The Yellowidiots have always been pushing for the US agenda in the region, specially when it comes to the US-China rivalry. China as the emerging hegemon, because of its military and economic power and the US, as the reigning hegemon because of the same. The difference between the two is China hasn’t been playing an interventionist role in other countries unlike the US, which has been involved in regime-change and wars since 1946.
The Americans opened up trade with China for two reasons; one is to take advantage of its cheap labor force to manufacture and supply the US with goods which makes for huge profits for American companies. Second was the belief that once economic progress is achieved, more Chinese would be enamored of Western style democracy and freedoms, only existent in Hong Kong, Macau and Taiwan, that the people would eventually overthrow the authoritarian government and replace it with a democratic one.
It was right on the first but wrong on the second. The Politburo has managed to become economically progressive while maintaining the one country, two systems principle of Deng Xiao Ping. China is now the world’s second largest economy and is poised to take over the top spot from the US in the near future.
It is the second largest holder of US debt. This cash hoard is invested in lending to developing countries which is why China formed the AIIB, which is similar to the ADB. The sphere of Chinese influence is being widened through development, rather than regime-change. The Chinese could care less about the form of government in countries it wishes to cultivate close economic relationships with. What’s important is the quid pro quo is established and maintained for the long-term.
This brings us to the issue of the South China Sea disputes with specific ASEAN member countries, including the Philippines, which all have competing claims in the South China Sea, and the insistence of the opposition that our best bet is on the US, not China.
Indo-Pacific News
We all know what went on behind-the-scenes as to why we lost Scarborough Shoal in 2012, on the bungling of then President Benigno Aquino III and Foreign Secretary Albert Del Rosario. It wasn’t the interest of the Philippines they were protecting but the interest of certain oligarchs they were loyal to and the Americans.
US Secretary of State Anthony Blinken will be visiting the country to meet with President Ferdinand Marcos about US-PH ties, pariticularly the Mutual Defense Treaty in relation to the South China Sea issue and of course, other matters such as the EDCA and the VFA.
This is the first visit of a high-ranking official from the Biden administration. During the Duterte administration, then President Donald Trump visited the Philippines to attend the extended ASEAN Summit, celebrating its 50th anniversary, which the country hosted. Trump’s policy of non-interference and non-intervention was one which Duterte was in favor of.
But it’s a different story now with the Biden administration. We have been witness to the events in Europe leading to the Russian invasion of Ukraine. There is also heightened tension between the US and China over Taiwan. The US would like to put both China and Russia in their proper place, given that both are emerging as rivals and finding it in their best interests to enter into an alliance under the BRICS, which is composed of Brazil, Russia, India, China and South Africa.
The US and European countries control the global economy and the financial markets through the G20. While the BRICS countries are also included in the G20, there have been several conflicts of late which have provided an opportunity for China and Russia to consolidate their position and form another entity independent of the G20. The primary reason has and always will be, the geopolitical differences on politics and the economy, in relation to the policies of US and Europe with regard to other developed and developing or emerging market economies.
The US is the dominant hegemon with its economy being the world’s largest, the dollar being the global fiat currency and its military, which it uses to impose its will in countries where it has a vested interest or would like to impose its “democratic principles.” Recall how post-World War II, the battle was against communism. The Cold War ended after the Berlin Wall came down and the USSR and its satellite states broke up to become independent countries.
Aside from the South China Sea disputes, the other flashpoint in the Asia-Pacific region is Taiwan. China views Taiwan as a renegade province despite the declaration of its government that it wants to be independent of China. Since the 1970s, Taiwan has become a diplomatic pariah, with other countries only maintaining indirect relatonships with the Taiwanese as most have adopted a One-China policy, recognizing only the People’s Republic of China as the sole Chinese state.
The US however, continues to use Taiwan as a pawn in the region. It has supplied Taiwan with military hardware to bolster its defense capabaility against a possible Chinese invasion. Taiwan is a key piece to both China and the US because of its silicon chip foundries.
The Taiwanese semiconductor industry, including IC manufacturing, design, and packing, forms a major part of Taiwan‘s IT industry. Due to its strong capabilities in OEM wafer manufacturing and a complete industry supply chain, Taiwan has been able to distinguish itself from its competitors and dominate the global marketplace. Taiwan semiconductor sector accounted for US$115 billion, which is ca. 20% of global semiconductor industry. In selected sectors like foundry operations, Taiwanese companies account for 50% of world market, with Taiwan Semiconductor Manufacturing Company (TSMC) being the biggest player in the foundry market.
In 1987, TSMC pioneered the fabless foundry model, reshaping the global semiconductor industry. From ITRI‘s first 3-inch wafer fabrication plant built in 1977 and the founding of UMC in 1980, the industry had developed into a world leader with 40 fabs in operation by 2002. In 2007, the semiconductor industry overtook that of the United States, second only to Japan.
The sector output reached US$39 billion in 2009, ranking first in global market share in IC manufacturing, packaging, and testing, and second in IC design. Although the global financial crisis from 2007 to 2010 affected sales and exports, the industry has rebounded with companies posting record profits for 2010. In 2010 Taiwan had the largest share of 300 nm, 90 nm, and 60 nm manufacturing capacities worldwide, and was expected to pass Japan in total IC fab capacity by mid-2011. By 2020 Taiwan was the unmatched leader of the global semiconductor industry with Taiwan Semiconductor Manufacturing Company (TSMC) alone accounting for more than 50% of the global market.
Due to its significant position in both the American and Chinese tech industry supply chains Taiwan has become an issue in the China–United States trade war and the larger geopolitical conflict between the two powers. The US prohibited companies which use American equipment or IP from exporting products to prohibited companies in China. This forced Taiwanese semiconductor companies to stop doing business with major Chinese clients like Huawei.
In January 2021 the German government appealed to the Taiwanese government to help persuade Taiwanese semiconductor companies to ramp up production as a global semiconductor shortage was hampering the German economy’s recovery from the COVID-19 pandemic. A lack of semiconductors had caused vehicle production lines to be idled leading German Economy Minister Peter Altmaier to personally reach out to Taiwan’s economics affairs minister Wang Mei-hua in an attempt to get Taiwanese semiconductor companies to increase their manufacturing capacity. Similar requests had been made by the United States, the European Union, and Japan. The Taiwanese government and TSMC announced that as much as was possible priority would be given to automakers from Taiwan’s close geopolitical allies.
In April 2021 the US Government blacklisted seven Chinese supercomputing companies due to alleged involvement in supplying equipment to the PLA, Chinese military–industrial complex, and WMD programs. In response Taiwanese chipmakers Alchip and TSMC suspended new orders from Chinese supercomputing company Tianjin Phytium Information Technology.
The geopolitical strength of the semiconductor industry is often referred to as Taiwan’s “Silicon Shield.” According to the New York Times “Taiwan has relied on its dominance of the microchip industry for its defense. The “silicon shield” theory argued that because its semiconductor industry is so important to Chinese manufacturing and the United States consumer economy, actions that threaten its foundries would be too risky.”
As technology is now present in most anything and everything, computers, smartphones, tablets, cars, appliances and every other conceivable consumer product which has a computing chip inside of it, Taiwan is the prize that the US and China are fighting for.
Taiwan’s semiconductor industry, combined with its manufacturing prowess, would allow China to overtake the US economy faster. Not only that, it will also dominate global manufacturing.
While the US has pioneered in silicon chips, it has fallen behind in terms of research and development and production capabilities. Intel’s chip business has floundered because it miscalculated the market demand for mobile devices.
Qualcomm is recognized as offering better quality and functionality in terms of silicon chips before but TSMC and Mediatek have now reached the point where they are at par with Qualcomm in terms of innovation and quality, particularly in the production of thinner silicon chips. This is why there are a large number of entry-level smartphones produced by Chinese manufacturers. They are also the leading producers for computer chips used in most consumer devices which require one.
Blinken is visiting the country to meet with the President because the US badly needs to obtain base rights in the Philippines. While they have Anderson Air Force base in Guam, it’s too far for a quick reaction force in the event the Chinese decide to take back Taiwan. China has the geographical advantage because their military bases are just off the Taiwan Strait. The grant of base rights to the US would result in our being in the line of fire if the US stands by Taiwan should China invade.
The US is also wary of the emerging China-Russia alliance. The trip of US House Speaker Nancy Pelosi is not only influence projection for the US but she’s also taking the temperature of key regional players such as Singapore, which US Navy ships also use for repair and replenishment. What’s more important for Pelosi is to know where the chips will fall in the event of a US-China conflict breaking out in the region.
An attack on Taiwan would also have an impact on our OFWs who are employed by Taiwanese manufacturers. This is another consideration which merits the consideration of President Marcos. We also have close relations with Taiwan since the northernmost island chain of Batanes is just like a next door neighbor to the Taiwanese mainland.
The threat of China to Taiwan isn’t limited to Taiwan alone. There are also the disputed Senkaku Islands between China and Japan. Right next to Japan is the Korean Peninsula. There is no love lost between the Chinese and Koreans nor with the Japanese and Koreans as both the undivided Korea and Taiwan, then known as Formosa, were both Japanese colonies.
As you can see, we sit right in the middle of these hotspots. It can’t happen that we start taking sides between the US and China. To do so would mean incurring the ire of China which is now our top trading partner. It’s good that President Marcos is following the policy set by PRRD when it comes to our relationships with the US, China, ASEAN, Japan and South Korea.
This is unlike the battle against communism during the Cold War. This is about the rising power of China and the US wanting to put China in its proper place, at least in its opinion, that it can’t overtake the US as the dominant military and economic power globally. The Chinese have never been known as a global hegemon like the US.
However, as the emergence of new world orders go, China needs natural resources for economic inputs. This is why it’s pushing for its economic initiatives such as the Belt and Road and the Silk Road, which aims to resurrect old trade routes from Asia to Europe.
Our experience in World War II when we were still an American colony should have imbued us with enough lessons about what happens when elephants fight.
We certainly live not only in interesting, but also very dangeorous times.
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