America is ready to stake everything over Taiwanese chips
On Tuesday evening, when Nancy Pelosi stepped off the SPAR19 in Taipei, the world once again held its breath over what might come next.
Like Russian soldiers amassing at the border of Ukraine or the first reports of a deadly virus in Wuhan, there is an unshakable feeling that this is a moment that could have seismic consequences.
The US speaker had been warned in no uncertain terms not to make the trip by the Chinese government and up until the moment she touched down, many thought she wouldn’t.
According to the flight-tracking app FlightRadar, her journey was the most tracked live flight in their history, with some 708,000 people following the aircraft.
It broke the previous record – Alexey Navalny’s commercial flight back to Russia in January 2021 after a possible poisoning attempt on his life (550,000 users) – by a considerable margin.
With 708,000 people tracking the aircraft upon landing in Taipei, SPAR19 is Flightradar24’s most tracked live flight of all time. https://t.co/RifLnVzeMP pic.twitter.com/m2OBIV9RME
— Flightradar24 (@flightradar24) August 2, 2022
Tensions flare
Shortly after Pelosi’s arrival, a representative of the Chinese legislature’s Standing Committee issued a statement saying the trip “severely violated” the “One China principle” – Beijing’s claim to be the sole government of both mainland China and Taiwan.
It followed an earlier statement sent out by the Chinese foreign minister, Wang Yi, that said Washington’s betrayal “on the Taiwan issue is bankrupting its national credibility”.
“Some American politicians are playing with fire on the issue of Taiwan,” Wang said in a statement, adding: “This will definitely not have a good outcome… the exposure of America’s bullying face again shows it as the world’s biggest saboteur of peace.”
Alarming footage captured by holidaymakers at a beach in Fujian province (the closest point in Chinese territory to Taiwan) shows a huge convoy of army tanks and armoured vehicles driving across the sand in front of shocked beach-goers.
Chinese propaganda released Tuesday warned: “We are fully prepared for any eventuality. Fight upon order, bury every intruder, and move toward joint and successful operations.
“We are PLA soldiers, we swear to defend the motherland to the death.”
Latest footage circulating on Chinese social media WeChat shows armoured vehicles on the move in the southern Chinese city of Xiamen, as US Speaker Pelosi is reportedly heading to Taipei. pic.twitter.com/ePpJsO2VyM
— Bang Xiao 萧邦 (@BangXiao_) August 2, 2022
Democracy, or something else?
Pelosi has said she and other members of Congress visiting Taiwan are showing they will not abandon their commitment to the self-governing island, which has long-fought for proper independence and international recognition separate from China.
“Today the world faces a choice between democracy and autocracy,” she said in a short speech during a meeting with Taiwan’s President, Tsai Ing-wen.
“America’s determination to preserve democracy, here in Taiwan and around the world, remains ironclad.”
Our delegation’s visit to Taiwan honors America’s unwavering commitment to supporting Taiwan’s vibrant Democracy.
Our discussions with Taiwan leadership reaffirm our support for our partner & promote our shared interests, including advancing a free & open Indo-Pacific region.
— Nancy Pelosi (@SpeakerPelosi) August 2, 2022
But there is likely to be another reason for her making the trip now, reasons many of people in the UK will have become unknowingly aware of over the last year, and it is to do with the manufacture of Taiwanese semiconductor chips.
PlayStations and Minis
Heightened tensions between the US and China have put a spotlight on the world’s incredible reliance on Taiwan for crucial semiconductor chips.
It’s an issue that’s especially prescient given the ongoing global impact of Russia’s invasion of Ukraine that is about to cause an impending gas crisis in Germany due to Russia’s squeeze on gas supplies.
A recent global chip shortage stemming from 2020 onwards has had massive knock-on effects for the auto industry, for example, forcing many large firms to halt production, and even delayed how many people got their hands on the latest PlayStation.
But the problems will extend beyond consumer goods.
As Rory Stewart pointed out on The Rest is Politics podcast, Taiwan produces 50 per cent of the world’s semiconductor chips but, more importantly, 92 per cent of the all advanced semiconductor chips, which have applications in advanced military equipment and advanced jets.
If we become cut off from those chips, the consequence is “beyond imagining”, the former Conservative politician says.
Worst case scenario
Following Pelosi’s trip, there is a growing chance that Xi Jinping will feel obligated to move on Taiwan. Stewart puts that chance at 30 per cent. The likelihood is that he would revise that up a notch now.
“I cannot begin to tell you how bad it will be because, if 50 per cent of semiconductor chips are removed from production, there will be a frenzied bidding war that will make the bidding war about vaccines seem tiny.
“The rich countries will try to buy every last semiconductor chip in the world, and in places like Africa, their telephones will collapse, their distribution systems will collapse.
“Everything now depends on semiconductor chips.”
US moves
The US is more prepared for this eventuality, with the Taiwan Semiconductor Manufacturing Company (TSMC) already building a chip factory in Arizona in a project seen as key to US national security, the Washington Post reports.
But elsewhere, we’re looking a lose-lose situation, particularly, as Stewart points out, for poorer countries in the World.
With grain in short supply, a devastating heatwave ravishing crops and now a semiconductor crisis on the horizon, we are seeing a quite perilous situation unfold in Asia, and it is coming at the very worst time.
Related links:
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- Xi Jinping issues stark warning to enemies trying to bully China in anniversary speech
