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11. A Seismic Shift: The New U.S. Semiconductor Export Controls and the Implications for U.S. Firms, Allies, and the Innovation Ecosystem

Author:
Sujai Shivakumar, Charles Wessner, and Thomas Howell
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
On October 7, 2022, the Department of Commerce’s Bureau of Industry and Security (BIS) announced sweeping revisions to its export controls, which are aimed at restricting China’s ability to obtain certain high-end semiconductor devices with potential military applications, develop and maintain supercomputers, and manufacture advanced semiconductor devices. This announcement, the most expansive export control action in decades, represents a fundamental shift in the traditional strategy underlying the U.S. and allied export control regime. As National Security Advisor Jake Sullivan put it , until now, “we previously maintained a ‘sliding scale’ approach that said we need to stay only a couple of generations ahead. That is not the strategic environment we are in today. Given the foundational nature of certain technologies, such as advanced logic and memory chips, we must maintain as large of a lead as possible.” In effect, the new measures are intended to dramatically slow, if not freeze Chinese developmental capability.
Topic:
Science and Technology, Innovation, Rivalry, and Semiconductors
Political Geography:
China, Asia, North America, and United States of America

12. CCP Inc. in Portugal: China's Investments in Financial Services and the Reach of the Chinese Communist Party in the Private Sector

Author:
Andrew Polk
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
This “CCP Inc.” case study explores how an ecosystem of Chinese party-state actors enabled a range of state-owned and private Chinese companies to embed themselves in Portugal’s financial system, creating a foothold to widen China’s financial presence within the country and beyond. The report specifically focuses on Fosun International Limited, a subsidiary of the Chinese conglomerate Fosun Group, which became a key source of foreign direct investment in Portugal through strategic acquisitions that opened market access for Chinese firms. Fosun’s investments in Portugal provide insight into the Chinese Communist Party’s activism in shaping the business environment for private sector players, as the company’s international strategy faced the challenge of balancing alignment with state goals against a regulatory crackdown on private sector outbound spending.
Topic:
Finance, Investment, Private Sector, and International Competition
Political Geography:
China and Asia

13. A World in Crisis: The “Winter Wars” of 2022–2023

Author:
Anthony H. Cordesman and Paul Cormarie
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
t is obvious that the world now faces a wide range of potential wars and crises. What is far less obvious is the level of confrontation between the U.S. and its strategic partners with both Russia and China, the rising levels of other types of violence that are emerging on a global level, how serious these wars and crises can become, and what kind of future could eventually emerge out of so many different crises, confrontations and conflicts, and trends. These issues are addressed in depth in a new analysis by the Emeritus Chair in Strategy at the CSIS entitled A World in Crisis: The “Winter Wars” of 2022–2023. This analysis explores the risk on the basis that war does not have to mean actual military conflict. Here, it is important to note that avoiding or minimizing combat is scarcely peace. As Sun Tzu pointed out in the Art of War well over 2,000 years ago, “war” does not have to involve the use of military force or any form of actual combat. His statement that “the supreme art of war is to subdue the enemy without fighting” applies to every form of major military confrontation and gray area warfare between opposing powers. It recognizes that it is all too easy to predict dire outcomes from the War in Ukraine, the current arms races with Russia and China, and growing levels of violence and confrontation between other states. There is still a case, however, for examining the broader impact of the war, the growing intensity of the arms races with Russia and China, and the current overall patterns of global conflict as the world enters the winter of 2022-2023. It is already clear that this will be a deeply troubled winter in many areas of the globe, that the level of confrontation between major powers has risen sharply, that they do seek to subdue the enemy without fighting, and their rivalry has become the equivalent of political and economic warfare. It is equally clear that the wide range of lower-level conflicts between other powers, their civil wars, and the abuses many governments commit against their own citizens are also intensifying, although many of these conflicts have been going on in some form for years or even decades. In far too many cases, the world is not moving toward peace. It is moving towards repression and war. Accordingly, this analysis argues that the world already faces a series of possible and ongoing “Winter Wars” in 2022-2023 that may not escalate to open military conflict but that are wars at the political and economic level and in competition to build-up more lethal military forces both for deterrence and to exert political leverage. It also shows that these “Wars” already pose serious risks and could escalate sharply and in unpredictable ways for at least the next five to ten years.
Topic:
Security, Military Strategy, Rivalry, and Competition
Political Geography:
Russia, China, Europe, Asia, North America, and United States of America

14. U.S.–China Relations in the Tank: A Handbook for an Era of Persistent Confrontation

Author:
Michael J. Mazarr
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
Edited by Jude Blanchette of CSIS and Hal Brands of SAIS, the Marshall Papers is a series of essays that probes and challenges the assessments underpinning the U.S. approach to great power rivalry. The Papers will be rigorous yet provocative, continually pushing the boundaries of intellectual and policy debates. In this Marshall Paper, Michael J. Mazarr argues that amid escalating U.S.-China tensions, American policymakers are gravely underprepared to manage the episodic crises that form an inevitable part of great power rivalry. Effective crisis response can not only prevent escalation, but also strengthen U.S. strategic advantage within the larger rivalry. Drawing lessons from the Cold War, Mazarr distills six principles to guide crisis management among U.S. policymakers navigating an increasingly crisis-prone U.S.-China relationship.
Topic:
Security, Rivalry, Strategic Interests, and Competition
Political Geography:
China, Asia, North America, and United States of America

15. A Green Wave?

Author:
Jessica Drun
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
Edited by Jude Blanchette of CSIS and Hal Brands of SAIS, the Marshall Papers is a series of essays that probes and challenges the assessments underpinning the U.S. approach to great power rivalry. The Papers will be rigorous yet provocative, continually pushing the boundaries of intellectual and policy debates. In this Marshall Paper, Jessica Drun examines how political and identity trends within Taiwan are likely to affect cross-strait relations. Primarily a reaction to assertive actions and policies from Beijing, Drun argues, these trends are moving away from Beijing’s preferences and in Drun’s view are likely to fuel rising PRC belligerence through 2027 and beyond. With this in mind, she suggests the United States should proceed with a long-overdue review of its Taiwan policy, built on a more nuanced understanding of domestic political realities within Taiwan, changes in the cross-strait military balance, growing PRC influence in international organizations, and the broader geopolitical environment.
Topic:
Security, Politics, Military Strategy, Conflict, and Strategic Interests
Political Geography:
China, Taiwan, and Asia

16. “Reunification” with Taiwan through Force Would Be a Pyrrhic Victory for China

Author:
Jude Blanchette and Gerard Dipippo
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
Many commentators and officials speculate about Beijing’s plans to compel “reunification” with Taiwan. Much of the existing commentary focuses on how or when a Chinese attack on Taiwan could occur, but there is little discussion of the nonmilitary consequences of such a scenario for China and the world. This brief explores the implications of a Chinese attack on Taiwan based on reasonable, albeit speculative, assumptions. When considered more holistically, the implications of an attack on Taiwan would be grim for Beijing, even if Chinese forces “successfully” capture the island. China would probably be diplomatically and economically isolated from key advanced economies, and Chinese leader Xi Jinping would have to tread a narrow path to avoid dire consequences for China and the Chinese Communist Party (CCP) as a whole. This analysis helps clarify what could be at stake for the world and reaffirms the importance of deterring Beijing from contemplating such an attack on Taiwan.
Topic:
Security, Defense Policy, Military Strategy, and Conflict
Political Geography:
China, Taiwan, and Asia

17. Strategic Competition in the Financial Gray Zone

Author:
Heather A Conley, James Andrew Lewis, Eugenia Lostri, and Donatienne Ruy
Publication Date:
04-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
Over the past 10 years, the U.S. government has slowly reoriented its foreign and security policy from the fight against global terrorism toward strategic competition with Russia and China. This reorientation has been accompanied by a new examination of how strategic competition will impact the integrity and future stability of the U.S. economy and financial system. One of the most important elements of strategic competition is sub-threshold warfare (also called asymmetric, hybrid, or gray zone warfare), wherein strategic competitors seek to shape the geostrategic environment in their favor, from information operations to economic warfare—which includes such tools as illicit finance and strategic corruption. Strategic competitors present a clear economic and financial threat to the United States when they operate in the emerging financial gray zone, in which malign actors can take advantage of the U.S. financial system to further their aims and disarm the country internally. The U.S. government, along with its allies, has only begun to acknowledge the sweeping nature of the financial gray zone and to reposition itself to compete within it. Because adversaries exploit the seams between the internal and external policies and authorities, Washington must have greater insights into a complex operating system and better integrate data across the many relevant agencies—in a way, connecting the financial dots. As it develops this comprehensive picture, the U.S. government should develop stronger defensive and offensive policy tools to counter this emerging threat.
Topic:
Economics, Finance, Strategic Competition, and Rivalry
Political Geography:
China, Asia, North America, and United States of America

18. Securing Asia’s Subsea Network U.S. Interests and Strategic Options

Author:
Matthew Goodman and Matthew Wayland
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
More than 1 million kilometers of submarine cables traversing the ocean floor, each about as wide as a garden hose, transmit up to 99 percent of international data, underpinning global trade and communication. This vital digital infrastructure faces myriad threats, from earthquakes and typhoons to fishing nets and saboteurs. The United States derives significant advantages from its centrality in Asia’s subsea cables, which contribute up to $169 billion to the U.S. economy annually and could benefit more U.S. workers and businesses as demand for digital products and services grows globally. But realizing those benefits will require the United States to step up its policy engagement on Asia’s cable networks, which are changing with China’s rise, the emergence of new regional hubs, and new transpacific routes designed to reduce risks and increase network resiliency.
Topic:
Security, International Trade and Finance, Communications, Maritime, and Commerce
Political Geography:
China and Asia

19. The Two Technospheres Western-Chinese Technology Decoupling: Implications for Cybersecurity

Author:
Center for Strategic and International Studies
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
Decoupling of digital innovation, systems, and data flows between Western nations and China is a growing global issue with high potential to destabilize the digital world. Through a series of workshops and an analysis of existing efforts, the Multilateral Cyber Action Committee (MCAC) has provided an assessment on the current status of technology decoupling and the growing divergence of the Western and Chinese technospheres. The report provides a set of recommendations for action to mitigate the growing cybersecurity risks posed by technology decoupling.
Topic:
Security, Science and Technology, Cybersecurity, and Rivalry
Political Geography:
China, Europe, Asia, and North America

20. Red Ink: Estimating Chinese Industrial Policy Spending in Comparative Perspective

Author:
Gerard Dipippo, Ilaria Mazzocco, and Scott Kennedy
Publication Date:
05-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
A new report by the CSIS Economics Program and the Trustee Chair in Chinese Business and Economics quantifies the size of total industrial policy spending by China and compares it to seven other major economies: Brazil, France, Germany, Japan, South Korea, Taiwan, and the United States. Much of the existing research on industrial policy focuses on its effects, but there are few, if any, published studies that attempt a systematic comparison and quantification of overall industrial policy spending. The heart of the report is the careful calculation of total industrial policy spending by China and the other economies, combining estimates from multiple tools, among them direct subsidies, tax breaks, below-market credit, and state investment funds. The report provides additional context by examining the historical trajectory of industrial policy of these economies and the evolution of industrial policy across these economies for three industries—aluminum, semiconductors, and electric vehicles. The historical and sectoral analyses point to some similarities across economies, but they also demonstrate how distinctive China has been in terms of both quantifiable spending and non-quantifiable policy tools. Finally, this report discusses several important policy implications, including greater transparency and more harmonized reporting about industrial policy spending and the potential ways in which policymakers could employ these data to more effectively limit industrial policy spending by China and other economies.
Topic:
Economics, Industrial Policy, Industry, and Labor Market
Political Geography:
China and Asia