The geopolitics of modern technologies and the new phase of hybrid war against China is a topic that has gained increasing attention in the recent years. The rapid development and diffusion of advanced technologies, such as artificial intelligence, biotechnology, quantum computing, and 5G, have created new opportunities and challenges for the global order, especially for the two major powers, the United States and China. We will explore the following aspects of this complex and dynamic issue:

• What is the Indo-Pacific Economic Framework (IPEF) and what are its objectives and implications?
• How does the semiconductor industry play a key role in the technological competition and the security situation in the Taiwan Strait?
• What are the potential scenarios and risks of a hybrid war between the US and China, and how can they be prevented or mitigated?

What is the Indo-Pacific Economic Framework (IPEF)?

The IPEF is a new economic initiative launched by the US President Joe Biden on May 23, 2022, with the participation of 14 countries in the Indo-Pacific region, namely Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, the United States, and Vietnam. According to the official statement, the IPEF aims to counter China’s economic dominance, enhance the resilience of supply chains, and address the possible shortage of semiconductors in the future.

The IPEF is based on four pillars: fair and resilient trade, supply chain resilience, infrastructure, clean energy, and decarbonization, and fair economy. The IPEF partners have agreed to cooperate and communicate on these issues, and to negotiate specific agreements under each pillar. The IPEF is seen as an alternative to the Trans-Pacific Partnership (TPP), which the US withdrew from in 2017, and a counterbalance to the Regional Comprehensive Economic Partnership (RCEP), which is a trade agreement signed by 15 countries in the Asia-Pacific region, including China, in 2020.

The IPEF is also part of the Biden administration’s broader strategy to strengthen ties with allies and partners in the Indo-Pacific region, and to tackle the 21st-century economic challenges posed by China. The IPEF reflects the US recognition of the strategic importance of the Indo-Pacific region, which is home to more than half of the world’s population, 60% of the world’s GDP, and some of the most dynamic and diverse economies in the world. The IPEF also demonstrates the US commitment to uphold the rules-based international order, promote free and fair trade, and support the development and security of the region.

However, the IPEF also faces some challenges and criticisms. Some analysts argue that the IPEF is not ambitious or comprehensive enough, as it does not include a uniform lowering of tariffs or a binding dispute settlement mechanism. Some also question the feasibility and effectiveness of the IPEF, given the diversity and complexity of the participating countries, and the lack of a clear timeline and roadmap for the implementation of the agreements. Moreover, some observers warn that the IPEF could exacerbate the tensions and rivalry between the US and China, and create a new divide in the region.

How does the semiconductor industry play a key role in the technological competition and the security situation in the Taiwan Strait?

Semiconductors, or chips, are the essential components of modern technologies, such as computers, smartphones, cars, and military equipment. They enable the processing, storage, and transmission of information and data, and are the basis of innovation and competitiveness in various sectors and industries. The semiconductor industry is therefore a critical and strategic industry for the global economy and security.

The semiconductor industry is also a highly concentrated and competitive industry, with a few dominant players and suppliers in the world. According to the International Trade Administration, the global semiconductor market was valued at $440 billion in 2020, and the top five companies accounted for 53% of the market share. The US is the largest producer and consumer of semiconductors, with a 47% market share, followed by China with 15%, South Korea with 10%, Japan with 8%, and Taiwan with 7%.

However, the semiconductor industry is also facing some challenges and uncertainties, such as the increasing demand and complexity of chips, the rising costs and risks of research and development, the disruption of supply chains due to the COVID-19 pandemic, and the geopolitical tensions and trade restrictions between the US and China. The semiconductor industry is also at the center of the technological competition and the security situation in the Taiwan Strait, where the US and China have conflicting interests and claims.

Taiwan is the undisputed leader in the semiconductor industry, especially in the advanced chip manufacturing segment. Taiwan’s two giants, TSMC and UMC, are the world’s largest and second-largest chip foundries, respectively, which provide chip fabrication services to other companies. TSMC and UMC control 20% of the global semiconductor production and 50% of the global foundry market. TSMC and UMC are also the main suppliers of chips to the US and China, as well as to other countries and regions.

Taiwan’s semiconductor industry is therefore a vital and valuable asset for the global economy and security, as well as for Taiwan’s own development and defense. However, Taiwan’s semiconductor industry is also vulnerable and exposed to the threats and pressures from China, which considers Taiwan as a renegade province and has not ruled out the use of force to achieve reunification. China has been increasing its military and diplomatic pressure on Taiwan, and has also been investing heavily in its own semiconductor industry, with the aim of reducing its dependence on foreign suppliers and challenging Taiwan’s dominance.

The US, on the other hand, has been supporting and protecting Taiwan, and has also been cooperating and collaborating with Taiwan on the semiconductor industry. The US considers Taiwan as a reliable and strategic partner and a democratic ally in the Indo-Pacific region, and has been providing Taiwan with security assistance and arms sales under the Taiwan Relations Act. The US has also been working with Taiwan to enhance the resilience and security of the semiconductor supply chains, and to prevent the transfer of advanced chip technologies to China.

The semiconductor industry is therefore a key factor and a potential flashpoint in the US-China rivalry and the Taiwan Strait crisis. The semiconductor industry is not only a source of economic and technological competition, but also a target and a tool of hybrid warfare, which involves the use of various means and methods, such as cyberattacks, sabotage, espionage, sanctions, and propaganda, to achieve political and strategic objectives. The semiconductor industry is also a potential trigger and a casualty of a military conflict, which could have catastrophic consequences for the global economy and security.

What are the potential scenarios and risks of a hybrid war between the US and China, and how can they be prevented or mitigated?

The US and China are engaged in a hybrid war, which is a new form and phase of warfare that combines conventional and unconventional, kinetic and non-kinetic, military and non-military, and overt and covert actions, to achieve political and strategic objectives. The hybrid war between the US and China is driven by the structural and ideological factors, such as the power transition and the Thucydides trap, the clash of values and interests, and the quest for leadership and legitimacy, in the context of the changing and challenging global order.

The hybrid war between the US and China is manifested and conducted in various domains and dimensions, such as the economic and trade war, the technological and innovation war, the information and propaganda war, the diplomatic and ideological war, the legal and normative war, and the military and security war. The hybrid war between the US and China is also influenced and complicated by the involvement and interaction of other actors and factors, such as the allies and partners of the US and China, the regional and international organizations and institutions, and the global and transnational issues and challenges.

The hybrid war between the US and China could escalate

The hybrid war between the US and China is a complex and dynamic phenomenon, which poses significant risks and challenges for the global economy and security, as well as for the US and China themselves. The hybrid war between the US and China could escalate and intensify, leading to a vicious cycle of confrontation and conflict, and potentially to a hot war, which could be devastating and destructive for all parties involved. The hybrid war between the US and China could also destabilize and polarize the global order, creating a new divide and disorder, and undermining the cooperation and coordination on the common and shared problems and threats.

The hybrid war between the US and China is not inevitable or irreversible, however, and can be prevented or mitigated, through various measures and mechanisms, such as dialogue and communication, confidence and trust building, rules and norms setting, cooperation and collaboration, and management and resolution. The hybrid war between the US and China can also be transformed and transcended, through a new vision and paradigm, such as the concept of a community of shared future for mankind, which emphasizes the interdependence and mutual benefit, the diversity and inclusiveness, and the peace and development, of the global community.

Conclusion

The geopolitics of modern technologies and the new phase of hybrid war against China is a topic that has profound and far-reaching implications for the global economy and security, as well as for the US and China themselves. The IPEF and the semiconductor industry are two important and illustrative examples of how the US and China are competing and confronting each other in the technological domain, and how this competition and confrontation could affect the regional and international situation, especially in the Taiwan Strait.

The hybrid war between the US and China is a complex and dynamic phenomenon, which poses significant risks and challenges, but also offers opportunities and possibilities, for the global order and the global community.