Globalization Phase III/Friend-shoring/Indo-Pac Economic Framework (Don’t call it TPP!!)/China/etc…

Bunch of brain droppings I have considered posting multiple times as either individual threads or splicing into existing ones. Just gonna throw together into if not a coherent thread at least a catch all one.


1) New World Order?

We could legitimately be on the edge of a half-century to century level Int-Poly-Econ pivot.

It isn’t just Russia’s invasion (and the Rules Based Order’s collective and sustained repudiation of it) but also COVID and goes back further to some fundamental issues that have emerged from the last neo-liberal driven phase of globalization.

Turns out economic globalization without any economic, political or social guardrails can lead to some serious economic, political and social issues.

These issues along with the failure of ‘if we trade with them enough they’ll become like us’ (turns out we might just become more like them) combined with COVID disrupting international supply chains was causing some to question how useful having a ventilator rely on just on time logistics from 19 different factories in 14 different countries, not all of them our friends is the best way to set up our manufacturing sector (which we now know means our healthcare sector).

China especially proved to be problematic. Not only did their secrecy contribute to the early spread of the virus but then they strong armed PPE and other critical manufacturers to supply them first AND THEN even after it all calmed down their Zero COVID policy* has led to continuing supply chain issues and inflation.

This isn’t exactly new. We put together a framework to isolate China and force them to play by the rules under Obama (TPP). Unfortunately due to some flaws, some flawed messaging and bad timing we withdrew. Although hat tip to Shinzo Abe the majority of it (minus the stuff the US wanted no one else did) passed in most of the other countries as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership:

https://en.wikipedia.org/wiki/Compr...ent_for_Trans-Pacific_Partnership?wprov=sfti1

Now behind the scenes the Biden admin has been putting together something similar although in some ways more expansive than the TPP/CPTPP in that it includes India and Indonesia.

https://en.wikipedia.org/wiki/Indo-Pacific_Economic_Framework?wprov=sfti1

What I find interesting is about half the members overlap with the CPTPP meaning all common regs will have to line up with the CPTPP which by my understanding could back door us back into it the CPTPP at least in the sectors covered by both the IPEF and the CPTPP.

Anyway, in terms of getting the Rules Based Order all pulling as the same team this could be pretty important.

2) Specific China Sanctions/shunning/etc.

The US was successful in using diplomacy to get the rest of the Rules Based Order nations to recognize the danger of Huawei/CPC controlling their 5G networks and built a comprehensive sanctions regime that effectively froze them out.

Now are return to do the same when it comes to semiconductors. We have the CHIPS Act but it goes deeper. We don’t just want to produce more semiconductors domestically, we don’t want China to be able to produce them period.

We tried to get everyone on board for a Huawei style effort but it didn’t work out and now we are applying sanctions:

ASML, the Netherlands-based global leader in chipmaking equipment, has told its US staff to stop serving all Chinese customers while it assesses the sanctions​

https://twitter.com/dalperovitch/status/1580555963391934465?s=46&t=ezBgO9us8XHy9Xz9eJwScQ

Now my understanding is that this (putting sanctions on those that sell this equipment to China) is a bit of a flex of the US. The other chipmaker makers are all on board (and supportive, as they are in Taiwan, Japan and SK) with freezing out China but the Netherlands were a hold out on reaching an agreement.

Word on the street is that the US feels that with all that is going on in the European economy the NL isn’t in a great position and so this will get them to come back to the table.

3) China has overreached.

First was the Belt and Road backlash.

Lots of initial fanfare but the implementation has been ham fisted. Sometimes vanity projects (see Sri Lanka) and what aren’t are mostly aimed at resource extraction and shipment to China. Almost all projects require using Chinese companies and large portions of Chinese labor.

Turns out not to be the gift many thought and lots are backing out, some six to eight nations are either threatening to default or defaulting on the loans.

Xi’s recent behavior both internally (Hong Kong) and externally are also scaring/turning off neighbors.

Singapore’s top former diplomat says China has made 3 FP mistakes. 1. Prematurely giving up ‘hide your strength & bide time approach 2. Believing their own propaganda that US’ decline is absolute 3. No limits partnership with Russia becoming a liability.​

https://twitter.com/aditi_malhotra_/status/1580135107968397313?s=46&t=ezBgO9us8XHy9Xz9eJwScQ

*there is some speculation that even if it isn’t a cause of the Zero COVID policy, the reactions are definitely being treated by their general staff as a dry run for what will happen if/when they invade Taiwan and get cut off from Rules Based Order through sanctions etc.



So. Yeah. So far a link/thought dump. Finally starting putting thought to paper and am just gonna post and come back later. The OP needs a definite edit but fuck it we’ll do it live. WE’LL DO IT LIVE!

This sounds a bit hyperbolic but if it isn’t…


https://twitter.com/jordanschnyc/status/1580889341265469440?s=46&t=DUHu-ZSDeb3T7EBFgi7LBw

Holy shit.

Nothing fascist about threatening to take away people’s citizenship.

It's threatening prosecution. The penalty is the usual fines and/or jail time. If they want to keep working on giving China American IP, they can do so without fear of prosecution in the usual way, by renouncing their citizenship, same as any other American crime someone wants to commit overseas. That their Chinese employers are encouraging them to do so isn't on the US.

x100

You’re an intelligent human that in this sector definitely knows much more than me and has more connections into this stuff than I do.

Are we seriously just flexing the fuck out and saying no one can give China advanced semi-conductor manufacturing tech just… at all? Like just NO MORE SOUP FOR YOU! kinda shit? Is China being cut off from this tech? Can we do that and can it be sustained?

I freely admit this is getting out of my wheel house…

But also, if so, FUCK YEAH… the free world needs to have a serious conversation about the benefits of forced technology transfers v Chinese market access v creating an amalgamation market of multiple lesser developed nations that agree to operate by a Rules Based Order that is actually larger than the Chinese market…

And now I’m spent.

Be back later.

A good night to all and to all a good night…

Good night @Ancalagon

Here’s a very dry look at it. https://www.gibsondunn.com/us-new-e...tors-in-new-phase-strategic-tech-competition/

IANAL but it seems like the tweet thread might not have that hyperbolic.

Fuck yeah!

I dunno. Feels like this really ratchets up the pressure on the CCP to take Taiwan or at least destroy TSMC’s fabs to keep the rest of the world from getting further ahead. And to do it before the CHIPS Act fabs get up and running.

On the other hand now may be just the time. Russia is top of mind and showing just how complicated a war of conquest can be and that is when it is a land assault.

China doesn’t have the capacity now to pull it off and the type of preparations needed will take months to possibly years. And they are easy to see. There is no such thing a a surprise amphibious assault on a known target.

well that's just crazy talk

The illustration alone is worth sharing.



https://twitter.com/noahpinion/status/1581595773963104256?s=46&t=-5kMyfI0vUoXJNfi9gzAkQ

Good read:

https://twitter.com/jordanschnyc/status/1582050760757751808?s=46&t=B85ErVAHYHnM0M04mk6Rqw

I have friends asking me if I'm going to lose my citizenship. Lol, bro I'm just a teacher.

One Tweet asks why Chinese media hasn't reported on it. In addition to the normal situation where China media never reports anything negative or embarrassing about China or the CCP, they have their big quinquennial shindig this month, which demands extra control of media and narrative.

Those illustrations were actually from 2020, but have surfaced to support the "Dark Brandon" meme in recent months.

Zeihan on the semiconductor sanctions

One thing I’m still not clear on is just how advanced the chip tech has to be before it’s controlled. The export control on neural network chips (“AI chips”) is straightforward, but general purpose computing (CPUs) seems less so to me. One of the previous links said “above IOT level” but that seems hyperbolic. The Dutch EUV company shutting down Chinese operations is just one data point, and not super useful since EUV is both cutting edge and also 16 years old.

https://twitter.com/scienceisstrat1/status/1584975781713055744?s=46&t=7LpA_5oB10I6bWX-xf4iAg

The big winners? Vietnam and India.

FYI.
Tim Cook is:
First Mobilian to lead the largest corporation (by market cap) in the world.
First Alabamian to lead the largest corporation in the world.
First Queer Alabamian to lead the largest corporation in the world.
First Auburn Grad to lead the largest corporation in the world.

Oh so now you’re proud of your state?

If you haven’t noticed that I call out historic Alabamians more than any other person highlights people from their state then that just shows how little you pay attention.

Go run a search for:
Tim Cook
Rufus King
William Travis
Bo Jackson
George Washington Carver
Werner von Braun

with Ancalagon as the poster and see how many hits you get kid…

Von Braun is not a native, but whatever. You get your W.

And William B. Travis was born in South Carolina and didn’t move to Alabama until he was 9yo.

And he died in the Republic of Texas, commander of a flyspeck little mission turned fort named Alamo.

But we still claim him.

So what von Braun was a Nazi. He became our Nazi* and put an American on the moon so we claim him too.

*true fact we built von Braun and the other Nazi scientists we stole in Operation Paperclip (and their families) and then hid in (at the time) bumfuck Alabama an ice skating rink. When my class went to Space Camp for the first time was the first time I ever ice skated. For half a century it was the only rink in Alabama.

Exactly.

Eisenhower was born in Denison, Texas, but grew up in Kansas and is associated with that state.

Likewise, Lincoln was born in Kentucky but moved to Illinois as a teenager and will forever be associated with the latter state.

I said you got your W.

This will end well.

BAM!



https://twitter.com/mattyglesias/status/1618992059876257792

Another huge Biden/American win.