Opinion: Top CCP Economist Calls on China to Seize Taiwan Chipmaker TSMC

Belligerent Chinese rhetoric meets vital American interests
June 23, 2022 Updated: June 23, 2022


Earlier this month, Chen Wenling, the chief economist of China Center for International Economic Exchange, a state-run Chinese think tank, proposed that China “recover Taiwan” and seize Taiwan Semiconductor Manufacturing Co. (TSMC) if the United States and the West imposed sanctions on China akin to those that have been imposed on Russia.

TSMC is a contract manufacturer for other tech companies. It does not produce its own competing chips. But the chips it manufactures, for Intel and others, are among the world’s most advanced. It is strategically important to the U.S. and global economy and mission critical to America’s high-tech weapons arsenal.

Washington has moved to reshore chip manufacturing. In the 1980s and ’90s, 40 percent of chips had been produced here. Today, 80 percent of chips are made in Asia; the United States produces just 12 percent.

“They [TSMC] are speeding up the transfer to the U.S. to build six factories there,” Chen said.

“We must not let all the goals of the transfer be achieved,” she added in what could only be interpreted as an additional threat.

Words Alluding to War?

Beijing’s rhetoric, while always couched in feigned peaceful tones, has become increasingly belligerent since the pandemic. But given the context of Chen’s threat, it is downright alarming.

China’s defense chief, Wei Fenghe, told a conference of the International Institute for Security Studies (IISS) this month that “If anyone dares to secede Taiwan from China, we will not hesitate to fight. We will fight at all costs. And we will fight to the very end. This is the only choice for China.” (The complete address, as delivered, can be seen and read here.)

China’s Foreign Ministry spokesperson, Wang Wenbin, stated at a press conference that “the waters of the Taiwan Strait … are divided into several zones, including internal waters, territorial sea, contiguous zone, and the Exclusive Economic Zone. China has sovereignty, sovereign rights, and jurisdiction over the Taiwan Strait. At the same time, it respects the lawful rights of other countries in relevant waters.”

According to Wang, the Taiwan Strait is “70 nautical miles at its narrowest and 220 nautical miles at its widest.”

He claimed that “there is no legal basis of ‘international waters’ in the international law of the sea. It is a false claim when certain countries call the Taiwan Strait ‘international waters’ to find a pretext for manipulating issues related to Taiwan and threatening China’s sovereignty and security. China is firmly against this.”

“International waters” is a common law, or informal term, commonly accepted in commerce and navigation. It is more clearly defined with its other delimitations as illustrated in this chart from the U.S. State Department:

Epoch Times Photo

In U.S. parlance, “‘international waters’ include contiguous zones, exclusive economic zones [EEZs], and the high seas.” The contiguous zone extends beyond the 12 miles of a nation’s territorial waters seaward. Even if one were to accept China’s specious claim to Taiwan, it would leave 46 miles of the Taiwan Strait between China and Taiwan free for navigation at its narrowest point (for example, 70 NM less the 12 NM of both Taiwan and China.)

But Wang’s assertion that “China has sovereignty, sovereign rights and jurisdiction over the Taiwan Strait” potentially limits freedom of navigation through the Taiwan Strait, particularly by foreign warships. His phrasing that China “respects the lawful rights of other countries in relevant waters” is nebulous at best.

What are “lawful rights”? What defines “relevant waters”?

By China’s definition, the entire Taiwan Strait lies within China’s EEZ.

The fear is that statements like Wang’s and Chen’s could tumble out of control and lead to open hostilities.

The steps are clear, given Beijing’s increasing belligerence: First, Xi Jinping could use the People’s Liberation Army Navy (PLAN) to impose a quarantine and prohibit foreign warships from traversing the Taiwan Strait. The United States would then almost assuredly impose sanctions against China for denying access to the strait. Then, China would move to “seize control” of TSMC, as Chen indicated, as a consequence of the sanctions.

Were Beijing to quarantine the Taiwan Strait, what follows is almost automatic. As Barbara Tuchman wrote, perhaps apocryphally, of the Schlieffen Plan in “The Guns of August,” once the mobilizations of the summer of 1914 commenced, events overwhelmed politics, and warfare became inevitable. That could happen in the Taiwan Strait.

To Walk Back War

TSMC is a vital American interest, as vital to American commerce and defense as the Panama Canal. It cannot be lost, and it will not be surrendered.

Taiwan has been effectively independent of China for nearly 75 years. Assertions that it is “part of China” are essentially unilateral dogma of the Chinese Communist Party. While the United States acquiesced to a “one China” policy over 40 years ago with the Taiwan Relations Act, we did so to avoid confrontation and maintain the status quo.

But now, Beijing is seeking to alter the status quo and creating tension with its rhetoric and threat to seize TSMC, an interest vital to the American economy and defense.

I’ve written earlier to concur with foreign policy experts that the United States should abandon “strategic ambiguity” for “strategic certainty”; that is, we should affirm our intent to defend Taiwan from Chinese attack. Doing so would, essentially, bring matters to a head; to maintain the status quo if the CCP rescinds its rhetoric and threats or to set the stage for further confrontation.

It would be the CCP’s choice.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

J.G. Collins
J.G. Collins is managing director of the Stuyvesant Square Consultancy, a strategic advisory, market survey, and consulting firm in New York City. His writings on economics, trade, politics and public policy have appeared in Forbes, the New York Post, Crain’s New York Business, The Hill, The American Conservative, and other publications.