The presidential elections in Taiwan will keep us very busy into the coming week. We will not know which candidate will win the race until Sunday at the earliest.
What we already know before the election: Taiwan holds an excellent trump card with its leading global chip industry. That is why Felix Lee gives us an insight into the sector’s role as a shield against Chinese aggression. However, whether the quality of the chips produced in Taiwan is enough to prevent a Chinese attack is probably wishful thinking.
A potential Chinese attack on its democratic neighbor would not only be a turning point in international relations. In fact, such an attack would represent the most severe form of interference in the internal affairs of another state. Yet Beijing attempts to internationally outlaw any form of interference by third parties in the internal affairs of other actors.
Beijing currently uses the arrest of an alleged spy from the British Secret Intelligence Service MI6 to portray itself as a victim of outside interference. However, the news also serves other purposes, as Fabian Kretschmer writes. The government deliberately uses the fear of leaks to fuel nationalism.
The strategy certainly bears fruit. But, the resulting mistrust could one day have a negative impact on the economy. International trade and a favorable climate for investment are primarily based on trust. Once this has been used up, the damage would be far greater than that actually caused by foreign agents.
China’s accusations against the British Secret Intelligence Service appear straight from a James Bond movie: Beijing claims that MI6 hired a man to obtain state secrets from the People’s Republic during his business trips as an executive of a consulting firm. State security finally publicized the case on Monday, and the suspected spy has since been arrested.
In reality, the news raises more questions than answers. For one thing, the claims cannot be independently verified, and the British embassy in Beijing has not yet commented on the allegations.
Moreover, even the official accounts of the Chinese authorities are incomplete: Neither the gender nor the nationality of the presumed spy have been disclosed – let alone which state secrets he allegedly stole. Nevertheless, the case sheds light on China’s growing paranoia about national security, which increasingly involves its population of 1.4 billion citizens.
Since the most recent tightening of legislation last summer, the definition of espionage in the Middle Kingdom is so broad that practically any conventional market research or even tourist smartphone snapshots can be considered as such.
This is because all actions and data that concern China’s “national interests” are now punishable – an extremely loose term. For example, anyone who takes a photo of a civilian airport that is also used by the military is, by definition, in possession of a state secret. This also includes climate data.
Unsurprisingly, authorities have repeatedly targeted foreign nationals in recent months. In March 2023, for example, a Japanese businessman was arrested for espionage. The authorities have also raided several US consulting firms and seized their laptops.
The European Chamber of Commerce recently strongly criticized the stricter legislation. They say companies can’t know exactly where the legal red lines are, as the rules are completely vague. Expert Isabelle Feng from the Perelman Center for the Philosophy of Law at the Université Libre de Bruxelles speaks of a ‘Sword of Damocles‘ hanging over companies.
Private individuals are also threatened with the arbitrary application of the law. The South Korean embassy in Beijing recently urged its citizens not to take photos of protests or participate in Christian missionary activities.
However, this vagueness of the legal provisions is not an oversight, but deliberate: On the one hand, it gives the authorities a broad and arbitrary scope for applying the anti-espionage laws. On the other hand, it creates a feeling of insecurity that ultimately leads to anticipatory obedience.
There are also undesirable consequences for China, such as the deterrent effect on foreign investors. The government seems to be willing to accept this, however. Through public campaigns, it deliberately puts its own population on heightened alert. Anyone walking through the corridors of Chinese state-owned enterprises, for example, will find countless information sheets and omnipresent propaganda slogans on the walls explaining the most efficient way to identify and report spies.
Even school children receive anti-espionage training, as the state media proudly report every week. In one particularly bizarre case, teachers in a kindergarten in the east coast city of Tianjin were even taught how to “understand and apply” the anti-espionage law. Furthermore, citizens receive up to 65,000 euros if they successfully report spies to the authorities.
The reasons for the heightened paranoia are rooted in a genuine threat situation: China and the US are engaged in an ideological and technological hegemonic dispute fought at all levels. And as recently as last summer, CIA Director William Burns said that the United States would rebuild its spy network in China.
At the same time, however, Beijing’s anti-espionage campaign is probably also based on the political strategy of creating social cohesion in difficult economic times using a dangerous mixture of collective fear and overflowing nationalism.
The narrative also offers a convenient scapegoat: China’s state leadership always blames “foreign infiltration” for every form of political opposition – from the now-defeated democracy movement in Hong Kong to last winter’s “zero Covid” protests.
These seemingly hollow phrases have recently led to tangible consequences in everyday life: Many Chinese academics and journalists now avoid informal meetings with foreigners. And time and again, clubs and organizers of cultural events report that they are not allowed to allow international artists to perform. Fabian Kretschmer
In his New Year’s address, Xi Jinping once again made it clear that he considers the “reunification” of Taiwan and China to be “a historical inevitability.” Should Lai Ching-te from the ruling DPP win the election next Sunday, the risk of a blockade of Taiwan by China will rise again. This is because the Beijing leadership has labeled Lai a “separatist.” Such rhetoric is the beginning of the justification for an attack on the neighboring country.
If it weren’t for Taiwan’s semiconductor industry, some experts would argue. After all, the island is by far the world’s largest supplier of semiconductors and computer chips. 65 percent of all semiconductors and more than 90 percent of high-performance chips are manufactured in Taiwan. An attack on Taiwan would bring semiconductor production to a grinding halt – with disastrous consequences for the global economy. And therefore also for China.
However, most observers, including those on the ground in Taiwan, believe that the protective effect of the chip industry’s pledge is limited. Xi could pursue his superpower ambitions regardless of any consequential damage, and China’s own chip manufacturers are catching up with their own cutting-edge technology. At the same time, TSMC’s investments, for example, in Germany, only provide the West with limited security: If Taiwan falls, the supply of cutting-edge chips will also fail.
Today, no product can be manufactured without semiconductors. Be it smartphones, kitchen appliances, cars, weapons, industrial equipment or energy supplies – they are all controlled by microchips. And the best semiconductor manufacturers are TSMC, UMC, PSMC or Macronix. They all come from Taiwan.
TSMC is particularly strong when it comes to the fastest processors for applications such as AI, graphics cards and self-driving cars. The company uses the most advanced technology in the 3-nanometer range and will break the 2-nanometer barrier in 2025. The term refers to the process size, i.e., the diameter of the computing nodes and conductor paths. The smaller they are, the faster, more intelligent and more energy-efficient the chip is.
Various parties argue that such an indispensable key industry could protect the island from attack. In October 2021, Taiwan’s outgoing president, Tsai Ing-wen, spoke of a “silicon shield that allows Taiwan to protect itself and others from aggressive attempts by authoritarian regimes to disrupt global supply chains.”
Chip expert and Harvard historian Chris Miller writes in his book “The Chip War” that we might have trouble even getting a dishwasher if Taiwan falls. After a disaster in Taiwan, the total costs would run into the trillions. It would take at least half a decade to rebuild the lost chip manufacturing capacity.
But the rest of the world would not only be left without household appliances for a while. China itself would be massively affected. After all, China’s economy is also dependent on Taiwanese semiconductors. Semiconductors and digital displays account for over 60 percent of Taiwan’s exports to China. Trade between Taiwan and China is effectively “a semiconductor trade,” says Taiwanese economist Lee Roy Chun at the Chung Hua Institute for Economic Research (CIER) in Taipei.
He also considers this dependency to be a decisive factor. The trade expert is convinced that China’s economic advantages would be undermined if Taiwan lost its ability to continue to serve as a global market leader in the semiconductor industry.
His colleague Kristy Hsu, an economist at the same institute, disagrees. “There are other reasons why China would invade Taiwan, such as Taiwan declaring its independence,” she said in an interview with China.Table. “Semiconductors are never the primary focus of this decision.”
Chip expert Miller also believes that relying on a silicon shield is an “extremely optimistic view of things.” However, he believes that the concentration of semiconductor production in Taiwan is definitely a threat to the global economy for which the West is not sufficiently prepared. Economist Hsu also recognizes that her government is already backpedaling. She says that Taiwan has also recognized that TSMC and the Taiwanese semiconductor industry need to expand their production facilities worldwide.
This is exactly what is already happening. The West, in particular, is making considerable efforts to gain autonomy from Taiwan’s sensitive semiconductor industry. Japan, the United States and Germany successfully got TSMC to set up fabs in Kumamoto, Phoenix and Dresden.
However, the USA, Germany and Japan could further weaken the silicon shield. At least that is the fear of economists Markus Taube from the University of Duisburg Essen, Jorn-Carsten Gottwald, Professor at Ruhr University, and Steffi Weil from the University of Antwerp. In a guest article for China.Table, they wrote: “Semiconductor production in Europe, in particular, could weaken Taiwan.
Semiconductor manufacturers in Taiwan do not see this danger quite so dramatically. “The fabs in Europe and Arizona are only good for national security,” says Wu Miin, founder and CEO of Macronix, one of the largest memory chip manufacturers. Macronix is located in the immediate neighborhood of TSMC and UMC in Hsinchu, Taiwan.
Wu is skeptical whether Europe is really buying more security with the plant in Dresden. It may be sufficient for temporary supply chain interruptions from Taiwan, but not in the long term. The few factories TSMC is prepared to build outside Taiwan are tiny in relation to the output they produce in Taiwan, says the chip entrepreneur. This will not really have an impact on reducing the world’s dependence on Taiwan, he says.
The head of the EV division of property group Evergrande has been arrested. Liu Yongzhuo is suspected of having committed unspecified “criminal offenses” as top executive of the insolvent Evergrande Group. The group announced this on Monday. Liu was also president of China’s former football series champion Guangzhou Evergrande.
After company founder and president Hui Ka-yan, the 42-year-old is the second top executive of the group to be detained. As a result, the share price of the Evergrande subsidiary plummeted by 23 percent. According to the company report, the group held a 58.5 percent stake in the company in 2022.
Evergrande is currently working on a debt restructuring. The company owes investors more than 300 billion euros. On 29 January, a Hong Kong court will decide whether Evergrande will be finally dissolved.
Liu Yongzhuo joined the company in 2003, serving, among other positions, as head of the water and high-tech divisions. In 2009, he joined the Guangzhou Evergrande football club as an official. During his tenure, the club won seven league titles and the Asian Champions League twice. However, the team was relegated from the Super League in 2022. grz
The Swedish company Northvolt has received permission for a battery factory in Germany. On Monday, the EU Commission approved funding and guarantees from the German federal and state governments amounting to 902 million euros. It is the largest industrial project in the German state of Schleswig-Holstein in decades. “I am very, very pleased that this is happening today,” German Economy Minister Robert Habeck told dpa after the decision was announced in Brussels.
From 2026, Northvolt will produce EV battery cells at the plant in the Dithmarschen district. The plant is intended to make the German automotive industry less dependent on dominant suppliers from Asia, especially China. The South Korean electronics groups Samsung and LG and the Chinese group CATL, which has also been producing in a plant in Thuringia for around a year, have high market shares.
The €4.5 billion investment is also expected to create 3,000 jobs. The German federal and state governments will provide around €700 million in funding for the project. In addition, there are guarantees for another €202 million. Of the funding, around €564 million will be provided by the federal government and up to €137 million by the federal state. According to reports, Northvolt itself has already invested around €100 million of its own funds in the construction project. fpe
China’s EV manufacturers struggle with an acute shortage of marine car freighters. According to the Wall Street Journal, the industry cannot export as many cars to Europe as it would like. While the number of vehicles exported has reached a record high following the COVID-19 pandemic, the number of available cargo ships remains below pre-pandemic levels. This creates a bottleneck that could make Chinese companies realize the urgency of global expansion.
The number of cars shipped worldwide is estimated to have increased 17 percent to a record high of 23.4 million vehicles in 2023, the US newspaper quotes shipping company Clarksons. European imports recorded the largest increase of all regions at 40 percent. On the other hand, the number of ships is ten percent below the 2019 figure.
After the outbreak of the pandemic, logistics companies reduced capacity, scrapped old ships and ordered new ones. However, many new orders are not expected to be delivered for another two or three years. The shortage of ships has also pushed up the prices for transport. At a daily cost of 115,000 US dollars per ship, the costs are ten percent higher than in 2022 and seven times higher compared to 2019. grz
US chip manufacturer Nvidia plans to mass-produce AI chips for the Chinese market in the second quarter of 2024. The chips, known as H20, L20 and L2, are designed to comply with the stricter US export regulations for China, Reuters reported on Monday, citing people familiar with the matter. According to Reuters, initial deliveries will be limited and focus mainly on large client orders. US high-performance processors are currently subject to sanctions prohibiting exports to the People’s Republic.
Nvidia aims to sell these chips to secure its market share in China and prevent a drastic drop in sales. Reuters previously reported, citing sources, that Chinese companies are reluctant to buy the semiconductors from the USA, which have been downgraded to lower computing power. Instead, China is increasingly focusing on the development of domestic alternatives. Last year, for instance, tech giant Baidu ordered its AI chips primarily from Huawei Technologies to avoid buying from Nvidia. rtr
When the Taiwanese opposition party Kuomintang (KMT) nominated Jaw Shaw-kong (other spelling: Chao Shao Kang) as its candidate for vice-president at the end of November for the elections on January 13, many observers initially had little sympathy for the nomination. Born in 1950, Jaw is an old KMT party cadre and has hardly been politically active in the last 20 years.
However, Jaw has managed to mobilize the KMT’s traditional voter base. Whether this will be enough to win the election is doubtful. In the latest polls, the KMT, with its leading candidate Hou Yu-ih, was at just under 30 percent, and according to some polls almost ten percentage points behind the DPP with its candidate William Lai.
Jaw’s significance for the KMT also lies in his own family history. His father was a former KMT officer when it still ruled China. He fought in the civil war against Mao’s communists, but lost and fled to Taiwan following the then-KMT leader Chiang Kai-shek. One year later, Jaw was born in Keelung in northeastern Taiwan. He thus belongs to the approximately 15 percent of the Taiwanese population whose families came to Taiwan after the civil war. To this day, this group forms the core of KMT supporters. Hou Yu-ih, on the other hand, is from a family rooted in Taiwan for centuries. Jaw represents the part of the KMT party base that still sees itself with ties to China.
Jaw Shaw-kong studied mechanical engineering at the renowned National Taiwan University in the capital, Taipei. He then began a career at the university and in the chemical industry. In 1987, he became a KMT MP at a time of transition from the KMT one-party dictatorship to the democratic era.
In 1993, Jaw turned against the leadership of the then-KMT party chairman Lee Teng-hui. The reason for this was Lee’s stronger emphasis on a separate Taiwanese identity and his rejection of the doctrine of reconquering the Chinese mainland at all costs under the leadership of the KMT. At the time, Jaw called for “reunification” with China based on this very concept. This goal was already a distant prospect then, but today, it seems like nothing more than an illusion – and yet it remains part of the official party ideology. However, the KMT leadership and Jaw himself no longer openly advocate this position.
Jaw Shaw-kong lost the 1994 election for mayor of Taipei to Chen Shui-bian of the DPP, who later became president. After that, Jaw was mainly a media personality for many years – as chairman of the media conglomerate Broadcasting Corporation of China (BCC), as well as a TV and radio presenter and columnist.
To this day, he is accused of having taken over the BCC from the KMT at a disproportionately low price after the end of the dictatorship. At the time, the KMT had transferred a large part of the former state assets into party property. This process is still the subject of public debate and legal proceedings today.
The fact that Jaw is now running for the KMT at the national level again is an expression of his party’s strategic realignment: As a result of presidential candidate Ko Wen-je from the Taiwan People’s Party, the opposition has become fragmented in the race against the ruling DPP. The KMT now wants to unite its core supporters behind it, which Jaw is doing much better than Hou. He is also considered more charismatic and a stronger leader than Hou.
Politically, Jaw advocates more dialog and economic exchange with China. Just a few months ago, he also called for President Tsai Ing-wen’s military reform to be reversed. In late 2022, she announced that the mandatory military service would be extended from four months to one year. During the election campaign, Jaw has now backed away from this demand – the condition for again reducing the military service period is that China’s military stops invading Taiwanese airspace.
However, Jaw continues using harsh words against the DPP, with claims such as “Voting for the DPP means sending Taiwan’s youth to the battlefield.” In the public debate, the KMT now largely succeeds in portraying the presidential election as a decision between war and peace and itself as the supposed guarantor of peace.
However, this rhetoric also puts off parts of the population who believe that Taiwan needs to be more assertive towards China or for whom other issues are simply more important. The strategy is risky: If the KMT is unsuccessful with Jaw, it would not only be a lost election for them. It would also reinforce the impression that it cannot detach itself from its historical roots of the dictatorship era. Leonardo Pape
Andy Chiang will become Managing Director for DHL Express Hong Kong and Macau and a member of the DHL Express Asia Pacific Management Board. Previously, Chiang was Head of Global Strategic Finance at the express service provider.
Hanns-Philip Wurster has been Managing Director China at KLS Martin since January. Wurster is moving from Tuttlingen to Shanghai for his new position at the medical technology company based in Baden-Wuerttemberg.
Is something changing in your organization? Let us know at heads@table.media!
While tourists in China’s northernmost province of Harbin admire ice sculptures wrapped up tight in winter clothes, the southwestern province of Yunnan has a completely different winter atmosphere. Here, visitors to the city of Jinghong splash themselves with buckets of water at 28 degrees Celsius. The annual water throwing is a traditional festival of the local Dai people.
The presidential elections in Taiwan will keep us very busy into the coming week. We will not know which candidate will win the race until Sunday at the earliest.
What we already know before the election: Taiwan holds an excellent trump card with its leading global chip industry. That is why Felix Lee gives us an insight into the sector’s role as a shield against Chinese aggression. However, whether the quality of the chips produced in Taiwan is enough to prevent a Chinese attack is probably wishful thinking.
A potential Chinese attack on its democratic neighbor would not only be a turning point in international relations. In fact, such an attack would represent the most severe form of interference in the internal affairs of another state. Yet Beijing attempts to internationally outlaw any form of interference by third parties in the internal affairs of other actors.
Beijing currently uses the arrest of an alleged spy from the British Secret Intelligence Service MI6 to portray itself as a victim of outside interference. However, the news also serves other purposes, as Fabian Kretschmer writes. The government deliberately uses the fear of leaks to fuel nationalism.
The strategy certainly bears fruit. But, the resulting mistrust could one day have a negative impact on the economy. International trade and a favorable climate for investment are primarily based on trust. Once this has been used up, the damage would be far greater than that actually caused by foreign agents.
China’s accusations against the British Secret Intelligence Service appear straight from a James Bond movie: Beijing claims that MI6 hired a man to obtain state secrets from the People’s Republic during his business trips as an executive of a consulting firm. State security finally publicized the case on Monday, and the suspected spy has since been arrested.
In reality, the news raises more questions than answers. For one thing, the claims cannot be independently verified, and the British embassy in Beijing has not yet commented on the allegations.
Moreover, even the official accounts of the Chinese authorities are incomplete: Neither the gender nor the nationality of the presumed spy have been disclosed – let alone which state secrets he allegedly stole. Nevertheless, the case sheds light on China’s growing paranoia about national security, which increasingly involves its population of 1.4 billion citizens.
Since the most recent tightening of legislation last summer, the definition of espionage in the Middle Kingdom is so broad that practically any conventional market research or even tourist smartphone snapshots can be considered as such.
This is because all actions and data that concern China’s “national interests” are now punishable – an extremely loose term. For example, anyone who takes a photo of a civilian airport that is also used by the military is, by definition, in possession of a state secret. This also includes climate data.
Unsurprisingly, authorities have repeatedly targeted foreign nationals in recent months. In March 2023, for example, a Japanese businessman was arrested for espionage. The authorities have also raided several US consulting firms and seized their laptops.
The European Chamber of Commerce recently strongly criticized the stricter legislation. They say companies can’t know exactly where the legal red lines are, as the rules are completely vague. Expert Isabelle Feng from the Perelman Center for the Philosophy of Law at the Université Libre de Bruxelles speaks of a ‘Sword of Damocles‘ hanging over companies.
Private individuals are also threatened with the arbitrary application of the law. The South Korean embassy in Beijing recently urged its citizens not to take photos of protests or participate in Christian missionary activities.
However, this vagueness of the legal provisions is not an oversight, but deliberate: On the one hand, it gives the authorities a broad and arbitrary scope for applying the anti-espionage laws. On the other hand, it creates a feeling of insecurity that ultimately leads to anticipatory obedience.
There are also undesirable consequences for China, such as the deterrent effect on foreign investors. The government seems to be willing to accept this, however. Through public campaigns, it deliberately puts its own population on heightened alert. Anyone walking through the corridors of Chinese state-owned enterprises, for example, will find countless information sheets and omnipresent propaganda slogans on the walls explaining the most efficient way to identify and report spies.
Even school children receive anti-espionage training, as the state media proudly report every week. In one particularly bizarre case, teachers in a kindergarten in the east coast city of Tianjin were even taught how to “understand and apply” the anti-espionage law. Furthermore, citizens receive up to 65,000 euros if they successfully report spies to the authorities.
The reasons for the heightened paranoia are rooted in a genuine threat situation: China and the US are engaged in an ideological and technological hegemonic dispute fought at all levels. And as recently as last summer, CIA Director William Burns said that the United States would rebuild its spy network in China.
At the same time, however, Beijing’s anti-espionage campaign is probably also based on the political strategy of creating social cohesion in difficult economic times using a dangerous mixture of collective fear and overflowing nationalism.
The narrative also offers a convenient scapegoat: China’s state leadership always blames “foreign infiltration” for every form of political opposition – from the now-defeated democracy movement in Hong Kong to last winter’s “zero Covid” protests.
These seemingly hollow phrases have recently led to tangible consequences in everyday life: Many Chinese academics and journalists now avoid informal meetings with foreigners. And time and again, clubs and organizers of cultural events report that they are not allowed to allow international artists to perform. Fabian Kretschmer
In his New Year’s address, Xi Jinping once again made it clear that he considers the “reunification” of Taiwan and China to be “a historical inevitability.” Should Lai Ching-te from the ruling DPP win the election next Sunday, the risk of a blockade of Taiwan by China will rise again. This is because the Beijing leadership has labeled Lai a “separatist.” Such rhetoric is the beginning of the justification for an attack on the neighboring country.
If it weren’t for Taiwan’s semiconductor industry, some experts would argue. After all, the island is by far the world’s largest supplier of semiconductors and computer chips. 65 percent of all semiconductors and more than 90 percent of high-performance chips are manufactured in Taiwan. An attack on Taiwan would bring semiconductor production to a grinding halt – with disastrous consequences for the global economy. And therefore also for China.
However, most observers, including those on the ground in Taiwan, believe that the protective effect of the chip industry’s pledge is limited. Xi could pursue his superpower ambitions regardless of any consequential damage, and China’s own chip manufacturers are catching up with their own cutting-edge technology. At the same time, TSMC’s investments, for example, in Germany, only provide the West with limited security: If Taiwan falls, the supply of cutting-edge chips will also fail.
Today, no product can be manufactured without semiconductors. Be it smartphones, kitchen appliances, cars, weapons, industrial equipment or energy supplies – they are all controlled by microchips. And the best semiconductor manufacturers are TSMC, UMC, PSMC or Macronix. They all come from Taiwan.
TSMC is particularly strong when it comes to the fastest processors for applications such as AI, graphics cards and self-driving cars. The company uses the most advanced technology in the 3-nanometer range and will break the 2-nanometer barrier in 2025. The term refers to the process size, i.e., the diameter of the computing nodes and conductor paths. The smaller they are, the faster, more intelligent and more energy-efficient the chip is.
Various parties argue that such an indispensable key industry could protect the island from attack. In October 2021, Taiwan’s outgoing president, Tsai Ing-wen, spoke of a “silicon shield that allows Taiwan to protect itself and others from aggressive attempts by authoritarian regimes to disrupt global supply chains.”
Chip expert and Harvard historian Chris Miller writes in his book “The Chip War” that we might have trouble even getting a dishwasher if Taiwan falls. After a disaster in Taiwan, the total costs would run into the trillions. It would take at least half a decade to rebuild the lost chip manufacturing capacity.
But the rest of the world would not only be left without household appliances for a while. China itself would be massively affected. After all, China’s economy is also dependent on Taiwanese semiconductors. Semiconductors and digital displays account for over 60 percent of Taiwan’s exports to China. Trade between Taiwan and China is effectively “a semiconductor trade,” says Taiwanese economist Lee Roy Chun at the Chung Hua Institute for Economic Research (CIER) in Taipei.
He also considers this dependency to be a decisive factor. The trade expert is convinced that China’s economic advantages would be undermined if Taiwan lost its ability to continue to serve as a global market leader in the semiconductor industry.
His colleague Kristy Hsu, an economist at the same institute, disagrees. “There are other reasons why China would invade Taiwan, such as Taiwan declaring its independence,” she said in an interview with China.Table. “Semiconductors are never the primary focus of this decision.”
Chip expert Miller also believes that relying on a silicon shield is an “extremely optimistic view of things.” However, he believes that the concentration of semiconductor production in Taiwan is definitely a threat to the global economy for which the West is not sufficiently prepared. Economist Hsu also recognizes that her government is already backpedaling. She says that Taiwan has also recognized that TSMC and the Taiwanese semiconductor industry need to expand their production facilities worldwide.
This is exactly what is already happening. The West, in particular, is making considerable efforts to gain autonomy from Taiwan’s sensitive semiconductor industry. Japan, the United States and Germany successfully got TSMC to set up fabs in Kumamoto, Phoenix and Dresden.
However, the USA, Germany and Japan could further weaken the silicon shield. At least that is the fear of economists Markus Taube from the University of Duisburg Essen, Jorn-Carsten Gottwald, Professor at Ruhr University, and Steffi Weil from the University of Antwerp. In a guest article for China.Table, they wrote: “Semiconductor production in Europe, in particular, could weaken Taiwan.
Semiconductor manufacturers in Taiwan do not see this danger quite so dramatically. “The fabs in Europe and Arizona are only good for national security,” says Wu Miin, founder and CEO of Macronix, one of the largest memory chip manufacturers. Macronix is located in the immediate neighborhood of TSMC and UMC in Hsinchu, Taiwan.
Wu is skeptical whether Europe is really buying more security with the plant in Dresden. It may be sufficient for temporary supply chain interruptions from Taiwan, but not in the long term. The few factories TSMC is prepared to build outside Taiwan are tiny in relation to the output they produce in Taiwan, says the chip entrepreneur. This will not really have an impact on reducing the world’s dependence on Taiwan, he says.
The head of the EV division of property group Evergrande has been arrested. Liu Yongzhuo is suspected of having committed unspecified “criminal offenses” as top executive of the insolvent Evergrande Group. The group announced this on Monday. Liu was also president of China’s former football series champion Guangzhou Evergrande.
After company founder and president Hui Ka-yan, the 42-year-old is the second top executive of the group to be detained. As a result, the share price of the Evergrande subsidiary plummeted by 23 percent. According to the company report, the group held a 58.5 percent stake in the company in 2022.
Evergrande is currently working on a debt restructuring. The company owes investors more than 300 billion euros. On 29 January, a Hong Kong court will decide whether Evergrande will be finally dissolved.
Liu Yongzhuo joined the company in 2003, serving, among other positions, as head of the water and high-tech divisions. In 2009, he joined the Guangzhou Evergrande football club as an official. During his tenure, the club won seven league titles and the Asian Champions League twice. However, the team was relegated from the Super League in 2022. grz
The Swedish company Northvolt has received permission for a battery factory in Germany. On Monday, the EU Commission approved funding and guarantees from the German federal and state governments amounting to 902 million euros. It is the largest industrial project in the German state of Schleswig-Holstein in decades. “I am very, very pleased that this is happening today,” German Economy Minister Robert Habeck told dpa after the decision was announced in Brussels.
From 2026, Northvolt will produce EV battery cells at the plant in the Dithmarschen district. The plant is intended to make the German automotive industry less dependent on dominant suppliers from Asia, especially China. The South Korean electronics groups Samsung and LG and the Chinese group CATL, which has also been producing in a plant in Thuringia for around a year, have high market shares.
The €4.5 billion investment is also expected to create 3,000 jobs. The German federal and state governments will provide around €700 million in funding for the project. In addition, there are guarantees for another €202 million. Of the funding, around €564 million will be provided by the federal government and up to €137 million by the federal state. According to reports, Northvolt itself has already invested around €100 million of its own funds in the construction project. fpe
China’s EV manufacturers struggle with an acute shortage of marine car freighters. According to the Wall Street Journal, the industry cannot export as many cars to Europe as it would like. While the number of vehicles exported has reached a record high following the COVID-19 pandemic, the number of available cargo ships remains below pre-pandemic levels. This creates a bottleneck that could make Chinese companies realize the urgency of global expansion.
The number of cars shipped worldwide is estimated to have increased 17 percent to a record high of 23.4 million vehicles in 2023, the US newspaper quotes shipping company Clarksons. European imports recorded the largest increase of all regions at 40 percent. On the other hand, the number of ships is ten percent below the 2019 figure.
After the outbreak of the pandemic, logistics companies reduced capacity, scrapped old ships and ordered new ones. However, many new orders are not expected to be delivered for another two or three years. The shortage of ships has also pushed up the prices for transport. At a daily cost of 115,000 US dollars per ship, the costs are ten percent higher than in 2022 and seven times higher compared to 2019. grz
US chip manufacturer Nvidia plans to mass-produce AI chips for the Chinese market in the second quarter of 2024. The chips, known as H20, L20 and L2, are designed to comply with the stricter US export regulations for China, Reuters reported on Monday, citing people familiar with the matter. According to Reuters, initial deliveries will be limited and focus mainly on large client orders. US high-performance processors are currently subject to sanctions prohibiting exports to the People’s Republic.
Nvidia aims to sell these chips to secure its market share in China and prevent a drastic drop in sales. Reuters previously reported, citing sources, that Chinese companies are reluctant to buy the semiconductors from the USA, which have been downgraded to lower computing power. Instead, China is increasingly focusing on the development of domestic alternatives. Last year, for instance, tech giant Baidu ordered its AI chips primarily from Huawei Technologies to avoid buying from Nvidia. rtr
When the Taiwanese opposition party Kuomintang (KMT) nominated Jaw Shaw-kong (other spelling: Chao Shao Kang) as its candidate for vice-president at the end of November for the elections on January 13, many observers initially had little sympathy for the nomination. Born in 1950, Jaw is an old KMT party cadre and has hardly been politically active in the last 20 years.
However, Jaw has managed to mobilize the KMT’s traditional voter base. Whether this will be enough to win the election is doubtful. In the latest polls, the KMT, with its leading candidate Hou Yu-ih, was at just under 30 percent, and according to some polls almost ten percentage points behind the DPP with its candidate William Lai.
Jaw’s significance for the KMT also lies in his own family history. His father was a former KMT officer when it still ruled China. He fought in the civil war against Mao’s communists, but lost and fled to Taiwan following the then-KMT leader Chiang Kai-shek. One year later, Jaw was born in Keelung in northeastern Taiwan. He thus belongs to the approximately 15 percent of the Taiwanese population whose families came to Taiwan after the civil war. To this day, this group forms the core of KMT supporters. Hou Yu-ih, on the other hand, is from a family rooted in Taiwan for centuries. Jaw represents the part of the KMT party base that still sees itself with ties to China.
Jaw Shaw-kong studied mechanical engineering at the renowned National Taiwan University in the capital, Taipei. He then began a career at the university and in the chemical industry. In 1987, he became a KMT MP at a time of transition from the KMT one-party dictatorship to the democratic era.
In 1993, Jaw turned against the leadership of the then-KMT party chairman Lee Teng-hui. The reason for this was Lee’s stronger emphasis on a separate Taiwanese identity and his rejection of the doctrine of reconquering the Chinese mainland at all costs under the leadership of the KMT. At the time, Jaw called for “reunification” with China based on this very concept. This goal was already a distant prospect then, but today, it seems like nothing more than an illusion – and yet it remains part of the official party ideology. However, the KMT leadership and Jaw himself no longer openly advocate this position.
Jaw Shaw-kong lost the 1994 election for mayor of Taipei to Chen Shui-bian of the DPP, who later became president. After that, Jaw was mainly a media personality for many years – as chairman of the media conglomerate Broadcasting Corporation of China (BCC), as well as a TV and radio presenter and columnist.
To this day, he is accused of having taken over the BCC from the KMT at a disproportionately low price after the end of the dictatorship. At the time, the KMT had transferred a large part of the former state assets into party property. This process is still the subject of public debate and legal proceedings today.
The fact that Jaw is now running for the KMT at the national level again is an expression of his party’s strategic realignment: As a result of presidential candidate Ko Wen-je from the Taiwan People’s Party, the opposition has become fragmented in the race against the ruling DPP. The KMT now wants to unite its core supporters behind it, which Jaw is doing much better than Hou. He is also considered more charismatic and a stronger leader than Hou.
Politically, Jaw advocates more dialog and economic exchange with China. Just a few months ago, he also called for President Tsai Ing-wen’s military reform to be reversed. In late 2022, she announced that the mandatory military service would be extended from four months to one year. During the election campaign, Jaw has now backed away from this demand – the condition for again reducing the military service period is that China’s military stops invading Taiwanese airspace.
However, Jaw continues using harsh words against the DPP, with claims such as “Voting for the DPP means sending Taiwan’s youth to the battlefield.” In the public debate, the KMT now largely succeeds in portraying the presidential election as a decision between war and peace and itself as the supposed guarantor of peace.
However, this rhetoric also puts off parts of the population who believe that Taiwan needs to be more assertive towards China or for whom other issues are simply more important. The strategy is risky: If the KMT is unsuccessful with Jaw, it would not only be a lost election for them. It would also reinforce the impression that it cannot detach itself from its historical roots of the dictatorship era. Leonardo Pape
Andy Chiang will become Managing Director for DHL Express Hong Kong and Macau and a member of the DHL Express Asia Pacific Management Board. Previously, Chiang was Head of Global Strategic Finance at the express service provider.
Hanns-Philip Wurster has been Managing Director China at KLS Martin since January. Wurster is moving from Tuttlingen to Shanghai for his new position at the medical technology company based in Baden-Wuerttemberg.
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