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Sunday, December 8, 2024

CHINA POST #541 CHINA AND THE FOREIGN MEDIA

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Graham Perry
Graham Perry
Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer.

GOOD MORNING FROM LONDON

TRUMP – TAIWAN – AND CHINA

SOUTH CHINA MORNING POST

“Analysts in the US are looking for signs of how the Donald Trump will shape policy on Taiwan a potential flashpoint between the world’s two major powers, with opinions consistently divided over what direction the president-elect will take.

Some fear Trump could use the self-ruled island as a bargaining chip to seek economic concessions from Chinese leader Xi Jinping while others say a compromise with Beijing on Taiwan issues could generate strong political resistance Trump would never want.

Beijing sees Taiwan as part of China, to be reunited by force if necessary.

Most countries, including the US, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with weapons.

On the campaign trail Trump said that Taiwan should pay the US for defence. He also accused Taiwan of stealing from America’s semiconductor industry and called for additional tariffs on chip imports from the island.

Those comments have alarmed Taiwanese policymakers, who were unnerved in July after the US Republican National Committee failed to mention Taiwan in its policy platform for the first time in nearly 40 years.

Perhaps tellingly, ahead of voting in the US Presidential Election earlier this month, Taiwan’s defence chief, Wellington Koo, said the island had to make clear that “Taiwan has the determination to defend itself”.

GRAHAM PERRY COMMENTS;-

Trump’s MAGA (Make America Great Again) policy will bring a significant change to the whole Taiwan issue – for China, the US, the EU, Japan and other countries in South-East Asia.

Unlike Biden, Trump has two big differences with Taiwan. First, Trump complains that Taiwan does not pay enough of its military budget to the US for US protection of Taiwan. Second, Taiwan produces over 90% of world production of semiconductors and is determined not to relinquish its dominance – even to the US.

The key issue is the continuous flow of semiconductors from Taiwan to the US. Taiwan likes its dominance. Trump rails against it. MAGA means that the US must take back economic power which it has lost and, under successive administrations, the US has been slow to break its dependence on Taiwan.

This is important because semiconductors feature in the make-up of almost every product at the heart of the US economy. Every motor car needs semiconductors – every battery too and a dislocation of the supply from Taiwan to the US brings the US economy stuttering to a halt within days. It is that important.

In a recent Economist news video on this topic, a senior US State Department official admitted to having “nightmares” about the possibility of interruption in the supply to the US of Taiwanese semiconductors.

MAGA means the US has to be in control. The US cannot be at the mercy of any nation and – where it is – Trump will bear down strongly. Taiwan is equally clear that it will do all it can to maintain its world supremacy in the production of semiconductors. The issue – hitherto underestimated by Western commentators on US-China relations – has the capacity to become the big issue in US-Taiwan relations.

China is watching. It knows that that even the hint of a China naval blockade of shipments to and from Taiwan would send tremors throughout the whole of US industry. China can precipitate a crisis with the movement of just a few of its Navy vessels but China will; watch and wait. It knows it has the upper hand because successive US administrations – including Trump’s first administration – have allowed US dependence on Taiwan semiconductor production to increase.

And then there is the Elon Musk factor. He is heard in China. He is a big investor in China. He meets with people in high places. It does not mean he influences China but it is the case that that Chinese always ensure they hear all points of view before making significant policy moves.

And in a sign of things to come the media in Taiwan quickly noted that at the US Republican National Convention in July 2024  there was no mention of Taiwan in the Policy Platform for the first time in nearly 40 years.

Question – what is more important to the US – its constant need for semiconductors or its defence of Taiwan? Answer – it’s the semiconductors of course!

GRAHAM PERRY

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