In response to Prime Minister Takaichi’s remarks regarding Taiwan, China has swiftly and rapidly applied pressure. It has halted seafood imports and called on Chinese citizens to refrain from traveling. It has also threatened to impose export restrictions on rare earths and other products. China’s latest measures are similar to those used in sanctions against the Philippines, Australia, and South Korea. This level of pressure is something we’ve seen before. Meanwhile, while China has systematically strengthened its economic and military power, the United States’ economic and military capabilities are weakening. Japan is no longer able to rely on its ally, the United States, in the face of threats. While China exerts strong pressure, the protection of the United States is unreliable. The second Trump administration has focused on pressuring its allies through tariffs and other measures rather than protecting them. The United States has become increasingly chaotic and fixated on short-term deals.
However, US politicians and business leaders are reexamining the fact that their domestic industry is overly dependent on potential adversaries, such as China. As a sign of this sense of crisis, the first Trump administration expanded export restrictions beyond US borders, covering almost the entire semiconductor supply chain. The subsequent Biden administration also furthered the Trump administration’s approach, strengthening export controls on high-performance semiconductors to China. Companies that manufacture using US-made equipment and materials now face these export restrictions. TSMC and Toshiba have been forced into a position that they could be subject to penalties if they supply semiconductors to Huawei.
China has suffered two shocks in the past few years. In 2013, former CIA employee Edward Snowden exposed US intelligence surveillance. Snowden’s revelations revealed that NASA not only engages in space exploration, but also eavesdrops on internet and mobile phone data worldwide. When IT companies develop encryption software, NASA also embeds trapdoors in the software. Working with developers and IT companies, the agency also embedded security holes in hardware and software. This revelation exposed China’s vulnerability to information surveillance. Since then, China has responded quickly. It has even begun using domestically produced smartphones and software to eavesdrop on its own citizens. Second, since 2018, the U.S. Department of Commerce has restricted exports to major telecommunications equipment manufacturers ZTE and Huawei. These export restrictions effectively prevented the two companies from procuring U.S. products necessary for their manufacturing. Since then, China has imported foreign technology and encouraged domestic investment, while also working to develop its own technological capabilities. Currently, strengthening both its national defense and economy appears to be realizing a long-held desire.
