During her just-concluded visit to Taiwan, ALL OF US House of Associates Speaker Nancy Pelosi vowed that The united states would not abandon the particular island, doubling down on support for the democratically elected government in Taipei, despite heightened threats of military action by The far east.
Pelosi made her remarks on Wednesday in a joint press meeting with Taiwanese Leader Tsai Ing-wen.
Beijing, which relation Taiwan as part of its territory, was enraged. After her arrival, China’s military introduced joint air and sea drills close to the island, including test launches of regular missiles in the sea east of Taiwan.
The US ambassador to China was also summoned by Beijing to rebuke him over Pelosi’s “egregious” trip, state media reported. Vice-Foreign Minister Xie Feng voiced “strong protests” over the visit.
Taiwan continues to be an international diplomatic hotspot for decades. But the ruling Communist Party of China (CPC) seems to be taking an increasingly hardline stance, as we have observed with the Pelosi debacle.
So why is definitely Beijing becoming more intense in its claims associated with sovereignty over Taiwan?
Is it because of the forthcoming CPC National Congress, which will most probably hand President Xi Jinping a third expression? Maybe.
However , I believe it’s very likely to be about technologies.
It’s difficult to overstate the importance of Taiwan to the global tech surroundings – and, of course , nowadays whoever has got the upper hand in tech has economic (and therefore political and military) dominance.
Taiwan dominates the microchip foundry marketplace, or the outsourcing of semiconductor manufacturing. Its contract manufacturers together accounted for more than 60 per cent of total worldwide foundry revenue a year ago, according to data simply by research firm TrendForce.
Much of that dominance can be attributed to Taiwan Semiconductor Production Co (TSMC), the world’s largest foundry, which counts major technology firms such as Apple, Qualcomm plus Nvidia among its clients.
In our tech-driven era of smartphones and other products, the world cannot function as it currently really does without semiconductors.
Beijing is becoming worried that Washington wants to cut it off from Taiwan and its outsized role in chipmaking, thereby preventing China and taiwan from increasing its global influence.
Although Nancy Pelosi’s visit offers added fuel to these fears, it is not the trip itself, or maybe the House Speaker herself, that is the concern with regard to Beijing, in my opinion – it’s Taiwan’s unparalleled semiconductor-making capabilities where China so heavily relies.
Against this backdrop, the US government should temper China’s worries that its economy could collapse because of future trade in microchips and, therefore , reduce the probability of international trade issues and/or war.
Nigel Green is the founder and CEO of deVere Group. Stick to him on Tweets @nigeljgreen.