions is particularly damaging because the company is the world’s largest manufacturer of chips, including the most advanced.

Among the chips TSMC is no longer manufacturing and shipping are Elbrus-branded semiconductors that are designed in Russia, according to the person familiar with TSMC’s business.

Russia’s military and security services use Elbrus chips in some computing applications, according to Kostas Tigkos, an electronics expert at Janes, a U.K.-based provider of defense intelligence, who described the loss of TSMC’s help with the chips as “devastating” for Russia.

The Russian government has also been encouraging large domestic companies and banks to use Elbrus chips in their computers because the components are designed in Russia.

Russian drones shot down over Ukraine were full of Western parts

The Semiconductor Industry Association, a trade group representing big chipmakers, said its members are “fully committed to complying” with the new rules “in response to the deeply disturbing events unfolding in Ukraine.”


“While the impact of the new rules to Russia could be significant, Russia is not a significant direct consumer of semiconductors, accounting for less than 0.1% of global chip purchases, according to the World Semiconductor Trade Statistics (WSTS) organization,” the group’s president, John Neuffer, said in a statement.

The United States and other Western nations have long regulated sales to Russia of chips and other electronic components specifically designed for military use. Any such sales already required a government license to proceed, industry experts said.

The new rules largely block the sale of dual-use chips, which have both military and commercial applications, to nonmilitary users in Russia, including those in high-tech industries.

In a novel move that the United States has used only once before — against China’s Huawei — it is also requiring companies worldwide to abide by the rules and block such sales to Russia if they use U.S. manufacturing equipment or software to produce chips. Most chip factories around the world use software or equipment designed in the United States, analysts say.

U.S. tech dominance could offer leverage over Russia — or backfire
Silicon Valley’s increasingly aggressive stance against Russia could fuel the growth of rivals there and in China, Iran, too


https://www.washingtonpost.com/technology/2022/03/03/us-russia-tech...


Withholding technology can be a soft-power weapon to potentially turn a population against its leaders. Yet it also can be costly to the U.S. economy, slow to deliver results and scattershot in its effects — much more likely to affect ordinary Russians using their iPhones than generals firing missiles into Ukrainian cities.

There is another cost, as well. The United States’ dominance of global technology, experts warn, was built over generations but could be eroded in just a few years as rival powers — and especially Russia and China — invest billions of dollars to develop alternative technologies at home, in part to decrease U.S. leverage at moments such as these.


Even as Russians furiously buy iPads, Android devices and Windows-based computers, President Vladimir Putin is pushing hard to wean the country from Western technologies. And if Russia and other U.S. rivals succeed, there also could be long-term damage to the ability of American intelligence agencies — particularly skilled in exploiting U.S.-made tech — to track developments in the next conflict, experts say.

The upshot is that although technology sanctions can be unquestionably powerful, it’s a power that, when deployed, can spark backlashes that undermine its long-term utility. Depriving rivals of American-made technology also threatens the future global prospects of an industry that has driven U.S. economic growth for most of this century. The rise of a Russian Google — or a Chinese Facebook or an Iranian YouTube — are not theoretical developments. They are happening already.

“When you cut them off from American tech, they will find alternatives,” said Peter Micek, general counsel for Access Now, a human rights group that lobbies to keep Internet services available to people worldwide.

U.S. officials and technology executives are attempting to navigate this chessboard of risk and reward as they assemble a potent set of punitive moves against Russia.


The result has been growing restrictions on hardware, with Apple joining others in blocking sales to Russia, and moves by major social media platforms to curb the spread of Russian propaganda through its state-funded RT information service — often in response to the demands of Western governments. Digital purchasing tools, such as Apple Pay, also have stopped working as Western sanctions cut off Russian banks for ordinary operations.

But calls by Ukrainian officials to deprive Russians in general of access to social media and even the Internet itself have sparked significant resistance from both the companies and digital rights groups, which argue that the likes of Twitter, WhatsApp and Telegram are key to delivering information in Russia. They often are the only sources of news on the horrors Putin is inflicting on Ukrainians at a time when his control over national news media is nearly total.

The Russian government, meanwhile, has been squeezing these same companies, throttling Facebook and Twitter, and threatening action against Google in retaliation for its YouTube subsidiary limiting access to RT in response to demands by Western governments.

But as this conflict plays out, the idea of depriving Russia of software updates or online support from U.S. companies has not gained traction, even though such moves could gradually erode the functioning of technological tools used every day by the Russian government and its citizens.

US says China’s support for Russia over Ukraine puts it on ‘wrong side of history’
‘China claims to be neutral, but its behavior makes clear that it is still investing in close ties to Russia,’ state department says

https://www.theguardian.com/us-news/2022/jun/15/us-china-russia-ukr...

Xi Jinping has assured Vladimir Putin of China’s support on Russian “sovereignty and security” prompting Washington to warn Beijing it risked ending up “on the wrong side of history”.

China has refused to condemn Moscow’s invasion of Ukraine and has been accused of providing diplomatic cover for Russia by blasting western sanctions and arms sales to Kyiv.

China is “willing to continue to offer mutual support [to Russia] on issues concerning core interests and major concerns such as sovereignty and security,” state broadcaster CCTV reported Xi as saying during a call with Putin.


It was the second reported call between the two leaders since Putin launched his invasion of Ukraine on 24 February.

According to CCTV, Xi praised the “good momentum of development” in bilateral relations since the start of the year “in the face of global turmoil and changes”.

Beijing was willing to “intensify strategic coordination between the two countries”, Xi reportedly said.

The Kremlin said the two leaders had agreed to ramp up economic cooperation in the face of “unlawful” western sanctions.

“It was agreed to expand cooperation in the energy, financial, industrial, transport and other areas, taking into account the situation in the global economy that has become more complicated due to the unlawful sanctions policy of the west,” the Kremlin said following the phone call.

But the United States swiftly weighed in with a frosty retort to Beijing’s expressed alignment with Moscow.

“China claims to be neutral, but its behavior makes clear that it is still investing in close ties to Russia,” a US state department spokesperson said.

Washington was “monitoring China’s activity closely”, including how, nearly four months into Russia’s war in Ukraine, the Asian giant was “still echoing Russian propaganda around the world” and suggesting Moscow’s atrocities in Ukraine were “staged,” the official said.

“Nations that side with Vladimir Putin will inevitably find themselves on the wrong side of history.”

The west has adopted unprecedented sanctions against Russia in retaliation for its invasion of Ukraine, and Moscow considers that Europe and the United States have thus caused a global economic slowdown.

Moscow is also looking for new markets and suppliers to replace the major foreign firms that left Russia following the invasion.

The European Union and the US have warned that any backing from Beijing for Russia’s war, or help for Moscow to dodge western sanctions, would damage ties.

Once bitter cold war enemies, Beijing and Moscow have stepped up cooperation in recent years as a counterbalance to what they see as US global dominance.

The pair have drawn closer in the political, trade and military spheres as part of what they call a “no limits” relationship.

Last week they unveiled the first road bridge linking the two countries, connecting the far eastern Russian city of Blagoveshchensk with the northern Chinese city of Heihe.

The leaders’ call on Wednesday fell on Xi’s 69th birthday and was their first reported communication since the day after Russia launched its Ukraine invasion.

Beijing is Moscow’s largest trading partner, with trade volumes last year hitting $147bn, according to Chinese customs data.