Friday News Roundup — December 2, 2022
Unrest in China & COVID Reopening; NATO, Turkey & the Kurds; World Cup Diplomacy; Japan’s Semiconductor Gambit
We have reached December, and, returning from the Thanksgiving recess, the lame duck session has begun. In a historic moment on Tuesday, the Senate passed the Respect for Marriage Act in a 61–36 vote, ensuring that same-sex and interracial marriages would be recognized across state lines should the Supreme Court overturn the 2015 Obergefell v. Hodges decision granting marriage to same-sex couples.
Following President Biden’s appeal, Congress also moved rapidly to codify the labor deal rejected by railroad unions. A competing proposal that would have provided railroad workers with seven days of paid sick leave failed to reach 60 votes in the Senate. Still, this action forestalls a railroad strike that would have cost the economy an estimated $2 billion a day.
Now, the remainder of the session is focused largely on whether a budget deal can be reached to prevent a continuing resolution for 2023. First, however, most political attention is focused on the Georgia runoff on Tuesday, where the crucial difference between a 50–50 and 51–49 Senate will be determined.
Overseas, Russia continued its bombardment of Ukrainian energy infrastructure, forcing civilians into cold and darkness during the winter months. NATO leaders also met this week in Bucharest, Romania, to discuss the need to support and rebuild Ukraine, bolster the alliance’s own military capabilities, and also to consider the alliance’s position vis-a-vis China. At the same time, China was racked by protests over the zero COVID policy, which Dan Mahaffee covers below in more detail.
In the media this week, the Diplomatic Courier published Joshua Huminski’s review of Michael Smith’s “The Real Special Relationship”, which looks at the history of U.S.-UK intelligence cooperation. In an update to what we shared earlier in November, CSPC Fellows alumni Sarath Ganji further analyzes Qatar’s continued use of sport for bolstering its reputation, while Dr. Aamir Hussain writes in The Hill about tackling medical debt.
In addition to Dan’s coverage of the protests in China, Ethan Brown asks how long NATO can tolerate the instability created by Turkey as it plans to invade northern Syria, pushing into areas held by Kurds that have fought alongside the United States and our allies against Daesh. Robert Gerber looks at what the World Cup has taught us about sportsmanship and statesmanship. Hidetoshi Azuma assesses the track record of Japan’s semiconductor policy in 2022. As always, we wrap with news you may have missed.
Unrest in China & the COVID Reopening
Dan Mahaffee
The world watched, stunned by the scenes coming out of China early in the week, as protesters took to the streets to protest the zero-COVID policies that have now clamped down China for almost three years. With protests in multiple major cities, including large ones in Shanghai, Beijing, and Guangzhou, we see protests on Chinese streets unified around the common cause of frustration with the onerous lockdowns imposed to control the pandemic. While this is hardly a threat to the Chinese Communist Party’s grip on power, it remains to be seen how the party responds to these grievances and the impact on the perceptions of doing business in China.
First let’s consider how we got here. What is considered the immediate cause of the protests was the outbreak of a fire that killed 10 in an apartment building in Xinjiang. As video circulated on social media of people screaming for help while firefighters impotently blocked the blaze due to barriers and parked vehicles blocking roadways due to pandemic restriction policies, this scene became emblematic of how the Chinese people are suffering under pandemic restrictions that are applied without nuance or even as some would say without common sense. This also comes as there have been fits and starts surrounding discussion of reopening China, as well as frustrations among the Chinese when they see the world gathered in Qatar for the World Cup — unmasked and crowded together.
However, in the longer run though the root of this problem comes from the policies of the party themselves and the nationalism that has guided China’s COVID response. China has not accepted Western mRNA vaccine technology, and there are doubts about the efficacy of the domestically produced vaccines especially with the omicron variant. Many elderly Chinese also remain not fully boosted, and skeptical of modern medicines and other interventions. Similarly, on the nationalistic front, China has not accepted any of the antiviral medications that have many in the West now take upon the onset of COVID symptoms.
Understandably Chinese leaders are concerned about the impact of fully reopening, as they have legitimate concerns about the capacity of their health care system to deal with these spread of omicron COVID. Stories of Chinese buying ventilators on the private market to care for their own parents illustrates both the paucity of the Chinese health care system, while echoing the stories that we saw in the West when first dealing with the pandemic. The example of Hong Kong, where its healthcare system practically collapsed upon reopening, serves as a warning in the eyes of Chinese leaders. Furthermore, we have to realize that opposition to the zero COVID policy is not universal. In some other Chinese cities, just before this unrest began, there were concerns among citizens that their cities were going to be used as “experimental zones” that could be studied for the rest of China’s reopening.
Moving forward the immediate question is how the Party responds to this unrest. We have already seen heavily armed police, armored vehicles, and other equipment moved into cities, while police have also boarded-up or fenced-off areas where demonstrations have taken place. The Chinese internal security apparatus, with domestic digital surveillance, internal censorship, and widespread surveillance will be deployed against those who seek to ringlead or foster protest movements. Chinese citizens are getting better at the cat-and-mouse tactics of online protest and organizing, but the state still has significant capabilities in terms of tracking, social monitoring, facial recognition, etc. that can be used to track and confront protestors. That Beijing has enacted its emergency plans for internet censorship and crackdown is no surprise, and likely just the start. Furthermore, it will be difficult to move the protests from the online space to the streets. It’s one thing to use cute puns to evade censorship, another to face water cannons, armed paramilitary police, and APCs.
Still, what complicated Chinese officials’ response the previous weekend was that the demonstrations were largely leaderless and therefore almost organic in nature — many popping up on college campuses. Reflecting this, Chinese officials are sending students home from college campuses to prevent further spontaneous demonstrations there. The question for Xi Jinping — given that the zero-COVID policy is one of his political cornerstones — is whether to further crack down on protests and exacerbate the disruption, or relax the zero-COVID policies without appearing to give in to protesters. The death of Jiang Zemin further complicates the febrile situation, as memories of him harken back to a more open, entrepreneurial China.
We see Xi remaining “behind the curtain” as it were, while China now appears to be gradually reopening. We see other officials and local leaders responding to many of the protests and managing the reopening. As COVID cases in China rise, the scenario of an overwhelmed health care system has not gone away. Xi appears to be following the authoritarian handbook for assigning blame and claiming victory. If the reopening, vaccine campaign, and relaxed policies work, eventually the party can retroactively state this was the plan and that any of the early excesses of the zero COVID strategy at this point were due to overzealous local officials. If the virus spreads and the system is overwhelmed, then it can be blamed on the protestors and officials who were too lax compared to Xi’s original, stringent policy.
While we look on with concern in the West, if we could not do much to protect the protesters of Hong Kong, there is very little we can do to help the protesters in China. However, what this can do is make us rethink our reliance on China and the societal and political stability that we once took for granted when establishing supply chains and factories there. If there was one company that exemplified the creation of a Chinese supply chain and network, it was Apple. Now as we see rioting and disruption at Apple plants run by their contractor Foxconn, we also see delays in their flagship iPhone 14 right before the holiday season. CEOs once lauded for building Chinese supply chains now must be asking themselves what kind of vulnerabilities they have introduced to their business.
As we have repeatedly said during our analysis of great power competition and the geotech competition, it is very much a contest of “operating systems”. While the Chinese system was once upheld as a model of pandemic control, it failed to adapt to innovations in health care and remained a prisoner of the virus. The inflexibility of an authoritarian regime means that the stress of these policies has been felt by a people who have no choice but to stand in the street and cry out for their rights. For the past three decades, they were guaranteed economic prosperity in exchange for suborning their political demands or ideals. The question now is whether that deal has been irreparably broken. While the West’s pandemic response was not perfect, and many will point to the higher death toll than China, we are now demonstrating a greater resilience and adaptability to this crisis than Beijing is showing.
NATO must decide how much it will tolerate from Turkey
Ethan Brown
NATO faces a difficult and long-term challenge as Ukraine’s conflict seems to be waning, possibly even vectoring towards a final, conclusive outcome. At the very least, the Winter snows and frigid cold will potentially offer a lull in the violence. But the long-term concerns for NATO extend beyond Ukraine and Russia. At the further reaches of the Alliance’s concerns, Turkey appears to be ready to make good on its long-standing promise to invade Syria, with the purpose of creating a twenty-mile exclusion zone meant to deter (read: continue the violent repression) the Kurds.
“All the preparations are complete. It’s now a political decision” an anonymous Turkish official told Reuters earlier this week, but this has been an objective for Turkish President Reccep Tayyip Erdogan for some time. And not coincidentally, his party and administration is staring down elections in the coming calendar year, so the timing of this incursion into Syria is neither surprising, nor encouraging that a powerful NATO member is, once again, putting it’s domestic security agendas ahead of implications to the region and its obligations to the Alliance.
The Kurdish people, for those who have forgotten, remain on the front lines and contending with the still-present threat from the Islamic State. U.S. forces remain in Eastern Syria for that exact reason as well, and even Russia still has military power there intended to bolster the Bashar Al-Assad regime, who shares in Turkey’s repression of the Kurds. The Rojava (as the Kurds call themselves and their indigenous republic in the region) have been forced to turn to any aid once American forces largely extracted from Syria around 2019, but remain directly engaged with Daesh all along the Euphrates River Valley. In today’s parlance, that has meant Russia has been supporting the Kurds in their fight. Thus, Ankara’s decision to engage the Kurds directly with overt military force (not including the persistent airstrikes and artillery which have been an enduring theme for years), while violating Syria’s sovereign border, foments a potential crisis which could drag NATO into the very conflict with Russia it has been balancing against while supporting Kyiv.
These are the risks that come with Turkey’s incursion into sovereign Syrian territory: a NATO member engaging in open hostility with a Russian beneficiary, which is scarcely a different tune than a NATO member launching any form of attack or aggression against Russian forces in Ukraine. The result could well be the same: reaction from Russia that promotes an escalation of violence which ultimately means a confrontation between Russia and the West. Turkey, of course, is in a curious fulcrum between Moscow and Brussels, where it belongs to NATO, but has spent years fostering closer ties with Russia. Just this year alone, Ankara engaged in trilateral discussions between Tehran and Moscow, while efforting a brokerage of grain shipments through the Black Sea amidst the Ukraine-Russia conflict. Going further back, Turkey ousted itself from participation in the F-35 program on account of its acquisition of the Russian S-400 Surface to Air missile system, ostensibly to give it an air defense advantage over its Greek rivals in the Mediterranean. In short, Ankara’s foreign policy is all over the map, with one key narrative/trend emerging: its exclusive concerns are securing its own security and regional influence over the broader security initiatives for which it is beholden under treatise with its NATO and EU obligations.
A few weeks ago in this space I decried Turkey’s antagonism with its ongoing aggression against another NATO member (Greece) in the Aegean. This behavior came from a NATO member (Turkey) who resisted the accession of Finland and Sweden to NATO membership until it had called for the extradition of Kurdish individuals who had requested asylum in those Nordic nations. This action isn’t extraordinary rendition by acute definition, but what faith does any actor have that Turkey would try those individuals whom it has labeled terrorists by virtue of their ethnic heritage?
The behavior of Turkey, and its authoritarian leader Erdogan, as I’ve stated in the recent past, undermines NATO legitimacy as the Alliance grapples with another authoritarian leader in Moscow. The Alliance continues to contend with threats to the rules based order from many other vectors, making these asides and wayward military confrontations by Erdogan’s regime incidents that only embolden those same adversaries. NATO is in a unique position to be a little more bold with how it addresses this dynamic with Ankara, with Russia on a back-foot and continuing global consternation aimed at Vladimir Putin.
But condemning Turkey’s actions comes with risk as well. If it’s a waiting game to see how next year’s Turkish elections play out, what faith does the West have in free and fair elections when the established party rule is willing to ruthlessly repress opposition? The Alliance must consider at least condemning these actions, far more than merely asking Erdogan to turn aside from adventurism. At a time when NATO is grappling with its leading role in the future of European Security, Ankara has to be turned from continuing such destabilizing activities that cause security gambles for the Alliance and Europe.
Sportsmanship & Statesmanship at the World Cup
Robert Gerber
With the backdrop of criticism over Qatar’s hosting of the 2022 FIFA World Cup — now at its half way point — we have seen some extraordinary displays of statesmanship, sportsmanship, and courage from players and teams. One standout player is 24-year-old U.S. Captain Tyler Adams. Adams was widely praised not only for his midfield performance and leadership of the American team, but also for the way he answered a provocative question from an Iranian reporter, who asked Adams if it was “ok to be representing a country that has so much discrimination…” In a heartfelt yet diplomatic response, Adams shared his experience assimilating across cultures and underscored the importance of education to foster understanding. At the final whistle of the USA-Iran match, American players embraced and consoled their opponents “both on the pitch and with support online, following the victory that sent the U.S. to the Round of 16 while sending the Iranians back home.” (Yahoo Sports) Although Iran’s team didn’t bring home a trophy, they gave a gift to the people of Iran when the team’s captain Ehsan Hajsani publicly expressed condolences for protestors who have died in Iran. He added, “We have to accept that the conditions in our country are not right and our people are not happy.” The team also refused to sing the national anthem at the first match against Wales. It goes without saying that these acts showed extraordinary courage when anti-government protestors in Iran risk imprisonment, torture, or death.
In addition to drawing attention to the human rights situation in Iran, the World Cup has put a spotlight on migrant workers, women, and LGBTQ rights in Qatar and the wider Gulf region. Qatar made some improvements to its restrictive labor laws in the face of international condemnation of its mistreatment of foreign workers as it rushed to build stadiums for the World Cup. U.S. Secretary of State Blinken included labor and human rights among the issues he raised at the recent U.S.-Qatar strategic dialogue (according to the State Department) and U.S. Ambassador Timmy Davis has been particularly outspoken on ending violence against women. Of course, American and European officials are forced to calibrate their pressure on Doha because the West depends on Qatar: the small nation hosts a U.S. military base in a strategically important region; it provided temporary shelter for Afghans who fled the country after the Taliban takeover; and it provides a vital source of non-Russian natural gas to Europe.
Shifting back to sportsmanship: the opposite of this is Qatar’s cheating to get the World Cup. It is widely documented that Qatari representatives bribed soccer officials to get the votes to host the 2022 World Cup. Cheating obviously violates the spirit of sport itself as well as the precepts of FIFA’s own Fair Play Award, which states that “fair play is football in its purest form.” Even corrupt former FIFA autocrat Sepp Blatter admitted this year that Qatar never should have received the World Cup. But Qatar was allowed to cheat because the system let them. Sure, a dozen FIFA officials served jail time, and yet FIFA stands intact today and there was no re-vote for 2022. We’ve seen in 2022 how soccer can bring people together and can be an inspiring force. And therefore, the sport doesn’t deserve an international governing body as horrible as FIFA. It is time to revisit the idea of abolishing FIFA, which Forbes and The Guardian called for back in 2015. What the world needs, and the fans deserve, is an entirely new international football coordination body. This would start with assembling a convention of the world’s football associations, with supporters duly represented, to draft a new charter for a new organization anchored in accountability and transparency — and sportsmanship.
Japan’s Troubled Semiconductor Gambit
Hidetoshi Azuma
The year of 2022 has showcased Japan’s opening maneuvers in the simmering global chip war driven by the US-China geotechnological competition. So far, Tokyo appears to have largely aligned its semiconductor policy with Washington’s as both countries increasingly accelerate their targeted decoupling from China. Indeed, even before the historic enactment of the CHIPS and Science Act (CHIPS Act) in the US in August, a series of sweeping legislative reforms had already occurred in Japan to support Tokyo’s emerging semiconductor policy, culminating in the enactment of the Economic Security Promotion Law in May. The new law was several years in the making led by Japan’s foremost political leaders and aims to provide Tokyo with a legal mandate for boosting the country’s economic security, particularly its semiconductor supply chains which almost exclusively depend on Taiwan and thus remain vulnerable to geopolitical upheavals in the region. The upshot under the veneer of Tokyo’s enthusiasm is the drastic expansion of government power towering over Japan’s domestic semiconductor industry with lavish state subsidies injected into one company after another. While such a statist trajectory may be conducive to a short-term remedy for today’s problems, it requires prudence in guiding its long-term evolution lest it repeat the anachronism of the proverbial Japan Inc.’s state capitalism of the bygone era.
The imperative of targeted decoupling from China on the semiconductor front had gathered political momentum long before Japanese prime minister Fumio Kishida launched his signature economic security policy in October 2021. Beginning in 2020, Japan’s ruling party, the Liberal Democratic Party (LDP), began organizing various study groups on economic security and calling for the strengthening of Japan’s domestic semiconductor industry in response to the simmering US-China geotechnological competition and the various supply chain issues caused by the coronavirus pandemic. Such efforts culminated in the launch of the Semiconductor Caucus led by some of the most powerful leaders of the LDP, including former prime minister Taro Aso, former prime minister Shinzo Abe, and former Minister of Economy, Trade, and Industry Akira Amari. The trio, commonly known as the “3As,” laid the foundation for Kishida’s economic policy by even influencing his election as the prime minister. Following the formation of the Semiconductor Caucus, the METI unveiled Tokyo’s Semiconductor Strategy recognizing semiconductors as “a strategic base technology” vital to Japan’s national security. Indeed, Amari himself emerged as the de facto spokesperson for Tokyo’s renewed semiconductor policy and often described its importance by ominously declaring: “Who controls semiconductors controls the world.”
The METI’s influence over Tokyo’s semiconductor policy continued to expand well into 2022 and even unveiled its strategy for the revival of Japan’s domestic semiconductor industry in January. Curiously, the latest strategy emerged as a part of a grand national connectivity project called “Building a Digital Japan” modeled after former prime minister Kakuei Tanaka’s original 1972 “Building a New Japan” agenda. As in the case of Tanaka’s agenda, the METI’s new project inevitably revolves around the Japanese government as the lynchpin of the country’s domestic technology sector, including its semiconductor industry. Indeed, the METI even proposed a three-step strategic direction for the revival of Japan’s semiconductor industry to be followed by the country’s private sector: 1) Step 1: the urgent consolidation of the semiconductor manufacturing base for the Internet of Things (IoTs); 2) Step 2: the consolidation of the next-generation semiconductor technological base led by US-Japan cooperation; and 3) Step 3: the consolidation of the future technological base through global partnerships. The first step involves inviting foreign semiconductor fabs to Japan to secure manufacturing bases for the production of logic and memory chips. The second step aims to boost US-Japan chip cooperation, including the invitation of US companies, such as IBM, to Tokyo’s “Beyond 2nm Process Development” research and development (R&D) agenda. The final step envisions a R&D program focused on the next-generation optical fusion technology.
These policy developments inside the smoke-filled rooms in Nagatacho and Kasumigaseki ultimately manifested themselves in the form of the Economic Security Promotion Law in May 2022. The law putatively seeks to enhance Tokyo’s economic security policy founded upon the following four pillars: 1) bolstering supply chains of critical resources; 2) ensuring the security and reliability of critical infrastructures; 3) public-private cooperation on important advanced technologies; and 4) classification of patent applications. The law provides the Japanese government with the power to intervene in the economy where its perceived vulnerabilities are deemed to have national security significance. While the introduction of the law is undoubtedly an important step, it is essentially a stop-gap measure aiming to selectively remedy specific perceived economic security imperatives. In other words, the law is inherently susceptible to potential abuses for certain agendas unless guided by a coherent strategic framework. Indeed, Tokyo has yet to reveal its economic security strategy, and absent such a strategic framework, the swift enactment of the law only casts doubt on the real motive behind the legal reform. In particular, the limited scope of the law, especially its near-exclusive focus on supply chain security, is largely a reflection of Tokyo’s priority focus on the revival of Japan’s domestic semiconductor industry putatively for the objective of accelerating targeted decoupling from China.
While Tokyo’s recognition of the significance of semiconductors and subsequent politico-legal developments initially appear to enhance Japan’s position in the US-China geotechnological competition, the prevailing thinking in Tokyo favoring government subsidies as a panacea remains highly questionable. Indeed, one of the key outcomes of the above political developments has been a series of calls for large-scale government subsidies for Japan’s semiconductor industry. For example, Amari called for a 10 trillion yen (approximately 72 billion US dollars as of December 2022) government funding for Japan’s semiconductor industry during the 2020s. According to Amari’s calculation, Japan’s potential semiconductor funding would even exceed the 52 billion US dollars earmarked by the CHIPS Act in the US. Similar calls followed, culminating in Tokyo’s 47 billion yen (approximately 3 billion US dollars as of December 2022) funding planned in December 2021 and approved in June 2022 for the joint plant in Kumamoto known as Japan Advanced Semiconductor Manufacturing (JASM). Taiwan Semiconductor Manufacturing Company (TSMC) and Sony will run the plant underwritten by the METI. The expected joint venture is widely touted as a boost for Japan’s semiconductor industry as well as the local economy in Kumamoto. Yet, the plant itself will produce obsolete chips ranging from 12 to 28 nanometers which are only good for use in automobiles and electronics and will not even help Japan with regaining its former status as the world’s leading provider of cutting-edge chip technologies. Economic security reigned as the elephant in the room in justifying such a dubious investment. The TSMC-Sony joint plant in Kumamoto thus became a milestone test case for the METI’s state-driven economic security agenda.
While Tokyo’s recognition of the significance of semiconductors and subsequent political developments initially appear to enhance Japan’s position in the US-China geotechnological competition, the prevailing thinking favoring government subsidies as a panacea remains highly questionable. Indeed, one of the key outcomes of the above political developments has been a series of calls for large-scale government subsidies for Japan’s semiconductor industry. For example, Amari called for a 10 trillion yen (approximately 72 billion US dollars as of November 2022) government funding for Japan’s semiconductor industry during the 2020s. According to Amari’s calculation, Japan’s potential semiconductor funding would even exceed the 52 billion US dollars earmarked by the CHIPS Act in the US. Similar calls followed, culminating in Tokyo’s 47 billion yen (approximately 3 billion US dollars as of November 2022) funding planned in December 2021 and approved in June 2022 for the joint plant in Kumamoto known as Japan Advanced Semiconductor Manufacturing (JASM). Taiwan Semiconductor Manufacturing Company (TSMC) and Sony will run the plant underwritten by the METI. The expected joint venture is widely touted as a boost for Japan’s semiconductor industry as well as the local economy in Kumamoto. Yet, the plant itself will produce obsolete chips ranging from 12 to 28 nanometers which are only good for use in automobiles and electronics and will not even help Japan with regaining its former status as the world’s leading provider of cutting-edge chip technologies. Economic security reigned as the elephant in the room in justifying such a dubious investment. The METI chief Koichi Hagiuda even attributed the post-Cold War decline of Japan’s domestic semiconductor industry to the termination of Tokyo’s economic policy of paternalistic guidance of the private sector. The TSMC-Sony joint plant in Kumamoto thus became a milestone test case for the METI’s state-driven economic security agenda.
Having laid the foundation for reviving Japan’s domestic semiconductor industry in Kumamoto, Tokyo unveiled another state-driven venture called Rapidus in November 2022. Rapidus is a joint venture funded by some of Japan’s top companies, such as Sony, SoftBank, and Toyota, and underwritten by the METI with the stated objective of producing cutting-edge logic chips in Japan. Japan currently lacks the manufacturing capabilities needed to produce logic chips, which are used in computers and smartphones. In fact, Amari again emerged to spur Tokyo’s pursuit of Japanese-made logic chips and called for the ultimate attainment of the domestic manufacturing capabilities for 2-nanometer chips in the future in line with the METI’s January 2021 strategy for the revival of Japan’s domestic chip industry. 2-nanometer chips are currently the most advanced semiconductor technology possessed by the American company, IBM. Realizing Amari’s ambitious vision would inevitably require close cooperation with the US, but it alone would not suffice due to the various issues inherent in the METI’s statist agenda.
Indeed, the METI appears to disregard the reality of Japan’s domestic semiconductor industry in leading the country’s path to once again becoming one of the world’s leading chip manufacturers. After its downfall beginning in the late 1980s, Japan’s domestic semiconductor industry became hollowed out over time, losing many of the assets needed to sustain it. Among such assets is intellectual capital largely lost to the inevitable brain drain, which China ironically exploited for growing its own domestic semiconductor industry. Another issue is one of management. Japan’s semiconductor dominance until the 1980s was largely a product of the symbiotic relationship between the government and the private sector often referred to as Japan Inc. This unique relationship removed the need for fretting over investment risks thanks to the almost indefinite flow of government subsidies. By contrast, the private sector became increasingly risk-averse from the 1990s and onward and essentially committed industry suicide due to the absence of government support. In other words, the managerial experience gained from the heydays of Japanese semiconductors in the 20th century is largely forgotten and may not even be applicable to today’s needs in a radically novel environment. Finally, the 70 billion yen (approximately 506 million US dollars as of November 2022) earmarked for Rapidus is hardly sufficient for attaining the manufacturing capabilities for advanced logic chips as they would usually require billions of dollars as in the US and Europe. In short, Rapidus appears to create more problems than a solution, casting doubt on the viability of the METI-led ventures.
At the most fundamental level, one of the unanswered questions is one of demand. Indeed, domestic supplies of goods would eventually require buyers to maintain the supply-and-demand equilibrium. As an export-oriented economy, Japan previously fulfilled this obvious economic imperative by exporting to the rest of the world during the Cold War thanks to the absence of peer competitors and later moved most of its production bases to China, leading to today’s economic security issues. In today’s radically different geotechnological environment, exporting to China would be out of the question, and the demand must be secured either at home or abroad. The irony is that Japan’s declining manufacturing industry would have virtually no appetite for Japanese-made logic chips while accessing foreign markets would inevitably involve intense competitions with the world’s leading chip producers, such as TSMC. Moreover, secure delivery of chips to buyers at home and abroad would require considerable foreign and counterintelligence capabilities in the ubiquitous presence of Beijing’s shell companies posing as innocuous on the surface. Intelligence is another lost dimension of statecraft in the rebirth of postwar Japan, and there exist systemic obstacles to even reforming the current intelligence capabilities absent a unified security clearance system. Despite these salient issues, Tokyo appears determined to emulate Japan Inc. of the bygone era and continues to pump billions of dollars of government subsidies as if they were a panacea for Japan’s economic security imperatives.
These emerging developments on Japan’s semiconductor front pose fundamental questions about the future trajectory of Tokyo’s economic security policy. The cardinal issue at stake is the distorted understanding of economic security. Curiously, Tokyo’s economic security debate devolved over time to focus almost exclusively on semiconductors. This was by no means independent of the personal agendas of certain political leaders in Tokyo. For example, Amari’s ubiquitous influence on Tokyo’s economic security policy unmistakably shaped the current policy trajectory given his close ties to the METI and the private sector apart from his clout within the LDP. The present trajectory is largely a reflection of the METI’s desire to resurrect its former glory from the days its predecessor, the Ministry of International Trade and Industry (MITI) earned the global appellation, “Mighty MITI,” as a result of its perceived role in realizing postwar Japan’s economic miracle. Yet, the MITI’s role was in fact secondary as the US underwrote Japan’s economic miracle by removing the need for defense and allowing Tokyo to focus exclusively on economy. Moreover, the political stability enjoyed during the Cold War is no longer the case today, especially as the issue of the Unification Church continues to threaten the LDP’s power. The growing political instability in Tokyo these days could easily lead to the demise of the key patrons of economic security, such as Amari, casting doubt on the future of the policy absent paternalistic guidance. Emulating the past success case based on an erroneous understanding of history would be a recipe for disaster. The die is cast, and the first sacrifice of Japan’s semiconductor gambit could ironically be its own private sector needed to drive Tokyo’s economic policy forward.
News You May Have Missed
South African President Facing Impeachment Over Graft & Corruption Allegations
South African President Cyril Rhamaposa is facing a push for impeachment following an independent panel’s findings of corruption in an investigation the press there is now calling “Farmgate.” The allegations revolve around a 2020 theft of $4 million from Rhamaposa’s farm, which Rhamaposa covered up lest he have to account for the provenance of the stolen cash. It is alleged that he instead worked with authorities in neighboring Namibia to arrest, torture, and bribe the suspected theives for their continued silence.
U.S. and Indian Armies Drill Near Disputed Border with China
Continuing a series of exercises that have alternated between the United States and India, soldiers of the U.S. 2nd Brigade, 11th Airborne Division and the Indian Assam regiment drilled near Auli, approximately 60 miles from the disputed Line of Actual control that marks the boundary between India and China. Exercising in the mountainous conditions after last year’s exercise in Alaska, the American and Indian participants practiced unarmed combat techniques, helicopter assaults, counter-drone techniques, and counter-explosive methods. India rejected Chinese protests about the exercises, as satellite imagery continues to indicate continued Chinese military construction near the border.
The views of authors are their own and not that of CSPC.
