Indian immigration is great for America – Asia Times

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The innovative MAGA coalition has actually had its first inner debate, and it’s over H-1b permits. It started when Trump&nbsp, appointed&nbsp, Sriram Krishnan, a previous Twitter executor and Andreessen Horowitz lover, to be a top AI plan consultant.

Krishnan has been a outspoken supporter of qualified immigration. This angered some right-wing activists, including an anti-immigration group calling itself” US Tech Workers“, as also as&nbsp, Laura Loomer, &nbsp, Charles Haywood, and other&nbsp, MAGA ranters:

Different numbers on the Tech Right, including&nbsp, Elon Musk, &nbsp, David Sacks, and&nbsp, Joe Lonsdale, gamely stood up for Krishnan and for the thought of high-skilled multiculturalism in general:

A great fight ensued&nbsp, on X, which has essentially become the in-house chat room for the National right. Far-right trolls ( including the pathetic but persistent “groypers” ) jumped in to attack Indians as a group, and Indians jumped in to defend themselves.

However, more philosophical debate shifted to the H-1b card, which — though not the same as the green card concern that Sriram was talking about — has become a focus point of right-wing pushback against high-skilled immigration.

The disputes over high-skilled immigration, American immigration especially, and applications like H-1b are closely related — extremely so, in fact. &nbsp, Most H-1b workers are Hindu, and Indians&nbsp, render up a plurality&nbsp, of foreign-born STEM employees. American workers have become far more essential than Chinese employees to America’s proper high-tech industries:

Source: EIG

And although Indians are now&nbsp, the second-biggest group of foreign-born residents &nbsp, in America ( behind Mexicans, of course ), they are also the most successful by many measures — their&nbsp, median household income&nbsp, far exceeds that of any other group. 1

And Indian Americans are now&nbsp, influential&nbsp, also beyond STEM and the technical world— for instance, in elections. Vivek Ramaswamy is assisting in the new Department of Government Performance, and Ash Patel has been chosen to lead the FBI.

Yet Vice President JD Vance’s woman is Indian! Although Indian Americans also lean a little toward the Democrats on average, they ‘re&nbsp, becoming more properly split&nbsp, between the parties — there are &nbsp, a large number of Indians on the right&nbsp, today, despite the presence of another party of the right that doesn’t specifically like Indians.

The debate over skilled immigration is therefore only one more discussion about the rapidly expanding role of Indian and Indian-Americans in the US elite. But first, let’s talk about skilled immigration on its own merits.

H-1b workers are beneficial for American tech workers in general and for American workers in particular.

First, let’s point out that skilled immigration overall is very important and good for America. America will lose if you force the world’s best talent to play for the other side, according to Elon Musk. Here are two Noahpinion posts ( here and here ) that lay out the case pretty exhaustively.

In fact, the American people pretty strongly agree. A recent&nbsp, Pew poll&nbsp, found that an overwhelming majority of Americans place a priority on letting in highly skilled workers:

Other&nbsp, polls&nbsp, find&nbsp, the&nbsp, same thing.

But H-1b is a little different. Technically, the H-1b is a “nonimmigrant” visa — you can only work in the U. S. for six years before returning to your home country. In practice, many H-1b workers apply for employment-based green cards while they’re here, which is one reason why people casually refer to H-1b as “immigration”, but it’s really a guest worker program.

The question is whether those visiting employees harm American tech workers.

You would be led to believe otherwise by the lobby group” US Tech Workers.” It is an affiliate of Kevin Lynn’s Institute for Sound Public Policy, a political pressure group, and does not represent any organization of actual US tech workers. &nbsp,

Lynn has about 2.5 years of experience working in the tech sector, and he hasn’t shown any signs of ever having done the kind of work an H-1b worker might be hired to do.

Even his cofounders have a limited amount of experience in the tech sector. So it’s just a nativist group that claims to represent a class of workers that it doesn’t actually represent, on the premise that American workers are harmed by the presence of foreign workers.

But does that theory still hold any water? The idea behind the influx of foreign labor is that it will help to boost the supply of tech workers. When supply goes up, price goes down — that’s Econ 101.

Now, I often remind readers that immigration&nbsp, as a whole&nbsp, doesn’t seem to decrease&nbsp, native-born American wages. And that’s true — immigrants don’t just work, they also buy stuff, and that increase in demand roughly balances out the increase in supply. But in a specific sector, immigration definitely&nbsp, could&nbsp, decrease wages for the native-born.

If you attracted a lot of STEM workers, they could lower the cost of their labor while their demand for local goods and services raises wages in other sectors. In this case, American labor&nbsp, as a whole&nbsp, wouldn’t be affected, but American STEM workers would get the short end of the stick.

Interestingly, thought, this doesn’t seem to happen in practice! Because the H-1b program uses a lottery system, we can create a very effective randomized natural experiment that can demonstrate how the H-1b program affects the fortunes of businesses by comparing the companies whose applicants win with those whose applicants lose.

On top of that, there have been occasional changes in the&nbsp, total&nbsp, number of H-1b visas, so we can also look at the results of those policy changes on companies that are more dependent or less dependent on H-1b workers.

Any way you slice it, it doesn’t look like H-1b workers hurt the native-born, even when they seem to be in direct competition:

    Mayda et al. ( 2017 ) &nbsp, found that when national H-1b numbers were restricted, employment for similar native-born workers didn’t rise.

  • Mahajan et al. ( 2024 ) &nbsp, found that companies who won the H-1b lottery didn’t hire fewer “H-1b-like” native-born workers. They come to the conclusion that “lottery wins enable firms to scale up without causing significant substitution for native workers.”
  • Kerr et al. ( 2015 ) &nbsp, find that when companies successfully hire more H-1b workers, they employ more skilled native-born workers than before.
  • Peri, Shih, and Sparber ( 2015 ) &nbsp, look at the city level instead of the company level, and found that “increases in STEM workers are associated with significant wage gains for college-educated natives”. This should ease worries about hiring H-1b workers and outperforming those who employ mostly native-born Americans.

And so on. It is possible to&nbsp, find papers that conclude&nbsp, that H-1b workers displace similar native workers, but they’re few and far between. 2

How are these results possible? One possibility, put forward by Mayda et al., is that H-1b workers and native-born workers just do very different jobs, so there’s a “low degree of substitutability”. Similar to the claim that immigrants take jobs that native-born workers can’t or won’t do, this is also true.

But I think there’s another force at work here: &nbsp, industrial clustering. It’s a well-known fact that companies in knowledge industries— tech, finance, entertainment, biotech — tend to cluster together in cities. Why? When you have an area with a lot of high-skilled labor, high-tech companies will find it easier to hire everyone they need in that area, so they’ll pour investment into that location.

Silicon Valley is still a leader in the IT sector despite the Bay Area’s prohibitive costs and dysfunctional governance because it is where all engineers reside, so businesses want to invest there.

At the country level, the same is true. If America weren’t home to so many talented software engineers, for example, the tech industry would be much more reluctant to invest there. Because of their talent concentrations, companies move to San Francisco and Palo Alto, where it would be relatively easy to sell software from Bangalore or Hyderabad.

Thus, H-1b workers could actually be reinforcing America’s overall advantage as the place where high-tech companies want to invest. Naturally, this increased investment benefits native-born tech workers as well.

In fact, there is some evidence for this theory. &nbsp, Glennon ( 2023 ) &nbsp, shows that when companies are prevented from hiring H-1b workers, they start investing in other countries instead:

How do multinational firms respond when artificial constraints, namely policies restricting skilled immigration, are placed on their ability to hire scarce human capital? …]F ] irms respond to restrictions on H-1B immigration by increasing foreign affiliate employment…particularly in China, India, and Canada. The most impacted jobs were R&amp, D-intensive ones …]F ] or every visa rejection, ]multinational companies ] hire 0.4 employees abroad.

Similar studies conducted at the city level would be interesting to observe the effects of more H-1b residents residing in a particular area. However, this proof strongly suggests that H-1bs “hire them here or hire them there” effect. American tech workers won’t gain if investment dollars are spent abroad rather than staying in the US.

Also, &nbsp, Dimmock et al. ( 2018 ) &nbsp report that startups that successfully employ H-1b workers are much more likely to experience a successful exit. Startup failures pretty obviously don’t benefit native-born US tech workers.

And, of course, there are plenty of startups that&nbsp, wouldn’t even exist&nbsp, without founders who used H-1bs to get into the country, not to mention the&nbsp, beneficial discoveries&nbsp, that&nbsp, wouldn’t have been made&nbsp, ( or at least, not in America ) without H-1b researchers.

In other words, Elon is exactly right about this:

In fact, Elon should know — he worked in America&nbsp, on an H-1b visa in the 1990s.

( Side note: People should be less likely to accept the” Evil Elon” theory given that Elon has been so pugnaciously insistent here rather than rolling over for the MAGA base like some other tech folks did. Calling for more skilled immigration, even in the face of right-wing rage, is a very pro-American move. )

Of course, none of this means that the H-1b program is perfect. In fact, there are &nbsp, at least two reforms that basically everyone realizes would be good. The first is to make H-1b visas transfer more quickly, so that foreigners can move from job to job more quickly without losing their visas. However, it’s probably not nearly as severe as some people believe. &nbsp,

Mithas and Lucas ( 2010 ) &nbsp, find that once you control for observable determinants of skills, H-1b workers actually get paid&nbsp, more&nbsp, than similar American workers, not less. That means they’re generally not being forced to do the same job as a native-born worker for lower cost, as some allege.

Implementing a minimum wage for the H-1b is the second and more crucial reform. Right now, some of the available visas get snapped up by&nbsp, low-productivity service-outsourcing companies&nbsp, for low-level employees, instead of being used to hire very high-productivity engineers, managers, etc. That must end, and the only way to do this is to grant H-1bs to employees who will receive high salaries.

Of course, increasing the overall cap on H-1bs would also greatly help this issue. Somehow, I don’t believe the vehement critics of that H-1b program would want to do that.

Anyway, the overall point here is that the H-1b program is good on the economic merits — not just for US companies, but for their high-skilled employees as well. However, after reading the numerous days of the right-wing backlash against skilled immigration on social media, I’m not so sure whether the program’s merits or even the country’s economic fortunes are really what they are trying to say.

Sadly, tweets like this have been common:

As so often happens, I believe the conflict we’re having here is a fight between America’s cultural and racial identity, which some people find it difficult to discuss in terms of its economic impact.

The MAGA backlash against Indians is awful.

Over the past two days, I have seen a lot of tweets like this from right-wing X users:

Of course, as you can imagine, the comments from pseudonymous rightists were more vicious toward Indians.

The animosity toward Indian immigrants, in particular, is something I’ve seen with increasing frequency on the nativist right over the past few years. Here’s what University of Pennsylvania law professor Amy Wax&nbsp, said in 2022:

” Here’s the problem”, she said. They are taught that they are superior to everyone else because they are Brahmin elites, but on some level their nation is a” sore.” They now realize how far we have outgunned and outclassed them. … They feel anger. They feel envy. They feel shame. It results in ingratitude of the most abominable kind.”

And these bigoted attitudes could be spilling over somewhat into&nbsp, everyday society:

We discover that 31 % of Indian Americans think that discrimination against people of Indian descent is a major issue in the country, whereas 53 % think it’s just a minor issue. One in two Indian Americans reported being subjected to some form of discrimination over the previous 12 months, according to data from surveying respondents ‘ lived experiences with discrimination.

The rightists who denounce Indian Americans on social media believe that we must choose between an atomized society where cohesion is sacrificed on the altar of higher GDP and a cohesive nation with strong social ties bolstered by bonds of common heritage. They believe that by excluding people who aren’t of America’s noble founding stock, we can restore civic trust, stop people from “bowling alone”, and so on.

This is abject fantasy. Something like this might make sense in a country like Japan or Sweden, where there is a sense of homogeneity that has been established over the years and where large immigration waves are not. But the United States has been an immigration-fueled polyglot since its very founding.

No sooner had British Americans created the country than it was inundated by Irish Catholic immigrants, causing vast&nbsp, anti-Catholic backlashes&nbsp, and&nbsp, efforts at large-scale deportation. When tensions started to escalate in the late 19th century due to the large-scale arrival of Italians, Poles, Jews, and other East and South Europeans, these had barely subsided. Today’s anti-immigrant freakout is the third since the founding.

So if you decide to try to strip down America’s population to its founding stock, who will you include? Do the Italians have a place to stay? What about the Vietnamese refugees who arrived in Vietnam in the 1970s? Are the Irish part of America’s core population, or papist interlopers? What about Mexican Americans with Mexican ancestry in the 1930s? Where do you draw the distinction? What about a person who appears completely Asian but has an ancestor who navigated on the Mayflower?

When you peel back the layers of an onion, there is nothing left until you reach the center by looking for an ethnicity that represents the” true” or” core” American stock.

Any attempt to ethnically purify America will in reality just turn the country against itself; the debates over Indian immigration on X this week will serve as a model for our daily lives. Imagine spending the entire day wondering if the US government will declare your ethnicity to be peripheral to the American national project if you found dealing with awake people calling you a white supremacist at work in 2018 annoying.

Naturally, you would fight hard to ensure that your ethnicity made it into the circle the purifiers eventually created. Thus, daily life would be reduced to racial conflict.

Americans do not want this. &nbsp, Yes, a majority voted for Trump, but it was not because they thought he would racially purify the nation. In fact, his victory was driven pretty much entirely by&nbsp, defections of Latinos and Asians&nbsp, from the Democratic coalition. It’s doubtful that those swing voters believe Trump to be an ethnic cleansing agent.

And I predict, pretty confidently, that Trump&nbsp, won’t &nbsp, be an ethnic cleanser in his second term. He flirted slightly with the idea with&nbsp, his” Muslim ban” but ultimately backed off. There was, and is, simply no national appetite for converting America to an ethnostate. Just a few right-wing activists are posting their Indian coworkers’ social media accounts.

In the old days, when I was growing up, we used to simply call that sort of thing “racism”, and thus exile it from polite society. Behind that taboo were&nbsp, centuries of history&nbsp, of contentious nation-building and self-definition. We have seen that a polyglot nation can’t always consider who are the country’s true” sons of the soil” or becomes paralyzed by conflict.

Now, after the 2010s, “racist” is such an overused insult that it’s applied toward basically anything. Social media created a zone of opportunism where anonymous teenagers clawed for status by constantly&nbsp, finding new innocuous things&nbsp, to call “racist”, while progressive activists&nbsp, devalued the term&nbsp, by&nbsp, trying to apply it too broadly.

This wrongfully defied the authority of the word by emphasizing the kind of people who post messages on social media and claim that Indian doctors and CEOs are a bunch of third-world nutcases who will pollute the blood of our country. So yes, all the racist racism against Indians that is currently being poured out of right-wing circles is coming from a number of racist racists, but merely acknowledging the fact is no longer enough to stop it.

But at least some people on the new Tech Right are &nbsp, now realizing&nbsp, what kind of tiger — or perhaps, &nbsp, leopard&nbsp, — they’ve chosen to ride. For a reason, the 2016 Trump movement had a reputation for being full of racial-nationalist bigotry; it might have been exaggerated, but the New York Times newsroom staffers had created a progressive fantasy.

Now, if you’re a tech founder who backs Trump and spends the day online on X, your daily routine includes your so-called political allies calling for the deportation of your Indian friends, cofounders, and employees in large numbers.

Well, such is politics. Meanwhile, in the real world, Indian immigrants and their descendants are hard at work making America an even better place, and I would very much like them to continue.

Notes

1 In terms of per capita income, they are slightly behind the Taiwanese, who have smaller households.

2 It’s also not too hard to&nbsp, write down a theoretical model&nbsp, in which H-1b workers displace the native-born. However, these models only have the best of the assumptions that are made, and they don’t typically include things like clustering effects. In general, when you have theory vs. high-quality data in economics, go with the latter.

This&nbsp, article was first published on Noah Smith’s Noahpinion&nbsp, Substack and is republished with kind permission. Become a Noahopinion&nbsp, subscriber&nbsp, here.

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Hong Kong dollar peg at risk in Trump’s coming fight with China – Asia Times

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Under Donald Trump’s coming second administration, Hong Kong may likely play a significant role in the wider industry, security, and political conflict between the United States and China. If therefore, the Hong Kong currency’s clamp to the US franc had come under US fire.

Trump is expected to make a new policy statement regarding Hong Kong-related problems, from the city’s role in assisting Russia in obtaining dual-use Chinese goods and avoiding American restrictions to the detention of pro-democracy activists and politicians to the economic capital’s role in reported money laundering that is against US interests, according to some observers.

Before Trump emphatically won the US presidential election on November 5, the former senator vowed to free Jimmy Lai, a pro-democracy activist and media mogul, from jail. Lai, who stands accused of fomenting Hong Kong’s 2019-2020 turmoil, is obviously one of Beijing’s negotiations cards on the bargaining table between Chinese and US officials. &nbsp, &nbsp, &nbsp,

Six additional abroad Hong Kong activists were detained on Christmas Eve after their arrest warrants were issued by Hong Kong’s federal security police on the charge of inciting subversion, colluding with international forces, and getting worse. The police also imposed HK$ 1 million ( US$ 128, 425 ) bounties on each of them. &nbsp,

Tony Chung and Chloe Cheung, two young activists, social critics, Victor Ho, a former city councillor, Carmen Lau, and former comedian and performer Joseph Tay are among the six. Ho and Tay are in Canada, and Tay is in the UK.

The six, according to Hong Kong’s Security Secretary Chris Tang, have allegedly violated international law by speaking out, posting on social media, and influencing foreign governments to impose sanctions on Hong Kong authorities and courts.

As of December 25, 19 people have been arrested on suspicion of violating federal safety in Hong Kong.

The Hong Kong government’s “relentless achievement of pro-democracy protesters outside its borders is a overt excess that ignores global standards,” according to Chris Patten, the previous government of Hong Kong and a supporter of United Kingdom-based Hong Kong Watch.

He demanded that the governments of the UK, the US, and Canada “agissent quickly and collectively to protect these campaigners from international persecution, ensuring their protection, and standing strong against Beijing’s attempts to undermine the very political values we hold lovely.”

hub of financial violence

The new arrest warrants does encourage hawkish American politicians to call for more harsh methods, such as the removal of some Hong Kong-based lenders from the SWIFT financial exchange program, which, if implemented, could lead to a de-pegging of the Hong Kong dollars and US buck. &nbsp,

In a letter to US Treasury Secretary Janet Yellen in late November, John Moolenaar, president of the US House Select Committee on the Chinese Communist Party (CCP), expressed the agency’s “deep problem” with regard to Hong Kong’s reported “increasing function as a financial hub for cash laundering, sanctions evasion, and other illegal financial activities.

According to him,” Hong Kong has shifted from a trusted global financial center to a crucial player in the deepening authoritarian axis of the People’s Republic of China ( PRC ), Iran, Russia, and North Korea,” following the National Security Law of 2020, which subjected the country to the CCP’s rule. &nbsp,

” We must now question whether longstanding US policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate”.

Moolenaar claimed that the US Treasury has taken preliminary action against businesses based in Hong Kong, where the city has since become a global leader in practices like importing and re-exporting prohibited Western technology to Russia, creating front companies to purchase prohibited Iranian oil, facilitating the trade of Russian-sourced gold, and managing “ghost ships” that engage in illegal trade with North Korea.

He stated that the committee is interested in learning how the US Treasury will combat Hong Kong’s financial system’s financing of money laundering and sanctions evasion.

Jesse Baker, assistant to the US deputy treasury secretary, met with Hong Kong financial institutions, including HSBC, StanChart and Bank of China ( Hong Kong ) in Hong Kong on December 11, warning them not to engage businesses with Russia or help Russia evade western sanctions, Nikkei reported.

In fact, Trump met with his top officials to decide the United States ‘ response after Beijing passed the Hong Kong National Security Law on June 30, 2020. &nbsp,

At the time, Trump had considered forcing an end to Hong Kong’s peg policy, but opted against the move due to commerce and treasury officials ‘ opposition. Instead, he signed an executive order to end Hong Kong’s special status.

The Biden administration has not discussed de-pegging the Hong Kong dollar from the US greenback over the past four years.

In November 2022, markets fretted that Hong Kong’s peg policy would end as the city’s currency had repeatedly touched 7.85 per US dollar, the lower end of the allowed peg range of 7.75-7.85, amid rising US interest rates. &nbsp,

Bill Ackman, a billionaire investor at the time, predicted that the Hong Kong dollar would decline and that its peg to the US dollar would collapse. Boaz Weinstein, a veteran trader, claimed to have a 200-to-1 payoff potential when he bet against the Hong Kong dollar. &nbsp,

De-pegging debate

Some Hong Kong experts said they don’t believe the Taiwan Straits will soon experience a de-pegging unless a sudden war breaks out. However, they did not rule out the possibility of de-pegging in the future.

According to Vincent Lam, a financial columnist and fund manager based in Hong Kong, it’s unlikely that Trump will act to stop the country from using US dollars because this conflicteth with US interests. She noted that Trump has vowed to impose a 100 % tariff on BRIC nations that engage in de-dollarization schemes. &nbsp,

He added, however, that if the Hong Kong government doesn’t improve its balance sheet, it runs the risk of depleting its$ HK$ 550 billion fiscal reserves and will have to abandon its peg policy in the coming years. He claimed that in order to maintain financial stability, Hong Kong can peg its dollar instead to a basket of global currencies.

Allan Zeman, the founder of Lan Kwai Fong Group, stated in a recent interview that the Hong Kong government should have a plan B for its currency peg policy.

He claimed that a peg to the US dollar would hurt Hong Kong’s competitiveness and economy if US inflation and interest rates remained high during the Trump 2.0 era. He claimed that in this situation, a de-pegging might be beneficial for Hong Kong.

In an article, Charles Gave, the founder of the Hong Kong-based Gavekal research group, predicted that Hong Kong might become the potential home for a new international financial system in the coming years. &nbsp,

He claimed that many Asian exporters have kept their income in Hong Kong over the past few years, leading to an increase in the city’s US dollar reserves. He claimed that if these deposits were converted into Hong Kong dollars and lent to Asian nation borrowers, a new pyramid of US dollar-denominated credit would emerge that US authorities would not be able to control. &nbsp,

Hong Kong may represent a new flashpoint in Trump’s fight with China, according to a Bloomberg commentary on December 21. Trump may look into Hong Kong’s peg policy again because he doesn’t like being told he has no say in something.

Yong Jian contributes to Asia Times. He is a Chinese journalist who specializes in Chinese technology, economy and politics.

Read: Call for HK to prepare for possible US sanctions

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Indonesia’s ‘perfect husband’ sentenced to 6.5 years’ jail in tin-mining corruption scandal

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JAKARTA: High-profile businessman&nbsp, Harvey Moeis, nicknamed Indonesia’s “perfect husband” by netizens, was sentenced to 6.5 years in prison and a penalty of 210 billion rupiah ( US$ 13 million ) for his role in a massive tin-mining corruption case on Monday ( Dec 23 ).

He was also fined 1 billion ringgit.

Harvey, 39, was found guilty of fraud and money laundering in connection with the improper tin mining and trading. In Bangka Belitung state off Sumatra, the state-owned metal worker PT Timah’s concessions were where the illegal miners took place.

Harvey’s prison name is, however, considerably shorter than the 12 years lawyers had sought.

Due to the fact that Harvey was not a member of the management team at PT Refined Bangka Tin ( RBT), the court determined that 12 years of imprisonment would be too much. RBT is the business that gained admittance to PT Timah’s control with Harvey’s support.

According to the court’s findings, Harvey brokered talks for at least four smelting businesses to practice iron from improper mine, receiving payments of up to US$ 700 per kilo.

Over the years, he managed to amass at least US$ 30 million as a result of a co-conspirator named Helena Lim.

The prosecution’s testimony at the trial revealed that the state losses allegedly resulted in 300 trillion rupiah, mostly from irreparable environmental harm brought on by illegal mining activities. &nbsp,

A week would be given to choose whether to file an appeal, according to the prosecution.

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US falling behind China in race to nuclear fusion – Asia Times

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China is moving at incredible frequency to become the world’s first to use nuclear integration as a source of income. With the scheduled completion of the Comprehensive Research Facility for Fusion Technology ( CRAFT ) in Hefei Province in 2025, China will possess a unique scientific and engineering infrastructure for its fusion effort.

A crucial middle stage, the Burning Plasma Test Reactor, will be operational in 2027, while a prototype integration energy plant, the China Fusion Engineering Test Reactor, is currently being developed. China’s South fusion reactor holds the record for blood confinement, and other essential integration tests are in progress in various locations of the state.

One may avoid asking: Where is the US in light of the steady stream of good integration reports coming from China. Due mainly to the terrible lack of commitment from the Federal government, the US is in danger of losing the earth leadership position in integration which it had occupied for almost three-quarters of a decade.

Given all the talk about maintaining the US’ technological advantage in relation to China, this is nothing less than a controversy. Fortunately for the US, personal market investments in integration have grown considerably, and US private companies are moving forward with a variety of optimistic and encouraging projects aimed at achieving corporate power generation by fusion in the not-too-distant future.

We emailed the Fusion Industry Association ( FIA ) CEO Andrew Holland for his opinion on the state of fusion in the US and China. The FIA has established itself as the words of the secret fusion market worldwide.

The most recent meeting was a follow-up to the one that Asia Times released in three episodes in January 2021. Asia Times Senior Science editor Jonathan Tennenbaum conducted the interview.

Contact: In your White Paper,” Bringing Fusion to the US Grid,” you argued that the US government should make a significant change in integration R&amp, D prioritization. And you compare the lack of sufficient aid by the US government to fusion with China’s optimistic fusion program, which is moving away quickly. How would you contrast the US’s merging efforts with what are happening in China?

AH: The US has been a world leader in integration since the very beginning of integration research by institutions back in the ‘ 50s. The United States has always been the leader in pushing forward studies, starting with blood physics, and therefore looking at how to build a fusion power break-even power plant, first working with the UK and then working with Japan and Europe.

China has not been a participant in that until the next 20 years or so. When China joined the ITER ( International Thermonuclear Experimental Reactor ) program more than 20 years ago, China began investing to advance China to world leadership status. Investments in research, into facilities and even into individuals – blood physicists and the institutions that are important to educate them and to build and run experiments.

This occurred at a time when the global system was viewed as being largely transparent. A lot of the leading Chinese scientists have done work in US and European labs and Japanese labs. Collaboration has existed for a long time, both in ITER and elsewhere.

The US program on fusion has always been ambitious, but perhaps lacking in funding to allow follow through, is what I would say. A few things, in my opinion, need to be said.

For seven straight years now, Congress has appropriated more money every year into the Department of Energy’s Fusion Energy Science Program. So there has been a rise in funding for fusion, sometimes in significant jumps, sometimes in relatively small jumps.

Along with that has come new legal authorizations, directing the Department of Energy to create not only a fusion science program but a program that has the mission of delivering fusion energy-delivering a pilot plant. There has been a slow inclination toward commercialization.

Unfortunately, the US program is pretty heavy on legacy-funded programs. There is a saying in [ Washington ] DC that the DOE spends a lot of money on on certain mortgages each year, which account for a sizable portion of that funding.

These programs are focused largely on legacy R&amp, D programs, rather than forward-thinking commercially relevant programs. Given that the majority of the program and budget goes toward paying for these mortgages, it’s very difficult to say that we’re transitioning a DOE program.

Spending on these programs may be important for many reasons, like basic science and understanding of plasma physics, but really aren’t that important for the actual commercialization of fusion energy.

The Department of Energy has also authorized and begun a number of new programs. Notable among them are public-private partnerships, like the INFUSE ( Innovation Network for Fusion Energy ) program and the milestone-based public-private partnership.

Additionally, there is a brand-new initiative called Fusion Innovative Research Engine ( FIRE ) Collaboratives, which are research centers that are focused on pressing commercialization issues like the fuel cycle and materials. But the actual funding for these programs is still a smaller percentage than the legacy programs. So far, this transition has not been seen.

Now, China isn’t bound by these legacy programs nearly as much, and has been able to make investments focused towards building a commercialization program.

In essence, if you look at the US in the late 20s and early 20s, there was a request from the then Undersecretary for Science, Paul Dabbar, to the fusion community, asking them to “give me a community plan for what the fusion program should do.” Everybody should come together, and give us the consensus”. They succeeded, too.

The result was a long-range plan, delivered very early in 2021, that laid out the steps and programs and investments that needed to be made, to start to deliver a fusion pilot plant. The US National Academy of Sciences released their own report shortly after, stating that this is what you need to do to deliver a pilot plant.

Ironically, in fact, that’s about the same time that the Fusion Industry Association ( FIA ) was officially formed. In May 2021, we established ourselves as an independent organization. Then, in March of 2022, the White House hosted a fusion summit and declared what they call a Bold Decadal Vision for commercial fusion.

Therefore, the US government and the US fusion community have a plan for what they need to do to launch a pilot fusion power plant and commercialize fusion energy. The challenge is, that the actual budget of the Fusion Energy Science Program has basically not changed at all.

The truth is that we already have all the plans in place, and we only need to put them into practice. We need Congress to fund the money. The President needs to request the necessary funds to accomplish the task. And then you turn around and look across the Pacific to China.

A new facility, which they are calling CRAFT, is about to be finished. This is basically a place where they put all the fusion test stands together. All the projects listed in the long-range plan for the US are being constructed right now or have already been finished, but in China! &nbsp, &nbsp, &nbsp, &nbsp, &nbsp,

Nothing new has been released from the US program in the interim. It is difficult to see how this is moving forward. However, the reality is that the US government is not at the center of the ambition. The ambition in the United States is with the private companies. Private companies are still making progress. Funding is flowing into these companies.

Although the US government doesn’t have much funding, significant funding is being poured into these businesses from investors, venture capitalists, and strategic investors. The growing, American-led industry is basically a testament to the power of the American capitalist system that I think we could be on the verge of getting there. This has been observed before.

JT: In China, the government is evidently committed to a real battle plan for fusion. As you pointed out, this is not only happening on paper, but the Chinese are also creating new structures. That was the way the US used to do things in the’ 50s and ‘ 60s in practically every field of science and technology. The idea was to simply go ahead and build a lot of things and see what works. What has happened to that spirit?

AH: I don’t believe it’s gone. I think it’s just lost from the United States government. Take a look at Commonwealth Fusion Systems for an example if you are talking about building things.

They are building a demonstration-class tokamak in Devens, Massachusetts, right now. Look at Helion, which is building their demonstration machine called Polaris in Everett, Washington, just north of Seattle. Zap Energy, in the same area, is testing their FuZE-Q machine right now. I could list a number of more businesses that are currently developing.

So there’s no shortage of building in fusion happening now in the private sector. In fact, we even see the charitable sector getting involved. MIT has found a number of philanthropic investors who want to invest in building a cyclotron that can function as a user facility for the fusion industry to test materials on. This is occurring largely without the US government’s assistance.

JT: Apart from the need to increase its scandalously low fusion budget, what things should the US government be doing now? What connection does this have to the work of the private sector?

AH: If the US wants to secure its leadership, certain things need to happen. The necessary infrastructure must be created for a commercialization program. What that means is that you need to build materials test stands, you need to build fuel cycle test centers, and so on.

Both the government and private industry must have access to the government’s built-in user facilities. A good example is in the aerospace industry: the government builds the wind tunnels and then industry comes in, and pays for access to those facilities. According to classical economics, the government’s failure to intervene would result in underinvestment of these public goods.

The second thing the government should be doing, but hasn’t been nearly enough, is to be investing in the companies directly, to help them move towards the goal of fusion pilot plants. This actually acts as a catalyst. Public-private partnerships enable companies to secure investment, to secure more private dollars.

Government funding has the same effect in a field as fusion that is ambitious. Investors still think that, ah, this is a wildly uncertain area. However, if the government says that we’re investing directly in this company, that seal of approval indicates that it is worthwhile to do so.

This is a real way to accelerate investment into fusion pilot plants. Governments around the world have realized that other nations will invest if they don’t support investment in new technologies.

The CHIPS Act, providing$ 54 billion dollars of funding to build new semiconductor manufacturing facilities in the United States, was adopted because other countries had subsidized this industry so much that it would have taken this strategic industry away from the United States.

There is nothing, in my opinion, more strategic than fusion. This is zero-carbon energy without a scarce fuel source, something that can deal with energy security and deal with our problems of scientific leadership right away. Any government should want to lead and not only have this strategic industry in their nation.

The United States has put really good plans in place. That’s something I want to be clear about. The milestone-based public-private partnership is a really good program. Really good is the INFUSE program. But the amount of money is so small that it really is not impactful to any decision-making by companies at this point.

JT: Why isn’t fusion given more of a priority? Is the problem on the level of bureaucratic thinking?

AH: Unless there is a push from the top, the status quo predominates over any change in politics and government.

JT: Well, that brings me to a central question. Everyone is now referring to China as the United States’ number one strategic rival or even adversary, and people are becoming more aware that China is on the verge of outperforming the United States in many respects.

The Chinese government has clearly identified fusion as a key strategic area, and China clearly aims to get there first, in terms of realizing a fusion pilot plant and developing a commercial fusion industry. I believe that should prompt the US to declare that we had better get moving because the Chinese will defeat us. But apparently, that message has not yet gotten through.

AH: Well, it’s all about timing in Washington, even if it has passed. You shouldn’t expect major new programs at the end of a president’s four-year term. When there is a divided government versus when there is a unified government, it’s all about.

I expect that in 2025, there will be new pushes for legislation from Congress to bolster America’s competitive position vis-à-vis China and the rest of the world. The Trump Administration wants to shake up and reshape the world and perpetuate it.

The United States is not a place where things happen linearly. Things move only occasionally. At the beginning of the Biden administration, there was the Bipartisan Infrastructure Law, followed by the CHIPS and Science Act, followed by the Inflation Reduction Act, all of which amounted to an extraordinary amount of funding going into high-tech and energy fields. However, what actually went into fusion was merely a cash donation to support the construction of ITER in the South of France. &nbsp,

New competitiveness funding is what we’re pushing for and anticipate seeing in the new Congress in 2025. And we hope that fusion will be part of that.

We have a strategy. We’ve put forward a$ 3 billion supplemental funding request, and we think there is a case that it should be expanded up to a$ 5 or$ 10 billion supplemental funding request. This money is not intended to be used to build fusion infrastructure and support public-private partnerships in fusion, which are the primary sources of funding for annual appropriations.

JT: Let me bring up the China issue once more, in terms of manpower. According to what I saw, China has ten times as many PhDs in fusion science and engineering as the US. Shouldn’t that be a signaI for rethinking in the US?

China once relied on West Indian students to provide the majority of its top-level skills and knowledge. Those times are gone. China now produces its own elite fusion scientists and engineers at a much higher rate than the US. Shouldn’t the US be concerned about that, if the US wants to retain its leading position?

AH: I actually don’t worry about that issue. The workforce issue is a market issue. And if there is a market pull, we’ll find the workers for it. That’s the great benefit of the American system, the combination of government, philanthropic universities and private sector working together.

I believe there is a reason why the US holds the top spot in higher education, with the country having the most than one in the top 100 universities. US universities are market-oriented, so they listen to what the students want, and make the investments.

At the top level, I worry more. The top level of government funding is just not there. And so we could convince these universities to fund PhD plasma physicists ‘ employment in the UK or Germany. That’s more what I worry about.

JT: What has happened to the US national laboratories, which were formerly conducting fusion research? It seems that hardly any new experiments are being built there.

The national labs are the pinnacle of American science, according to AH. They are the ones that get the funding from DOE. The General Atomics DIII-D facility, which is essentially a national lab-class facility, receives the majority of the$ 800 million fusion budget.

I want to be clear that the national labs are doing really important science. However, we must witness the transition from science to science for the sake of commercialization.

If you look at a pie chart of where the$ 800 million DOE funding for Fusion Energy Sciences goes, the largest chunk,$ 240 million goes to ITER. The 30-year-old Tokamak run by General Atomics is DIII-D, which is the next-largest. It does really important science. Although it is not a brand-new machine, it does have excellent diagnostics. It’s not breaking new ground.

The National Spherical Torus Experiment-Upgrade ( NSTX-U) experiment from Princeton Plasma Physics Lab is the next-largest experiment.

JT: The NSTX is quite an old facility.

AH: They intend to reopen an upgraded facility for experiments next year, but we haven’t been able to do so for nearly a decade.

So if you look at those three facilities I just mentioned, that’s the bulk of the DOE fusion budget. However, commercialization-focused programs must include the construction of the fusion infrastructure I mentioned earlier. We need to make investments in both.

Now, I’d like it if there was” a rising tide that lifts all boats.” If we had a billion-dollar program or more in the Fusion Energy Sciences, then we could do all of these things.

We anticipate seeing really good science emerge from NSTX-U, and there is still good science emerging from DIII-D. But it’s not clear to us that this is better than the science that will come out of the private sector, where companies are building the next generation of these machines. &nbsp, &nbsp, &nbsp, &nbsp, &nbsp,

JT: Are you thinking of an analogous process to the commercialization of space flight, with the transfer from NASA to SpaceX and other private companies?

AH: This is exactly what.

In 2006 NASA was looking to replace the space shuttle for access to the International Space Station. They had a plan, known as the Constellation and Orion programs, to build rockets to transport astronauts from Earth to Mars and back to Earth. A small group within NASA said, well, there are private space companies coming up, SpaceX and others.

No one initially believed they could ever accomplish this, but NASA responded,” OK, here’s$ 500 million, let’s do a public-private partnership with them.” They called the project COTS, Commercial Orbital Transportation Services, which aimed to develop private spacecraft to take deliveries, and ultimately astronauts, to the International Space Station. &nbsp,

The NASA COTS program invested directly into SpaceX in a milestone-based format. That leaves SpaceX with no money after hitting milestones. The ultimate milestone, of course, was delivering an astronaut to the International Space Station. However, they also reached a number of agreements and negotiated.

Finally, of course, SpaceX did succeed, and now they’re able to do it for 10 times less than what NASA had originally planned to spend. So we’re currently at the same point in fusion, with a milestone-based public-private partnership program that is the equivalent of the NASA COTS program.

They put it in place, but the government hasn’t given it even half of what it needs. To date, only$ 46 million has been allocated to companies. And when they finish it the following year, we anticipate another$ 40 million to be added to the budget for this year. But to be impactful, you need to add a zero to those numbers. You require a larger order of magnitude.

We think that the milestone-based program is the way that the United States is going to get to its fusion pilot plants. It’s done in the traditional American way. It’s your private sector and your public sector working together in partnership. The risk is taken by the private sector. The public sector supplies the infrastructure know-how. It’s a really creative way to go about it.

JT: Coming back to China, how would you characterize their effort and what do you think are the most important projects they have coming online?

You said it appears like there is a government plan. China is not the Soviet Union. There appears to be some internal competition going on, and it has evolved into something different from the traditional command-top-down economy. There are private companies involved. ENN, Startorus Fusion, and Energy Singularity are three private fusion companies in China that we are aware of.

There’s probably more, but those are the ones that have been significantly funded and are doing important work as of now. Energy Singularity is the one who is currently creating a tokamak using high-temperature superconductor magnets, essentially following a similar blueprint to what Commonwealth Fusion Systems in the US is building. The other two companies are looking towards other varieties of tokamaks.

Therefore, there is a more financially successful private sector approach. And then there is a government program. However, state-owned enterprises are also supported by the central government in China, Beijing, and other central government entities. They have created a new China Fusion Corporation that looks to be a delivery vehicle for what they are calling BEST– the Burning Plasma Experimental Superconducting Tokamak.

This is a classic low-temperature superconductor device rather than a high-temperature superconducting tokamak, but it will also be an ITER-class machine that will achieve fusion break-even. They are building it right now in Hefei, in Anhui province, not far from the CRAFT platform, the Comprehensive Research Facility for Fusion Technology.

What’s interesting is that, if you look at the company registrations and funding, a sizable portion of the funding for this government program has actually come from private investors. Leading among these is the electric vehicle company NIO.

We’ve looked into Chinese public company records, and it appears that the NIO is at least partially funding the building of BEST, but it’s not clear who is funding China Fusion Corporation. To be clear, I haven’t actually talked to them and I don’t know and of that for sure.

Because China is a different system than it was ten years ago, it is difficult to say for sure about any of this. It’s not as open. Having said that, Chinese scientists, working for both public and private companies, are actively involved in international fusion conferences around the world. They’re there to learn and they are there to share their details.

Some details are still ambiguous, though. There was an announcement late last year of the formation of a China Fusion Corporation, a press release&nbsp, was put out by the China National Nuclear Corporation. However, that press release was removed from the Internet within a day or two. I have an English language translation, but you can’t get the source anymore.

JT: Do you see a national security perspective in the race to build a pilot fusion power plant in light of all the talk about China as a strategic rival of the US?

AH: Any concentrated source of electric power that doesn’t rely on energy resources from an unstable world is national security related.

JT: What if China were to win the race for fusion energy commercialization?

AH: If the Chinese get to fusion first, we shouldn’t expect that this would just be a pure market-based approach. We should anticipate that China will use its newly established position of authority in global geopolitics. We should expect that they will use it throughout their Belt and Road partner nations, further tying them into a centralized, Beijing-led whole order.

Fusion is therefore more than just something the United States should do because it benefits both the environment and the economy. Examples from other industries show that China will take this and make it central to their global effort to put China at the center of the global geopolitical order.

JT: Would you draw a comparison to the attempt to reach the Moon?

AH: It’s similar in that we’re seeing a global race and multiple players work towards something very technologically challenging. However, I must say that although going to the Moon was and is an extraordinary achievement, it has a much greater impact on the day-to-day lives of the people living in your country if you can produce power without emissions and without relying on potentially hostile external sources.

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No assurances for Taiwan under Trump 2.0 – Asia Times

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The nomination of China hawks like Marco Rubio, Mike Waltz, and Elbridge Colby for top leadership positions by the incoming Trump 2.0 administration seems to have good things for Taiwan. &nbsp, &nbsp,

Sydney Morning Herald&nbsp, journalist Lisa Visentin is among those who&nbsp, conclude&nbsp, that” Trump has sent an early information to Beijing that Washington is doubtful to leave Taiwan”. A recent&nbsp, Taipei Times&nbsp, editorial&nbsp, exulted&nbsp, that the content of Trump’s proposed management team “indicates that the US would maintain its strong support for Taiwan”.

Alas, the reality is more complicated. Washington is currently anticipating wet climate on two sides in Taiwan.

The first is a requirement that Taiwan raise its defence spending from its current 2.5 % of GDP. Trump&nbsp, said&nbsp, the number may be 10 %. Lest we dismiss that as everyday Trumpian rhetoric, Colby, the recently appointed secretary of defense for plan, has &nbsp, said&nbsp, the same thing.

A resumptuous US-China trade war, which would directly harm Taiwan among different US friends by stifling China’s earnings from the US market and therefore stifling China’s ability to buy the goods from other Asia-Pacific nations, is the next anticipated tsunami.

But there’s more. Trump 2.0 is more likely than any US state since the Korean War to end US support for an automatic Taiwan despite the presence of China hawks in the Oval Office.

The US’s present support for Taiwan times up to 1950. In 1949, the Chiang Kai-shek state and the Republic of China under Mao Zedong’s control had taken control of mainland China, forcing the Republic of China state and its remaining troops to relocastate Taiwan. &nbsp,

Beijing planned to end the Chinese Civil War by attempting to win Taiwan in the fall of 1950 after Washington’s assurance had declined. However, the Korean War’s onset in June of that year persuaded US President Harry Truman to place the US Navy to stop PRC troops from crossing the Taiwan Strait. Thereafter, Taiwan became a US territory.

Fast forward to the current, and for a while, there are several reasons why once-reliable US assistance immediately seems unsure.

Second, Trump rejects the bipartisan isolationist perspective that has dominated US foreign policy since the end of World War II. The US’s great strategy has long allowed Taiwan to choose its own global social destiny.

Taiwan turned into a successful Chinese progressive democracy, exemplifying the kind of change that Washington promotes globally as its original Leninist government effectively implemented land reform and later replaced it with political liberalization. This project is based on America’s self-image, but it also reflects a well-known theory that democracy promotes harmony because democratic governments have a tendency to avoid conflict. &nbsp,

An independent Taiwan also aids in establishing the democratic social order that is supported by the US in Asia. &nbsp, As for, acquiescing to a hostile PRC invasion of Taiwan may diminish, perhaps fatally, America’s placement of corporate leadership in the Asia-Pacific area. &nbsp, &nbsp,

Trump’s thinking about Taiwan, but, is not relatively based on intellectual or strategic views that make Taiwan’s independence beneficial to the United States.

Trump rather emphasizes&nbsp his hatred toward Taiwan for allegedly stealing semiconductor production from the US and for failing to pay for US military protection, despite the US-Taiwan Relations Act’s prohibition against military defending Taiwan and Taiwan’s responsibility to pay for the weaponry the US provides. &nbsp,

On four times, Biden&nbsp, said&nbsp, officially he would give US forces to protect Taiwan in the event of a PRC harm. Trump, in contrast, frequently expresses reluctance to defend Taiwan because it is too little, too near to China, and unimportant in comparison to that country. On the other hand, Trump touts his regard for and connection with Chinese leader Xi Jinping and has &nbsp, also admitted&nbsp, to taking guidance from Xi.

Another reason to doubt whether the US will continue to support an intelligent Taiwan is that Trump’s China bird advisors does not really dictate US plan. True, Trump allowed his team to impose a tougher US position on China during his first word.

They altered the language of important US policy statements to present China as an antagonistic state determined to stifle America’s rise to worldwide influence. According to a technique report released by the incoming Trump presidency in January 2021, the US has a strong curiosity in preventing the PRC from seizing Taiwan. The Uyghur Muslim minority’s harassment was also referred to as “genocide” in the previous Trump White House.

Trump, but, also showed that he was willing to compromise corporate objectives in the search for a bilateral trade agreement with Beijing. Trump&nbsp, decided&nbsp, to cut US sanctions against Chinese communications large ZTE as a favour to Xi in 2018. He also&nbsp, reportedly&nbsp, told Xi he endorsed China’s severe cure of Uyghurs.

However, the anti-China, pro-Taiwan eagles in the Trump 2.0 management may not last long. The turnover rate among senior officers was incredibly high during Trump’s first name. &nbsp,

Third, the effect of other top advisors in the incoming Trump presidency less friendly toward Taiwan, quite as mega-billionaire Elon Musk and near-billionaire Vivek Ramaswamy, may outweigh the influence of the pro-Taiwan advisors. &nbsp,

Ramaswamy has &nbsp, said&nbsp, Taiwan matters to the United States only because it makes advanced semiconductors and that after ramping up its own chip production, America should stop protecting Taiwan. Meanwhile, Musk is thoroughly compromised by his business interests in China, where his most profitable Tesla factory is located. &nbsp,

Musk has &nbsp, called&nbsp, himself “kind of pro-China” .&nbsp, He takes the PRC government’s position that Taiwan is part of China, equating Taiwan’s relationship to the PRC with the US federal government’s relationship to the US state of Hawaii.

Musk wants Taipei to comply with Beijing’s demands to prevent a cross-strait conflict that would disrupt the supply chains Musk’s businesses rely on. Ramaswamy and Musk can be expected to place a higher value on avoiding a US war with China in their advice to Trump as opposed to preserving Taiwan’s democracy.

Or, there’s a chance that the China hawks will vehemently despise Taiwan because of how much they control US policy in Asia. Beijing is deeply concerned that US efforts to prevent Taiwan from being forcibly annexed by the PRC serve as a cover for an alleged American plot to slash the country into pieces to secure Taiwan’s independence. &nbsp,

Some China hawks are known to engage in elaborate symbolic gestures intended to disparage or humiliate China, as if this was based on the idea that the Chinese government would consent if the US showed signs of strength and commitment. Then-Speaker of the House of Representatives Nancy Pelosi’s visit to Taiwan in 2022 was one such example.

China responded by stepping up rather than by ceasing to expand and enhance the size and standard of its military exercises close to Taiwan. US Indo-Pacific commander Admiral Samuel Paparo&nbsp, observed&nbsp, that in 2024 he” saw the most rehearsal and the most joint exercises from the People’s Republic of China that I’d ever seen” .&nbsp,

US supporters of Taiwan should aim for policies that, ideally without stoking hysteria in Beijing, actually improve Taiwan’s security and defensibility. If completely empowered, the China hawks might not have the restraint to stay on this prudent middle path, which is best for Taiwan’s well-being.

There is also a non-trivial possibility that Trump and Xi could reach a mega-deal to reset US-China relations. By purchasing tens of billions of dollars worth of additional US products, Beijing would promise to redress China’s enormous trade surplus with the US, which Trump has discussed most. This would be a rehash of the” Phase One” trade agreement that was broken just before the Covid pandemic began. &nbsp,

In addition, China would reassure Trump that trade between China and the US would continue to be free in an East Asian nation. In return, Trump would abandon US strategic leadership in Asia. He already has a strong belief that the costs of US leadership abroad outweigh the advantages that regular Americans can expect. &nbsp,

Washington would cease selling arms to Taiwan as part of this restrenchment and give up its alliances and military installations on the western rim of the Pacific. Of course, many members of the US Congress would object. However, as the Trump phenomenon has demonstrated, we shouldn’t underestimate how much Republican Party politicians will give up their core beliefs and principles in order to maintain Trump’s favor. &nbsp, &nbsp, &nbsp,

Although America has never been tougher on China, this occurs amidst an anti-internationalism that is part of Trump’s” Make America Great Again” package. Therefore, Taiwan’s enduring fear of being snuffed out by America is more relevant than ever. Koreans have a tradition of describing their nation as a” shrimp among whales.”

Increasingly, that metaphor applies at least as well to Taiwan, with a potentially fickle US as one of the whales.

Denny Roy is Senior Fellow at the East-West Center, Honolulu

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Biden fires grand finale chip war salvo at China – Asia Times

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The Biden administration announced a deal exploration into Chinese tradition semiconductors, which generally refer to 28 millimeter or higher chips, to defend America’s chip-making business. &nbsp,

According to a fact sheet released by the White House on Monday ( December 23 ), the Office of the US Trade Representative will launch a Section 301 investigation to examine the People’s Republic of China ( PRC )’s ( PRC ) plan to target foundational semiconductors or mature node chips for dominance and the impact on the US economy. &nbsp,

The USTR probe will protect Chinese semiconductors integrated as components into upstream products for vital industries like defense, mechanical, medical devices, aerospace, telecommunications, and power generation and the electric grid. &nbsp,

It will also examine whether the impact of China’s actions, policies, and methods on the production of silicone carbide materials ( or other chips used as inputs to semiconductor fabrication ) contributes to any unjustifiableness, discrimination, or burden or restraint on US commerce.

US Trade Representative Katherine Tai, the Biden-Harris Administration’s official, praised the investigation as” a powerful tool for standing up for American workers and firms, strengthening the resilience of important supply stores, and supporting unmatched investment in this sector.”

The Biden presidency was reportedly preparing to investigate China’s identity cards, according to a December 16 article in The New York Times. According to the report, the investigation does take at least six months to complete, so the incoming Trump leadership will be in charge of making that decision.

The USTR’s upcoming tradition chip sensor was criticized by the Chinese Ministry of Commerce (MC) on Monday.

Through the Device and Science Act, a MoC director claimed that the US part has given its chip business “heavy incentives.” The US accuses China of having so-called non-market techniques and exaggerates the risk of the Chinese chip industry, noting that its businesses account for nearly half of the global chip industry.

Washington should take into account the fact that American chips are imported from China much more than American chips are.

” The Biden administration wants to create a fine net to contain China’s chip sector”, Lai Jiaqi, a columnist at Guancha.cn, said in a recent article. &nbsp,

” In the past, the US government’s curbs against China’s chip industry were focusing on the ban of the shipment of advanced US chips”, Lai said. China is gradually increasing its investments in the production of its own mature chips as the US tightens its regulations.

According to the author, it’s unlikely that there will be an oversupply of Chinese mature chips in the next two to three years, according to a report from the Center for Strategic and International Studies ( CSIS), a think tank based in Washington.

Overcapacity concerns

The three reasons why overcapacity concerns are either exaggerated or misunderstood as coming from China are described in the CSIS report:

  1. The purpose of Chinese companies expanding their capacity is to primarily supply domestic demand. China still imports the majority of its domestic semiconductor consumption requirements.
  2. Domestic demand in China is still high and will increase significantly through 2030. Domestic chip capacity will be able to meet about 90 % of domestic demand by 2030, compared to 37 % in 2020, assuming all of the previously announced factories in China are finished and operational by 2030.
  3. For some consumer electronics applications, Chinese foundries ‘ products are becoming more expensive, but they are still far less reliable for end-use applications like cars. Foreign companies will continue to dominate the Chinese market.

The White House announced on Monday that it would strengthen federal supply chain security in addition to looking into Chinese legacy chips by forbidding executive federal agencies from purchasing or obtaining products or services that include chips from specific Chinese factories and other relevant entities. &nbsp,

Additionally, it added that it will work with its international partners to improve cooperation in semiconductor supply chains and address shared concerns about China’s alleged unfair practices.

CHIPS for America

The Biden administration has introduced a number of new measures to combat China’s chip sector ahead of Republican President-elect Donald Trump’s inauguration on January 20.

Following two previous rounds in October 2021 and 2022, the Commerce Department’s Bureau of Industry and Security ( BIS ) released a third package of chip export regulations against China on December 2. &nbsp,

Additionally, the BIS added 140 Chinese chip manufacturers and suppliers to its” Entity List,” as well as new export controls for 24 different types of semiconductor manufacturing equipment, three different software tools for creating or producing semiconductors, and high-bandwidth memory ( HBM ) chips. &nbsp,

To determine the best ways to encourage government contractors, especially those with commercial IT products and services, to increase their use of domestically produced chips, the US Office of Management and Budget ( OMB) released a Request for Information ( RFI ) on December 10.

The White House released its first-ever Quadrennial Supply Chain Review on December 19 to provide an in-depth analysis of the nation’s crucial supply chains, recommendations for improvement over the past four years, and recommendations for further improvements to US resilience in the future. &nbsp,

Additionally, US President Biden has accelerated the pace of funding qualified chipmakers for the construction of foundries. &nbsp,

According to the government, the CHIPS for America initiative has so far provided over US$ 26 billion in incentives to boost domestic production of semiconductors and their supply chains. It said this made America home to all five of the world’s leading-edge logic and memory providers, while no other economy has more than two. &nbsp,

‘ A fool’s errand’

Four Chinese industry organizations demanded their members not to purchase American legacy semiconductors due to” safety” concerns after the US announced new export controls to prohibit the shipping of high-end US chips to China on December 2. &nbsp,

The Internet Society of China, the China Association of Automobile Manufacturers, the China Association of Communications Enterprises, and the China Association of Semiconductor Industry Association are just a few of the industry groups. &nbsp,

Concluding the Biden administration’s four-year efforts to boost the US chip sector, US Commerce Secretary Gina Raimondo told the Wall Street Journal on December 21 that” trying to hold China back is a fool’s errand”.

She claimed that China’s export controls were only” speed bumps” and could not slow China’s development of its own semiconductor capabilities. She claimed that the only way for the US to win the chip war is to out-innovate China and stay ahead of it. &nbsp,

Liu Lanxun, a military columnist from Hubei, claimed that Raimondo finally admitted at the conclusion of her term that the US chip ban against China is a waste of time. However, he claimed that because China is also investing heavily in its chip industry, the US might not always succeed in the end.

Yong Jian contributes to Asia Times. He is a Chinese journalist who specializes in Chinese technology, economy and politics.

Read more about the anti-US chips campaign by China-based business groups.

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‘Trumpflation’ already wreaking havoc on Bank of Japan – Asia Times

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Before it even arrives, the Bank of Japan has a very common feud with Donald Trump’s 2.0 White House.

Tokyo is now putting the brakes on the following Trump presidency, which will take place in four weeks. Governor Kazuo Ueda is leading Asia’s second-largest business toward the total unfamiliar at BOJ office in Tokyo, where it is more evident.

Certainly, Japanese Prime Minister Shigeru Ishiba may dispute this classification. However, Ueda is securely in the driver’s seat with approval levels in the 20s and his ruling Liberal Democratic Party rarely hanging on to power.

The issue is figuring out when Trump will visit the White House on January 20. Door No. 1 is contextual Trump, ready to negotiate a “grand deal” business cope with China and perhaps others. Door No. Second: a” Tax Man” period that sparks trade wars that no one has seen before.

This doubt explains why Ueda’s plan board kept rates unchanged next year. And why it’s probably not even a question to consider a price trek for January. The BOJ stated in a speech last week that “uncertainty persists regarding the country’s economy and rates.”

Local problems are bad much. Team Ishiba is scrambling to implement innovative fiscal stimulus to boost domestic demand as Chinese growth declines. Not exactly a good place for the BOJ to raise prices.

China’s economic downturn is its own conundrum. Tokyo is deeply alarmed by the recession that Asia’s biggest sector exports. For years, Japan was accused of generating more challenges than development. Then it’s China, by much Japan’s leading export market.

India fears about the mix of Trump’s affected trade conflict and domestic plans to arrest millions of illegal immigrant workers. The great possibilities this will make what industry observers have coined” Trumpflation” has Ueda’s BOJ in a spin.

That includes legislators from European Central Bank Governor Christine Lagarde to Bank of Korea Governor Rhee Chang-yong.

” In Japan, industrial production likely fell 3 % in November from October”, says Stefan Angrick, an economist at Moody’s Analytics. ” Business forecasts for November have looked bad, with companies pointing to falling production across machinery, autos and technology”.

The bigger issue is income. The enthusiasm over the previous year’s wage negotiations for the spring has long since waned. The union workers ‘ biggest increases in 33 years didn’t stop the virtuous cycle of inflated salaries and increased use that many had hoped for. As 2024 begins, inflation-adjusted give is smooth.

Chinese CEOs could be prevented from raising pay in the coming year by competing concerns about China’s decline and Trump’s bombardment of tariffs. This danger is making the BOJ’s price increase timeline more challenging.

Previously, economists thought a December price climb was a done deal. Finally, a group of BOJ officials stepped up to the microphone to announce that there would be no tightening. Though” Trump business” challenges weren’t highlighted particularly, they were written between the lines in bold font.

With the Trump threat to impose$ 60 transfer taxes on Chinese goods, Japan would be at the middle of the collateral damage area. Any significant decline in the biggest customer for Japan had destroy it in 2025.

Japan Inc concerns, also, that Trump may teach his tariffs its approach. Trump has refused Ishiba’s noted many demands for a pre-inauguration meet. Due to this, Japan is concerned that Trump doesn’t view Ishiba as a crucial mate in the same way that he did Shinzo Abe, the prime minister for 2020.

And that the 100 % taxes Trump plans for Mexico-made trucks might remain aimed next at Toyota, Honda and Nissan. That may hinder the former two businesses ‘ efforts to combine to raise global market share.

For Ueda’s BOJ, dread must be the experience of the time. Ueda dragged his legs on raising prices to 0.2 %, where it is now, in the 15 weeks after taking the helm in April 2023. Despite robust economic growth and the favorable environment for higher Asian rates, this is true.

Having squandered that window of opportunity, Ueda today finds himself on the defense. With Ishiba’s gathering on the run, social pressure against price hikes is definitely mounting. The LDP’s current reliance on criticism party help to hold onto power is not all that helpful.

On the other side, there’s a real danger of” Trumpflation” that lingers back Japan’s manner. As Trump introduces laws that appear to be sure to increase global sales pressures, the threat has been brought up by economists, including Nobel prize Paul Krugman.

Trump’s taxes “would lead to a significant increase in consumer prices in the US.” We estimate that the proposed tariff increases would increase core PCE prices by 0.9 % if implemented using our rule of thumb, which states that every 1[percentage point ] increase in the effective tariff rate would raise core PCE prices by 0.1 %.

Or even more if Trump makes good on capturing millions of undocumented workers, thereby tightening US workers markets even more.

The author of” The Contest for Japan’s Economic Future,” Richard Katz, claims that domestic price trends, along with Trumpflation and a weaker yen, are putting the BOJ at a disadvantage. The BOJ is therefore holding off until more proof is available.

Ueda’s plan board “faces a dilemma”, Katz says. Objectives of higher prices in Japan typically lead to the BOJ raising interest rates. That would not only filter the level gap, but also help to counteract the yen’s yen’s upward pressure, and also help to combat inflation.

Katz continues, adding that” for the most part, the weaker yen and other components have been reducing true wages and, consequently, customer paying for the past five years. That prevents economic development, and the BOJ must maintain low interest rates to maintain afloat the business.

Katz adds that it’s even more concerning how and when Trump may put the laws he campaigned and won on into practice.

It’s unclear whether the benefits in minimum wage increases that employers granted this year will be repeated following year on the local Japan entrance. Because of the magnitude of imported inflation, it’s unclear whether minimum increases will result in higher real wages.

All of this is putting pressure on the renminbi. Last year, Finance Minister Katsunobu Kato said he was “deeply” concerned about the dollar’s new fall.

Katz argues that the BOJ’s entire prices plan depends on maintaining minimum wage increases at 3 % annually in the hopes that this will result in increases in real income. It will take many months to see the 2025 fiscal pay picture. Therefore, at least for this month, the BOJ is adopting a wait-and-see attitude”.

Daisuke Karakama, general business analyst at Mizuho Bank, says” I’m not certain if yen failure may be contained until March”. He adds that there’s” no assurance” the yen didn’t break through 160 to the money by January.

Trump Japan may encounter this in January, but there is no guarantee. And the degree of the” Trumpflation” that might follow.

Following William Pesek on X at @WilliamPesek

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No wallet, no phone, no problem: How you could pay with just your palm in future

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According to Mr. Arun Kumar, regional director of ManageEngine, algorithmic technology and artificial intelligence could be used to create fake palms.

” Measures, such as liveness monitoring, need to be in place to identify whether there are spoofed or impersonated names”, he said. The term “liveness recognition” refers to methods for determining whether someone is alive and well.

Additionally, businesses must make sure their devices are safe and secure.

” While people can change a stolen credit card, it would be challenging to change one’s finger if their genetic information is stolen”, he said.

Because they use the hand display and the vein pattern, according to Mr. Chua Zong Fu, mind of Ensign InfoSecurity’s managed security services.

However, it is still another collection of personally identifying details. It raises comparable privacy concerns, which could lead to illegal tracking or security if taken advantage of.

IS SINGAPORE READY FOR PALM PAYMENT?

Besides safety issues, another challenge could be the cost of setting up pay-by-palm models in shops, said Mr Chua.

” Palm payment systems calls for new technology to become purchased by retailers. Mobile products are not able to directly conduct pay-by-palm”, he said.

Some stores might even discover that the equipment, which is about the length of a laptop, do take up space on their countertops.

He noted that consumers are beginning to accept contactless payments, even for varieties that require biometric authentication, such as biometric or facial recognition.

However, the added ease of pay-by-palm may be limited because the majority of people carry their wireless devices around and can now use those funds for payments. &nbsp,

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Honda, Nissan and Mitsubishi merger to create global car giant

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As the two Chinese companies work together to fend off Chinese automakers ‘ competitors, Honda and Nissan have plans to merge.

Joining forces had make one of the world’s biggest vehicle manufacturers alongside Toyota, Volkswagen, General Motors and Ford.

The potential multibillion dollar offer to battle” the rise of Taiwanese power” was a key component of the strategy, according to Honda’s CEO Toshihiro Mibe.

Mr Mibe said a strategy to “fight up” needs to be in position by 2030, or they risk being “beaten” by rivals.

The consolidation, which would include Mitsubishi, of which Nissan is the largest shareholder, would give the three businesses the ability to compete with Tesla and another electric vehicle manufacturers.

Chinese-made electric vehicles, including BYD, have a growing share of the market for electric cars, which has put a risk to some of the best-known auto manufacturers in the world.

At a press conference announcing the merger talks, Mr. Mibe stated to reporters that” there is a surge of Chinese energy and emerging forces, and the construction of the automotive industry is changing.”

Some car manufacturers are finding it difficult to compete because local firms are more flexible and able to price their goods less than foreign competitors, making them much more appealing to buyers.

China has since grown to be the largest manufacturer of electric cars worldwide.

In October, EU officials said the Chinese state was unfairly subsidising its EV makers and announced big taxes on imports of EVs from China to the EU, after the majority of member states backed the plans. The tariffs are set to rise from 10% to 45% for the next five years, but there are concerns it could raise EV prices higher for buyers.

The total sales of Nissan and Honda is more than$ 191bn ( £152bn ), said Nissan’s chief executive, Makoto Uchida.

The two Japanese automakers made a commitment to explore a strategic partnership for electric vehicles ( EVs ) in March.

” The discussions started because we think we must develop skills to combat them, including the current emerging troops, by 2030,” the statement read. Then we will be beaten”, said Mr Mibe.

He added that the agreement was never intended to save Nissan, which has been struggling with declining income.

In November, Nissan said it will cut around 9,000 jobs as it slashes global production to tackle a drop in sales in China and the US. The cuts mean its global production will be reduced by a fifth.

After the imprisonment of longtime chief administrative Carlos Ghosn, Nissan, a once a symbol of Japan’s auto industry, has spent the past few years trying to regain its foundation.

Mr. Ghosn was accused of financial wrongdoing when he fled Japan in 2019 and is currently the subject of an Interpol Red Notice, a request to law enforcement around the world to locate and apprehend a man.

Mr Ghosn, now in Lebanon, told writers in December that Nissan’s consolidation programs were an act of anxiety and anguish.

Mr. Mibe claimed that any consolidation may be reliant on Nissan’s return.

Honda and Nissan made a commitment to work together on capacitors and other technologies in their Automotive firms in March, and in August, they reaffirmed their commitment to cooperate.

But, any agreement is likely to face significant democratic scrutiny in Japan because it could lead to job losses, and Nissan is likely to end its relationship with Renault, a French automaker.

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SingPost sackings: ‘Unprecedented’ for a Singapore firm to fire 3 top executives, shows severity of issue, say experts

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Value OF SACKINGS

Mr. Lai claimed that a board’s decision to fire three senior executives at once indicated that the situation was “irreparably egregious” and that keeping the pair would have been “untenable for the business.” &nbsp,

Due to the seriousness of the consequences, particularly when they become publicly known, such a decision must be carefully thought out and implemented by the committee, according to Mr. Lai, who added that the action may result in customers and investors losing trust in the business. &nbsp,

On the other hand, Prof. Loh of NUS described the activity as “decisive corporate governance action against administration lapses” that may help foster board confidence as it establishes that the board has control over its management.

” This is a case where corporate governance trumps management”, he said. &nbsp,

SingPost’s earlier setbacks may even explain its choice, Prof Loh said. SingPost has recently been fined for company lapses and received a harsh reminder in 2019 after a cabbie with special needs dumped sealed mail. &nbsp,

According to Prof Loh,” SingPost has experienced a number of instances of company lapses, or even accidental foster behavior in recent years, so I think there’s a need to give a message that trust is a very important element for this business.” &nbsp,

In 2019, SingPost was fined S$ 100, 000 ( US$ 74, 000 ) for&nbsp, failing to meet service standards.

The post service company made the mistake in May 2017, when the company failed to meet the minimum standard for the next working day’s supply of simple native words within the central business district.

SingPost also&nbsp failed in its efforts to deliver basic words and registered email over the course of several months in that year.

” The critical issue is ( the organisation’s ) … nature where service culture, trust in delivery is fundamental to the business”, Prof Loh added. &nbsp,

NTU’s Assoc Prof Law said SingPost’s event highlighted the need for businesses to have “formal, strong internal approach” for reporting.

Companies should evaluate their internal control methods and reporting programs. He continued,” If companies don’t have one, they might want to consider implementing a robust and formal system for handling internal concerns and suggestions.” &nbsp,

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