In the same piece
, Thompson discusses another favourite TiB topic: the geopolitics of the semiconductor industry (see TiB 158
). The US faces a strategic choice on its technology policy with respect to China. As we’ve noted before, the US has used its control of the semiconductor supply chain to prevent China from accessing the technology needed to manufacture the most advanced chips (see TiB 174
on ASML). This is both a constraint on China’s technological development and, as we discussed in TiB 161
, perhaps increases the expected cost of any invasion of Taiwan. Now Putin has reportedly
asked China for military equipment to support the war in Ukraine. Is the semiconductor supply chain a lever the US can pull to influence Chinese policy at a moment of high stakes?
As Thompson notes, there is a real tension between the US’s short-, medium- and long-term goals. In the short run, relaxing restrictions on Chinese semiconductor companies might
nudge China away from actively aiding Russia today (though surely there is a much bigger picture for China to consider, as this excellent piece
shows). Any relaxation does, however, strengthen China’s medium-term technological (and military) capabilities. But in the long run, the tighter the US’s grip on the semiconductor supply chain, the greater the incentive for China to develop completely independent capabilities and render this element of US strategy impotent (though, of course, as we discussed in TiB 185
, this is China’s goal in any case).
In thinking these things through, it’s worth revisiting Adam Tooze’s excellent essay from last year, “The New Age of American Power
”, which we discussed in TiB 182
. Tooze argues that the core thesis of US grand strategy today is that it can its use technological dominance to “decouple” geopolitical power from GDP - a metric on which the US is doomed to fall behind over the long run, barring some big changes
. If that’s right, it seems unlikely that America would be willing to offer loosening of restrictions as a carrot for short-term cooperation on Russia. More likely, if anything, is the threat of tightening sanctions
if China intervenes too openly on Russia’s side. One to watch.