The current goal of democratic countries: Economic independence from dictatorships and autocracies – a truly difficult process, as the analysis by guest author Alexander Görlach shows. After all, countries like China are also pursuing their own interests.
Democratic countries around the world are trying to make themselves economically independent of dictatorships and autocracies. This is a sometimes painful process, as Germans are currently realizing and learning. Dependence on cheap Russian gas is literally costing them dearly as winter approaches.
The United States and Israel, among others, offer themselves as alternative suppliers to Putin’s regime, which attacked Russia’s neighbor Ukraine in February in violation of international law. However, such a conversion will not happen overnight and will be more expensive than previous gas supplies.
Alexander Görlach is Honorary Professor of Ethics at Leuphana University in Lüneburg and Senior Fellow at the Carnegie Council for Ethics in International Affairs in New York. The PhD linguist and theologian is currently working on a project on “digital cosmopolitanism” at the Internet Institute of the University of Oxford and the Faculty of Philosophy at New York University.
Alexander Görlach was a Fellow and Visiting Scholar at Harvard University in the USA and Cambridge University in England. After stints in Taiwan and Hong Kong, he has focused on the rise of China and what it means for East Asian democracies in particular. He has recently published the following titles: “Red Alert: Why China’s Aggressive Foreign Policy in the Western Pacific Is Leading to a Global War” (Hoffmann
From 2009 to 2015, Alexander Görlach was also the publisher and editor-in-chief of the debate magazine The European, which he founded. Today he is a columnist and author for various media such as the Neue Zürcher Zeitung and the New York Times. He lives in New York and Berlin.
It is not only the energy supply that is under scrutiny in the face of aggravated geopolitical circumstances. The corona pandemic has slowed down supply chains all over the world, and in some cases brought them to a standstill. With the 26-million metropolis of Shanghai locked down for two months, the rest of the world quickly realized that the People’s Republic had become the number one exporter of important ingredients and components, such as magnesium.
With China’s ruler Xi continuing to pursue a “zero-Covid” strategy, intended to hide the fact that he and his nomenklatura have still not released an effective vaccine to date, it can be expected that it will continue to do so in the coming months There will be delivery bottlenecks of all kinds.
Red Alert: How China’s aggressive foreign policy in the Pacific is leading to a global war
The focus of the whole world is on one industry: the past few weeks have shown that products from the electric car that Tesla has built in Shanghai to the iPhones from Apple that are assembled in Shenzhen need chips that only a few actors in the world can produce.
In order not to remain dependent on the dictatorship in Beijing, the USA and Germany, for example, are considering how they can decouple themselves from China’s manufacturing power. The Biden administration has announced plans to invest $50 billion in domestic chip development and production. Germany has not given an exact figure, but it is said to be several billion euros.
Germany’s announcement comes in the context of a pan-European initiative in which manufacturer Intel has announced plans to build a new chip factory near Magdeburg. The costs should amount to 17 billion euros. Bosch has also announced that it will invest 400 million euros in chip factories.
These shifts have not gone unnoticed by the People’s Republic either. China itself must react to the expected drop in orders from the free world. Beijing is therefore trying to decouple the People’s Republic from the rest of the world and needs a tiny country in its vicinity when it comes to secure chip production: Taiwan.
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Taiwanese companies are among the world leaders when it comes to developing and manufacturing semiconductors. The leading company TSMC produces both on the island of Taiwan itself and on the Chinese mainland. China brings the necessary rare earths for production, without which no chip could be produced.
Observers believe that due to this combination between the two, the war of aggression against the neighboring island democracy announced by ruler Xi will not materialize in the short to medium term. Of course, the Chinese army could, as Xi has repeatedly suggested, invade and occupy the independent country.
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However, the danger that the production facilities could be hit by rockets and personnel who know how to produce the chips could be killed is too great. As such, it appears for the moment that China will exercise restraint until the leadership can ensure that it can either take land without endangering the important industry and with it the semiconductor supply chain, or itself in able to carry out the complex production process.
However, Taiwan should not be prepared for a long respite. Because like the USA and the EU, the People’s Republic is also pumping a lot of money into the development of a national industry. According to a media report, the Chinese manufacturer SMIC claims to have made good the backlog in in-house production in the recent past.
In any case, this claim is currently not covered by anything in reality: Only 17 percent of the chips that are installed in China were also manufactured in China. The party is now making ambitious targets: by 2025, 70 percent of semiconductors should be “Made in China”.
Taiwan, like the rest of the world, knows that China is not afraid to steal intellectual property for its own benefit. The government in Taipei therefore prohibits the construction of new production facilities in the People’s Republic in order to reduce the risk of such theft.
The People’s Republic, which long thought it was safe to be able to lure with market access and in return not to be bothered with too much political headwind for copyright and human rights violations, has to change this “model” in view of the changed circumstances on the world market and in geopolitics .
Xi Jinping’s idea is to move from an export-oriented economy to one that relies on domestic consumption. In order to generate corresponding growth rates here in the long term, people or households in China would have to go into debt, as is common in the USA and Great Britain. Such credit capitalism is not advisable in a country where millions upon millions of people still live on less than a dollar a day.
But Beijing’s leaders remain doting on anything that comes out of America. Despite all hostilities towards Washington, Beijing ultimately wants to copy the unbridled capitalism that is responsible for the high level of inequality in the USA.
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