Taiwanese lessons for the American chip industry

• Taiwan’s chip ecosystem is home to hosts of small and medium-sized enterprises and strategic, local partnerships that drive technological advancements.
• Taiwan has also excelled thanks to deep pools of skilled labor.

America’s industry will have to invest in these areas as it looks to build out chipmaking at home amid fears of possible future supply chain disruptions, but challenges abound.

• U.S. companies and lawmakers should consider Taiwan’s approach, one of collaborative competition.
• Washington should implement federal initiatives to synchronize academia and industry through joint research and specialized workforce training.
• Urgently needed is an expansion of the U.S. H1B visa allocations to welcome more international semiconductor experts to America.

Former TSMC employee Margaret Siu lays out the case for emulating Taiwan in a new opinion piece.

Margaret Siu

China barred brokers from opening offshore trading accounts for new local clients, according to a document by the China Securities Regulatory Commission (CSRC) first seen by Reuters. The CSRC ordered Chinese brokerages and their offshore units to “close all new account opening channels for domestic investors” including onshore apps and websites, by October 31, according to a notice also seen by Bloomberg and the Financial Times.

India and China agreed to maintain peace along their disputed border at the 20th round of military chief-level talks on October 9–10. The Chinese defense ministry said today that the two sides had “a positive, in-depth, and constructive discussion on resolving the remaining issues” along the western part of their 3,488-kilometer (2,167-mile) border in “a mutually acceptable manner at the earliest possible date.” (India’s readout is here.)

China reached a tentative deal with Sri Lanka to cover about $4.2 billion of outstanding debt, the Chinese foreign ministry said on October 10. While further details are sparse, the deal, reached between Export-Import Bank of China and Sri Lanka late last month, has caught other major creditors including Japan, India, and the International Monetary Fund (IMF) by surprise. It also helps Sri Lanka get past the IMF’s first upcoming review to keep tapping funds from its $3 billion bailout program.

Fresh graduates can make roughly 18,592 yuan ($2,600) a month in China’s AI industry, the highest average salaries for Chinese university graduates this year and more than 40% over the levels seen in the past three years, according to a report by Chinese recruitment platform Liepin. It comes as Chinese companies race to lure in talent to help produce their own AI chatbot services, such as OpenAI’s ChatGPT or Baidu’s Ernie Bot.

Serbia is turning to Chinese arms suppliers as tensions build up along the border with Kosovo, its smaller Balkan neighbor. Imports of Chinese-made HQ-22 surface-to-air missiles and CH-92 armed drones worth $310 million made China Serbia’s top arms source in trade value in 2022, overtaking Russia in the wake of its invasion on Ukraine, according to the Stockholm International Peace Research Institute.

Chinese state media: The People’s Daily focuses on the Belt and Road today with two top front page stories: High-quality joint construction of the Belt and Road will make steady and long-term progress, and Xí Jìnpíng 习近平 will attend the third Belt and Road International Cooperation Summit Forum and hold related activities.

The Belt and Road Summit will be held in Beijing on October 17 and 18. Vladimir Putin and dozens of other world leaders are expected to attend.

Xinhua News Agency follows yesterday’s report and photo album of Xi Jinping visiting Jiujiang, Jiangxi Province with another short report and gallery of Xi looking at things while surrounded by adoring sycophants as he tours Jiangxi’s most famous town, Jingdezhen, the historic heart of China’s traditional porcelain industry.

• The new report unlocked “what used to be a black box,” surrounding the workings of China’s largest gold companies, said Laura Murphy, a professor of human rights and contemporary slavery at Sheffield Hallam University in England.
• Blackstone, State Street, Vanguard, Dell, Google, J&J, and Sony are among the more than 400 global firms linked to tainted supply chains detailed in the report.

Industry bodies have turned a blind eye to forced labor in gold mining in China by giving mining companies a clean bill of health, the C4ADS report said.

• The London Bullion Market Association (LBMA), the world’s leading standard-setting body for wholesale precious metals, gave the mining companies in question a clean bill of health in its assessments.
• Investment fund portfolios from companies like Blackstone and Vanguard include links to companies tainted by forced Uyghur labor, including some with headquarters in Xinjiang.

Ruth Ingram has the full story in her weekly column on Uyghur affairs.

Ruth Ingram

• In China, Simons encountered a lack of decent pitches, obstinate school headmasters, intransigent cadres, academically obsessed parents, and lackluster sponsors.
• The government wants success rates, medals, and trophies over the mass participation that fosters skilled players over the long term.
• The official view of sport is that it’s for national glory: The benefits of exercise, recreation, building teamwork and cooperation skills are all sidelined.

All the while, the continually dismal performance of China’s national team — most recently losing 1-0 to Syria last month — doesn’t exactly encourage hope.

Simons writes about it in the book Bamboo Goalposts, which is the latest entry in Paul French’s Ultimate China Bookshelf.

Paul French

Below are links from our NewsBase to other noteworthy reports published in the last 24 hours from and about China.

BUSINESS AND TECHNOLOGY:

Globalization isn’t over
Opinion: How commodity markets are defying the new cold war / FT (paywall)
Alan Beattie writes: “Rivalry between China and the U.S. over energy and minerals has not broken the global economy into blocs.”

Banking
Chinese state fund buys shares to support country’s biggest banks / Nikkei Asia (paywall)
“A Chinese government-backed fund has demonstrated its support for the nation’s four major state banks, buying their shares in the open market for the first time since mainland equities plunged in 2015.”
A bigger world bank takes on China’s clout / WSJ (paywall)
“For the past year, Treasury Secretary Janet Yellen has been circling the world seeking to breathe new life into a 79-year-old pillar of the U.S.-led international order: the World Bank.”

IPOs
China’s appetite for U.S. IPOs shows little sign of roaring back / Nikkei Asia (paywall)
“Chinese companies are slowly coming back to the U.S. for initial public offerings after a yearlong dry spell, but geopolitical tensions, underperforming market debuts and regulatory uncertainty cast doubts over how long America will remain their preferred overseas destination.”

Steel
China warns EU steel probe will push up costs / Reuters
“China said on Thursday that European Union plans to investigate its steelmakers over subsidies will disrupt global supply chains and fly in the face of international trade norms.”

TikTok bans
Judge to hear arguments from TikTok and content creators who are challenging Montana’s ban on app / AP
“A federal judge is scheduled to hear arguments Thursday in a case filed by TikTok and five Montana content creators who want the court to block the state’s ban on the video sharing app before it takes effect January 1.”

EVs and smartphones
NIO, Geely seek edge over competitors by linking smartphones with cars / Caixin (paywall)
“Electric vehicle (EV) startup NIO Inc. and fellow Chinese automaker Zhejiang Geely Holding Group Co. Ltd. are betting on smartphones that integrate closely with their cars as a way to stand out in a highly competitive market.”

AI
AI jobs with average of $2,600 per month top choices for Chinese graduates in 2023 amid record youth unemployment / SCMP (paywall)
“Jobs in the artificial intelligence (AI) sector have the highest average salaries for Chinese university graduates this year, according to a report released by Chinese recruitment platform Liepin.”

POLITICS AND FOREIGN AFFAIRS:

Police and military
China names Qi Yanjun as second-in-command of nation’s police force / SCMP (paywall)
“China has promoted Qí Yánjūn 亓延军 as the second-in-command of the country’s massive police force.”
Vanguard funds invest in China military groups, report says / FT (paywall)
“Vanguard, the world’s second-largest asset manager, is acting as a pipeline through which U.S. investment dollars are being funneled into Chinese military companies and corporations sanctioned over human rights abuses, according to a new report by a U.S. producers’ lobby group.”
Combat veteran is likely replacement for China’s missing defense minister / Reuters (paywall)
“General Liú Zhènlì 刘振立, the head of the military body responsible for China’s combat operations and planning, has emerged as the top contender to replace the country’s defense minister, who has not been seen in public for more than six weeks, according to five people familiar with the matter.”

Uyghurs
Opinion: China has sentenced Rahile Dawut to life in prison and would like the world to forget her. We must not / Guardian
Rachel Harris writes: “The respected Uyghur scholar became a powerful symbol of the devastation of that culture. Her imprisonment cannot go unchallenged.”

Taiwan
Taiwan urges progress on EU investment deal as bloc courts chip firms / Reuters
“A Taiwanese minister on Thursday urged the European Union to make ‘effective’ progress on talks on a long-stalled investment deal, as the bloc courts closer links to major chipmakers based on the tech powerhouse island, notably TSMC.”
Taiwan says awaiting U.S. announcement on China chip waiver extension / Reuters
“Taiwan was waiting for a decision by the U.S. government on whether Taiwanese chipmakers will be allowed a waiver extension to supply U.S. chip equipment to their factories in China, Economy Minister Wang Mei-hua [王美花 Wáng Měihuā] said on Thursday.”
China says sends fighter jets to warn US Navy plane in Taiwan Strait / Reuters
“China said on Thursday it had sent fighter jets to monitor and warn a U.S. Navy patrol aircraft that flew through the Taiwan Strait.”

U.S.-China competition and tensions
U.S. to attend Beijing defense forum in latest sign of improving ties / Reuters
“The U.S. says it has accepted an invitation to attend China’s top annual security forum in late October, the latest sign of potentially warming ties between the two countries’ militaries.”
U.S. working to stabilize China ties, envoy Nicholas Burns says while questioning Beijing’s peace efforts in Middle East, Ukraine / SCMP (paywall)
“​​The U.S. will continue communicating with China to find ways towards ‘peace and coexistence’ despite increasing competition, said its top envoy to Beijing, while at the same time questioning Beijing’s peace efforts in the Middle East and Ukraine.”
California-based Navy sailor pleads guilty to providing sensitive military information to China / AP
“A U.S. Navy sailor charged with providing sensitive military information to China pleaded guilty in Los Angeles on Tuesday to conspiring with a foreign intelligence officer and receiving a bribe, federal prosecutors said.”

U.S. and Chinese universities
Opinion: American and Chinese universities must reject calls to disengage / Nikkei Asia (paywall)
William C. Kirby writes: “By March 2020, the U.K. had overtaken the U.S. as the top choice for Chinese students studying abroad. For the first half of 2022, the number of U.S. student visas issued to Chinese nationals was more than 50% below pre-COVID levels. The political rhetoric of recent years has also contributed to a decline in students from China studying in the U.S.”

North Korea
China foreign ministry says no North Korean defectors in country / Reuters
“A Chinese foreign ministry spokesperson said on Thursday there were no ‘so-called defectors’ in China, in response to a question regarding a report saying China had deported North Korean defectors.”

Australia
Release of journalist unlikely to shift Australia’s China policy / Reuters
“The release of an Australian journalist after three years in a Chinese prison should improve the atmosphere for a visit by Australia’s prime minister but won’t shift its policies aimed at hedging against China’s military build-up, analysts said.”
Australian minister credits improved relations with China for the release of a detained journalist / AP
“Australia’s Foreign Minister Penny Wong on Thursday credited improved relations with China for the return home this week of an Australian journalist whose three-year detention in China in a murky espionage case had strained ties.”

Israel-Palestine
China’s Middle East envoy expected to speak to Israel on Thursday / Reuters
“China’s special envoy on Middle East issues is expected to have a telephone conversation with Israeli officials on Thursday, Israel’s Ambassador to China, Irit Ben-Abba, told Bloomberg News.”
China’s Middle East envoy tells Palestinian official that ceasefire is ‘top priority’ / SCMP (paywall)
“China stepped up its diplomatic efforts over the Israel-Hamas conflict on Wednesday, reaching out to the Palestinian Authority in a bid to facilitate a ceasefire.”
China condemns violence against civilians, Middle East envoy says / Caixin (paywall)

Middle East
China’s economic stake in the Middle East: Its thirst for oil / NYT (paywall)
“China is the largest oil importer by far from Saudi Arabia and from Iran, highlighting the risk it faces if the war in Israel and Gaza were to broaden.”

Sri Lanka
Sri Lanka says deal with Chinese bank covers $4.2 billion in debt / Nikkei Asia (paywall)
“Sri Lanka has reached an agreement with the Export-Import Bank of China to cover about $4.2 billion of the island nation’s outstanding debt, its finance ministry said in a statement on Thursday.”

Serbia
Serbia relies on China for weapons as tensions with Kosovo rise / Nikkei Asia (paywall)
“Serbia’s military is relying on Chinese arms suppliers as tensions ratchet up with its smaller neighbor Kosovo, seeking to fill the void left by Russian defense companies that are tooling up their own army against Ukraine.”

India
China, India hold military chief-level talks on border issues / Reuters
“China and India held the 20th round of military chief-level talks on October 9–10, the Chinese defense ministry said on Thursday.”
China-India border talks: dispute to be resolved ‘as soon as possible’ / SCMP (paywall)
India detains four on alleged links to Vivo money laundering probe / Caixin (paywall)
“Indian authorities arrested four individuals linked to China’s Vivo Mobile Communications Co. Ltd. on alleged links to a money laundering investigation targeting the company.”

Europe
It is time China started taking Europe more seriously, says EU foreign policy chief Josep Borrell SCMP (paywall)
“The European Union’s top diplomat is due to arrive in Shanghai on Thursday with a message for China: take us more seriously.”

SOCIETY AND CULTURE:

Shanghai’s history sheltering Jewish refugees
How Shanghai became an inter-war haven for European Jews fleeing persecution / SCMP (paywall)
“While traces of a Jewish presence in China can be found as early as the Han dynasty, which ended in the third century, the Nationalist government once seriously considered schemes to take in large numbers of Jews amid the turmoil of the interwar years.”

Chinese opera
Chinese opera on show / Caixin (paywall)
“Kunshan in East China’s Jiangsu province opened a new Chinese opera museum Wednesday.”