On semiconductors, export controls initially looked like a one-way lever for Washington. Two years on, the edge is duller. Huawei’s CloudMatrix 384 super-node and a 2,000-member “70 % self-sufficiency by 2028” consortium show how necessity has accelerated domestic substitutes rather than crippling demand. Every tightening round yields smaller marginal hits to China’s GDP, yet higher compliance costs for U.S. fabs.
Sharon Bush's lawyers questioned Neil Bush closely about the deals, especially a contract with Grace Semiconductor Manufacturing Corp., a firm backed by Jiang Mianheng, the son of former Chinese President Jiang Zemin, that would pay him $2 million in stock over five years.
Marshall Davis Brown, lawyer for Sharon Bush, expressed bewilderment at why Grace would want Bush and at such a high price since he knew little about the semiconductor business.
"You have absolutely no educational background in semiconductors do you?" asked Brown.
"That's correct," Bush, 48, responded in the March 4 deposition, a transcript of which was read by Reuters after the Houston Chronicle first reported on the documents.
Great analysis. Perhaps I’m too far removed to have any comment or maybe I’m too uninformed to have a grip on the nuances. But broadly speaking, the optimal U.S. strategy was to play for time and run China out on demographics. Slowly rebuild critical industries at home, push allies to the table on trade and military rebalancing, and repairing the fraying social fabric should be the generational goals through 2050. Maybe the U.S. doesn’t have that kind of time or maybe the costs are simply too high to concede China has the stronger immediate hand, but the current approach seems impulsive and outright destructive.
I guess my question is if I’m broadly right…why is this hard to see? I get that my broad strokes translate to really freaking hard choices on the tangible policy level (eg “repair social fabric”..rebalance SS/Medicare or “reduce military imbalance”…US has tried that nicely since at least 2005). But it just seems apparent this was the strategy to deploy.
Far from symmetrical. The current level of escalation already puts US on a path to a supply shock, and further escalation will deprive American businesses and individuals of a wide range of goods covering the tech spectrum from 1940s tech to present day. China OTOH will face minor supply impact, and these are already a done deal (eg having to make do with 6nm chips instead of 3nm), so not much further ability for US to escalate. On the demand side, if things continue to deteriorate, China faces an unremarkable recession, whereas US faces a great depression due to absence of intermediate goods and supply chain train-wreck causing business shutdowns.
"The US and China are locked in a global contest of power that is playing out along every dimension: economic, technological, military, cyber, soft power, global prestige. Both sides are searching for any tool, any weapon, any piece of leverage they can use against the other—short of direct military action."
Nah, the competition was declared by the US by saying it does not accept a more powerful country than itself. China was just working, working, working, learning, learning, learning while trying to improve the lives of its population.
So, as the Chinese spokespersone said, if you want trade war or any other war, we are ready for it... Are the Americans ready for it?!
Excellent analysis. Your point that emerging capabilities cut both ways echoes what I see in the PLA’s AI-enabled C4ISR push: smarter sensors tighten kill chains yet create brittle dependencies that a savvy opponent can exploit. I unpack those vulnerabilities in my latest post at Orders and Observations (https://ordersandobservations.substack.com/) would value your thoughts.
Interesting graph, Kyle. I've been thinking about something similar recently but for how Europe could retaliate against Trumpian coercion. Perhaps of interest:
Love this analysis
On semiconductors, export controls initially looked like a one-way lever for Washington. Two years on, the edge is duller. Huawei’s CloudMatrix 384 super-node and a 2,000-member “70 % self-sufficiency by 2028” consortium show how necessity has accelerated domestic substitutes rather than crippling demand. Every tightening round yields smaller marginal hits to China’s GDP, yet higher compliance costs for U.S. fabs.
From 2003 and it still blows my mind:
Sharon Bush's lawyers questioned Neil Bush closely about the deals, especially a contract with Grace Semiconductor Manufacturing Corp., a firm backed by Jiang Mianheng, the son of former Chinese President Jiang Zemin, that would pay him $2 million in stock over five years.
Marshall Davis Brown, lawyer for Sharon Bush, expressed bewilderment at why Grace would want Bush and at such a high price since he knew little about the semiconductor business.
"You have absolutely no educational background in semiconductors do you?" asked Brown.
"That's correct," Bush, 48, responded in the March 4 deposition, a transcript of which was read by Reuters after the Houston Chronicle first reported on the documents.
Great analysis. Perhaps I’m too far removed to have any comment or maybe I’m too uninformed to have a grip on the nuances. But broadly speaking, the optimal U.S. strategy was to play for time and run China out on demographics. Slowly rebuild critical industries at home, push allies to the table on trade and military rebalancing, and repairing the fraying social fabric should be the generational goals through 2050. Maybe the U.S. doesn’t have that kind of time or maybe the costs are simply too high to concede China has the stronger immediate hand, but the current approach seems impulsive and outright destructive.
I guess my question is if I’m broadly right…why is this hard to see? I get that my broad strokes translate to really freaking hard choices on the tangible policy level (eg “repair social fabric”..rebalance SS/Medicare or “reduce military imbalance”…US has tried that nicely since at least 2005). But it just seems apparent this was the strategy to deploy.
Far from symmetrical. The current level of escalation already puts US on a path to a supply shock, and further escalation will deprive American businesses and individuals of a wide range of goods covering the tech spectrum from 1940s tech to present day. China OTOH will face minor supply impact, and these are already a done deal (eg having to make do with 6nm chips instead of 3nm), so not much further ability for US to escalate. On the demand side, if things continue to deteriorate, China faces an unremarkable recession, whereas US faces a great depression due to absence of intermediate goods and supply chain train-wreck causing business shutdowns.
"The US and China are locked in a global contest of power that is playing out along every dimension: economic, technological, military, cyber, soft power, global prestige. Both sides are searching for any tool, any weapon, any piece of leverage they can use against the other—short of direct military action."
Nah, the competition was declared by the US by saying it does not accept a more powerful country than itself. China was just working, working, working, learning, learning, learning while trying to improve the lives of its population.
So, as the Chinese spokespersone said, if you want trade war or any other war, we are ready for it... Are the Americans ready for it?!
Kyle,
I am the chair of the Andrew W. Marshall Foundation. Jordan Schneider is one of our Fellow/Scholars. How do we get in contact?
Thank you for reaching out. My email is kylechan at princeton dot edu.
surprising NOT to see: US pushing(but not allowing) Taiwan independence on the 2x2 grid (low cost to US, high cost to China)
Excellent analysis. Your point that emerging capabilities cut both ways echoes what I see in the PLA’s AI-enabled C4ISR push: smarter sensors tighten kill chains yet create brittle dependencies that a savvy opponent can exploit. I unpack those vulnerabilities in my latest post at Orders and Observations (https://ordersandobservations.substack.com/) would value your thoughts.
Interesting graph, Kyle. I've been thinking about something similar recently but for how Europe could retaliate against Trumpian coercion. Perhaps of interest:
https://ecfr.eu/publication/brussels-holdem-european-cards-against-trumpian-coercion/#europes-cards