by kleinbl00

The second thing was that while they were forging ahead in terms of network platforms, and particularly FinTech, where China leads the U.S., they failed to appreciate (and this was a huge strategic mistake) that they were heavily reliant on the import of semiconductors and would not be able to quickly catch up and become self-sufficient in that area. The Achilles heel of Chinese power is that they have to import the high-end semiconductors from places like TSMC [the Taiwanese semiconductor giant that manufactures for many American firms]. And there is very little prospect, despite the ambitions of Made in China 2025, that China will get anywhere close to self-sufficiency by 2025. In January, I talked with someone from TSMC about the gap between the mainland and Taiwan in this respect, and he said, “You know, they’re five years behind us. But five years ago, they were five years behind us. And five years from now, they will be five years behind us.” That was a really interesting insight. I tried to put this into my Cold War analysis. Unlike the first Cold War, there’s a sense in which this could be a pure tech competition without there necessarily being peripheral hot wars like Korea and Vietnam.