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by oneoff786
1344 days ago
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It’s an interesting move. Amidst a strengthening US dollar, a sharp drop in Chinese food security that will likely depend on the US, and a pretty severe real estate crisis unfolding in China; China’s economic leverage has likely done a 180 and begun to look very vulnerable. Removing dependence on China for things, increasing China’s dependence on an independent and functional Taiwan, and just generally establishing pecking order is probably a really strong geopolitical move. I would expect that China is further shy of making serious retaliations at the moment due to dependence for food and fear of manufacturing moving to India. |
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It was an US unilateral move after CHIPS4 couldn't agree on export controls that basically killed 1/3 of their semi revenue, i.e. it seems more like US desperation after being unable to get East Asian semi on board after realizing merely "sprint" strategy wasn't enough to stay ahead of PRC, but must sprint and hobble. To me it looks like essential admission that PRC will make it sooner than later, and now US is trying to buy time at all cost despite lack of cooperation from allies who will most likely start de-americanizing supply chains for that 400B PRC semi pot.
>dependence on TW >shy of making serious retaliations
The opposite is happening, US trying to cut PRC Off TW semi that US is 90% dependant in. So PRC now has more incentive to meddle with fabs on the island to disrupt US high tech at little cost to her own industry. I expect we're trending towards developments that will end in PRC disrupting TW fabs in the coming years to destablize US supply chains. Otherwise PRC leverage is still the same, she still has calorie food sufficiency, with now guaranteed long term supplies (grains + fertilizer) from RU. Managable real real estate crisis still being managed. Meanwhile PRC still has controls over most of supply chains and rare earth production, F35 made from PRC metals just got waiver. The reality is, PRC hasn't made serious retaliations so far because it didn't want more high tech decoupling, but once decouple past certain point, PRC hands will become freer to retaliate. We'll have to see TSMC/Samsung and other if waivers stop next year.