Jeremy Fleming, Director of Government Communication Headquarters – one of the three main intelligence agencies of Great Britain – said in a rare public speech at the think-tank Royal United Services on October 12, 2022, that the growing powers of Beijing were the “national security issue that will define our future,” said an Associated Press report from London. He said the Communist Party of China mandarins in Beijing wanted to gain strategic advantage by shaping the technological ecosystems of the world.
“When it comes to technology, the politically motivated actions of the Chinese state are an increasingly urgent problem we must acknowledge and address,” Fleming said. “Beijing is changing the definition of national security into a much broader concept. Technology has become not just an area for opportunity, for competition and for collaboration. It has become a battleground for control, for values and for influence.” The one-party system in Beijing sought to clamp down on the population of China and saw other countries as either potential adversaries or potential client states – to be threatened, bribed, or coerced.
He called on Western firms and researchers to toughen the means for protecting intellectual property and for democratic countries to develop alternatives that could prevent developing nations from mortgaging their future by buying into the Chinese vision for technology. He said the democracies of the world could not afford to fall behind in cutting-edge fields such as quantum computing and drew attention to the potential weakness of the liberal democratic world over semiconductors, the critical chip used for everyday electronics.
He warned that Taiwan was the world leader in the production of semiconductors, and Beijing’s offensive actions in the Taiwan Straits could directly impact the future growth potential of the world by disrupting the vital supply chain. The design of Beijing to gain control of the semiconductor industry of Taiwan is, however, destined to fail, Taipei has assured.
Fleming warned that China sought to fragment the internet’s infrastructure to exert greater control. China was also seeking to use digital currencies used by central banks to snoop on users’ transactions to avoid future international sanctions, the likes of which have been imposed on Russia over its invasion of Ukraine. The BeiDou satellite system of China was an alternative to the widely used GPS navigation technology that could contain a powerful anti-satellite capability, to deny other nations access to space in the event of a conflict.
In 2021, the head of British overseas intelligence agency M16 Richard Moore called China “one of the biggest threats to Britain and its allies.” In 2020, then British Prime Minister Boris Johnson banned Chinese tech firm Huawei as a security risk, asking it to be stripped out of the 5G telecom network of the UK by 2027 after the USA too had banned Huawei.
As reported by AP, the intelligence advisory of federal officials of the United States has drawn attention to another dimension of Beijing’s attempts to exert control abroad. In the run-up to the mid-term elections in the USA due on November 8, 2022, China is interested in undermining American politicians it sees as threats to the interests of Beijing. The efforts of Beijing are to influence select races to hinder candidates perceived to be particularly adversarial to Beijing and sow mistrust in the democratic process of America. Overall, China’s efforts focus on shaping policy perspectives rather than electoral outcomes. It is trying to undermine a subset of candidates that Beijing sees as opposed to its policy interests. On March 16, 2022, the US Department of Justice announced that five operatives of the Chinese secret police had been charged for “orchestrating a campaign to undermine the US Congressional candidacy for a seat in New York of a US military veteran who was a leader of the 1989 pro-democracy demonstrations in Beijing,” following the Tiananmen Square massacre. Since 2017, The Australian government has also scrutinized the Chinese government’s attempts to support legislators or candidates who have spoken in favor of Beijing’s stance on issues.
Senior fellow at the Washington-based think-tank MartijnRasser was quoted in FoxBusiness.com saying, “By gaining control over Taiwan’s semiconductor industry, China would control the global market. They would have access to the most advanced manufacturing capabilities, which is even more valuable than controlling the world’s oil.” Taiwan is the largest and the most sophisticated microchip maker in the world. These chips power the cars, phones, and computers of the world. A global chip shortage in the wake of the pandemic has hurt the sales of Apple, Samsung, and Caterpillar. At the heart of the “One China” rhetoric could, therefore, be the control of “ground zero” of global technology competition.
Recently, the White House blacklisted seven Chinese companies to keep the largest chipmaker in the world, the Taiwan Semiconductor Manufacturing Company (TSMC), from selling advanced microchips to China. These chips would have been used to make advanced weapons as well, said officials while announcing the sanctions. An article in Global Times, the mouthpiece of the Communist Party of China, has commented that Beijing is worried that it will be difficult for TSMC to defy Washington as US companies and institutions are significant stakeholders in TSMC.
Beijing continues to lag in the domestic manufacture of computer chips and relies on imports. In a joint address to Congress, US President Joe Biden said, “In my discussion with President Xi, I told him we welcome the competition. We’re not looking for conflict. But I made absolutely clear that we will defend America’s interests across the board.”
US Senator Tommy Tuberville, a Republican, has been quoted as saying, “Taiwan is a serious area of interest not only because of what they represent as a people but the democracy they embrace. The free world should be concerned about the pivotal role they play in the semiconductor industry. It would be a miscalculation for China to believe they can ingest Taiwan.” Stephen Biegun, Deputy Secretary of State of former US President Donald Trump, has been quoted as saying, “We need to make it much more clear to the Chinese that they will be defeated if they seek to change the status of the Taiwan Straits. We are not going to go to war if there is a leveraged buyout of the TSMC. But certainly this will add to our concern.”]
The US move to blacklist seven Chinese companies has clearly hit Beijing where it hurts. Global Times has said in the report: “The US government has been exerting pressure on Asian countries and regions, especially China’s Taiwan region, to hobble the Chinese mainland’s chip industries. The US is eyeing the Taiwan islands as a ‘sally port’ to meet its ends and some Taiwan politicians have shown an inclination to comply with US orders under the latter’s pressure.”
The technology export controls imposed by the Biden administration, like “a ban on shipments to China of certain semiconductor chips made anywhere in the world with US equipment,” threatens to “wreak havoc in the highly globalized chip supply chain,” says the Global Times article. “On the surface, the US wants to protect the security of the semiconductor supply chain by revitalizing local semiconductor manufacturing and preventing the rise of the mainland. But its policy measures are nothing more than undermining the stability of global semiconductor supply chains.”
The article quoted an associate professor at the Institute of Taiwan Studies under Tsinghua University in Beijing that the global chip industry chain may abandon integration and return to a fragmented structure in the future.
TSMC chairman Mark Liu has reassured that “nobody can control TSMC by force.” In an interview with CNN, he said a Chinese invasion of Taiwan would render the factories of TSMC “non-operable” and create “great economic turmoil” on both sides of the Taiwan Strait. If China invaded Taiwan, there would be “no winners.” The extreme sophistication of the plants of TSMC requires a real-time connection with partners worldwide in matters ranging from raw materials and chemicals to spare parts and software. China accounts for 10 percent of the revenue of TSMC, and an interruption in the operations of TSMC would “create great economic turmoil” in China, where “suddenly their most advanced components would disappear.” With the emphasis of the economy of Taiwan on global collaboration, trust, and openness, “the Chinese will never be able to take over the Taiwanese economy,” Liu has assured. If China invades, “they will find they have taken over nothing.”