Connect with us
//pagead2.googlesyndication.com/pagead/js/adsbygoogle.js (adsbygoogle = window.adsbygoogle || []).push({});

China

Semiconductor tensions chip away at cross-Strait relations

Published

on

A chip is pictured at the Taiwan Semiconductor Research Institute (TSRI) at Hsinchu Science Park in Hsinchu, Taiwan on 16 September 2022. (Photo: Reuters/Ann Wang)

Author: Yvette To, CityU

US House of Representatives Speaker Nancy Pelosi’s visit to Taiwan and President Joe Biden’s pledge that the United States would defend the island have escalated tensions in the Taiwan Strait. At the 20th National Congress of the Chinese Communist Party, President Xi Jinping stressed the importance of reunifying with Taiwan.

The escalating US–China technology rivalry and global chip shortage make Taiwan’s role as a leading global supplier of semiconductors strategically and economically important to both powers.

The question is what will happen to global chip production in the event of a cross-Strait military conflict. COVID-19 lockdowns have already disrupted global semiconductor supply. Since global semiconductor production capacity is highly concentrated in Asia, including in Taiwan, South Korea and China, a cross-Strait military conflict will crimp the global production of semiconductors. In a military confrontation, China might impose an embargo on Taiwan’s exports of critical technologies.

Taiwan is home to several of the world’s largest semiconductor foundries. Together they represent more than 63 per cent of the global market share. The world is heavily dependent on the Taiwan Semiconductor Manufacturing Company (TSMC), which produces more than 90 per cent of the world’s most advanced semiconductors, including 5-nanometre chips.

Supply disruptions will directly impact Apple — TMSC’s largest customer — Nvidia, Qualcomm and AMD. It will also disrupt leading US technology companies specialised in computer processors and chipsets that power modern devices, from consumer electronics and medical equipment to artificial intelligence and military technologies.

With supplies from Taiwan crimped in the event of a cross-Strait conflict, companies may have to look to South Korea for replacement chips. Samsung is the world’s second largest semiconductor foundry by revenue, accounting for approximately 17 per cent of the global market — a 35 per cent smaller share than TSMC. But the production capacity of South Korean foundries is unlikely to meet global demand and Seoul could be drawn into the conflict should the United States get involved.

Chinese foundries produce around 8 per cent of the world’s semiconductors. But even if Chinese companies maintain their semiconductor production in a cross-Strait conflict, the chips they can mass produce are mainly 28-nanometre and 14-nanometre chips. These are less sophisticated and powerful than the 7-nanometre and 5-nanometre made by TSMC and Samsung.

While there were reports in August 2022 that China’s Semiconductor Manufacturing International Corporation had made a great leap in successfully developing 7-nanometre chips, the company’s mass production capacity remains unknown. Indeed, the global semiconductor supply chain is complex and involves different stages of manufacturing demanding high-, medium- and low-skilled inputs. Any disruption will have knock-on effects on upstream and downstream industries.

Southeast Asian countries are also involved in semiconductor manufacturing. Malaysia packages and tests newly made semiconductors, accounting for 13 per cent of the global market share. Singapore operates fabrication plants for US-based Micron and GlobalFoundries and several assembly and testing facilities for Taiwanese companies.

Many industries rely on a stable supply of semiconductors, exposing them to the effects of a cross-Strait conflict. The automotive industry is still battling the global chip shortage that emerged in 2020. Over the past few years, automakers have competed with other consumer electronics providers over chips made in Asia. Some automotive giants have already cut production, while others expect the chip crunch to last into 2024. A military conflict involving the global hub of chip production will further strain the industry, creating knock-on effects on other parts of the automotive supply chain.

The effects of a cross-Strait conflict can be mitigated by strengthening supply chain resiliency. Some countries and companies have already started diversifying and securing their semiconductor supply chains. But diversification comes with a cost. The US Chips and Science Act uses federal subsidies to lure technology firms — including US, Taiwanese and South Korean companies — to invest in cutting-edge chip development and manufacturing in the United States. Companies are not allowed to build advanced chipmaking facilities in China for 10 years to receive these subsidies.

While reshoring and

Read the rest of this article on East Asia Forum

Continue Reading

China

Canberra ties the knot with Washington

Published

on

Canberra ties the knot with Washington

Abstract

Australia has shifted its strategy towards favoring the United States over China due to increasing fear of Chinese power and the competitive Indo-Pacific environment.

The ‘riding two horses’ strategy adopted by Canberra over the past 25 years has shifted in favor of the US alliance to counter China’s growing power. Previous prime ministers sought to balance relations between China and the US, with Kevin Rudd aiming for ‘true friendship’ with China while also promising military intervention if needed. Tony Abbott’s approach was driven by ‘fear and greed’, and John Howard acknowledged the benefits of a relationship with both countries.

However, Prime Minister Anthony Albanese has expressed a desire to strengthen the US alliance and cooperate with China while also engaging in Australia’s national interest. This shift is evident in actions such as sending a warship through the Taiwan Strait and introducing legislation to facilitate the AUKUS security partnership.

The Indo-Pacific environment has become more competitive, leading Australia to prioritize fear over greed in its alignment. As China’s GDP continues to rise and may overtake the US by 2030, Canberra’s strategy is likely to continue favoring alignment with Washington due to the lack of a viable alternative for addressing its fear of China’s power.

Read the complete article on East Asia Forum

Continue Reading

China

2024 China IIT Reconciliation: Appointment Through IIT App Opens on February 21st

Published

on

Annual IIT reconciliation for 2023 must be done from March 1 to June 30, 2024. Final tax settlement appointments must be made after February 21, 2024. The process involves checking and reporting on IIT paid and deducted in 2023 to calculate refundable or supplementary tax.


Annual IIT reconciliation for the year 2023 is required to be made during the period from March 1 to June 30, 2024. For those who need to make the final tax settlement between March 1 to March 20, they need to make an appointment after February 21, 2024.

On February 1, 2024, the State Taxation Administration (STA) issued the Announcement on Matters Relating to the Final Settlement of Individual Income Tax on Consolidated Income for the Year 2023 (the Announcement), clarifying matters related to the annual individual income tax (IIT) reconciliation for the year 2023.

Annual IIT reconciliation, or annual IIT settlement, is a process applied to individual taxpayers on their comprehensive income (an individual’s combined income of wages and salaries, remuneration from labor services, author’s remuneration, and royalties), to make sure their IIT paid in the previous tax year is accurate.

During the process, individual taxpayers will need to recheck their IIT paid and deducted in the tax year, calculate the refundable or supplementary tax payable, report to the tax authorities, and make the tax settlement.

In this article, we introduce key issues related to the annual IIT reconciliation in 2024 and the key changes as compared to previous years.

After the end of the year 2023, a resident individual is required to consolidate his/her four types of comprehensive income, namely wages and salaries, remuneration for personal services, author’s remuneration, and royalties obtained from January 1 to December 31, 2023, to compute the final tax payable amount. The taxpayer needs to deduct the prepaid tax amount in 2023 to obtain the tax refundable or the tax to be made up amount. Further, the taxpayer is required to declare to tax authorities for a tax refund or tax to be made up.

Tax Refundable or Tax to Be Made Up = [(Annual Comprehensive Income – RMB 60,000- Special Deductions – Special Additional Deductions – Other Deductions Determined Pursuant to the Law – Qualified Public Welfare And Charitable Donations) × Applicable Tax Rate – Quick Deduction] – Prepaid Tax Amount

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

Continue Reading

China

The Year of the Dragon brings record-breaking travel and consumption during the 2024 Chinese Spring Festival

Published

on

The Chinese New Year holiday saw a remarkable recovery in the tourist industry, with travel numbers and revenues exceeding 2023 and pre-pandemic levels. The Ministry of Culture and Tourism reported unprecedented growth, showcasing the industry’s resilience despite the COVID-19 pandemic.


The tourist industry registered significant growth during this year’s Chinese New Year (CNY) holidays, the first to be completely unaffected by the COVID-19 pandemic.

According to the latest figure released by the Ministry of Culture and Tourism, both travel numbers and tourism-related revenues reached unprecedented levels, surpassing figures registered during the 2023 Chinese New Year while also surpassing pre-COVID-19 levels.

Rebound in domestic and international travels

According to the data released by the Ministry of Culture and Tourism on Sunday, domestic tourism registered a remarkable performance during this year’s eight-day celebration.

The data reveals a significant surge in domestic trips, totaling 474 million trips made across the country from February 10 to February 18, marking a notable increase of 34.4 percent compared to the same period in 2023. This figure attracted special attention as it was a 19 percent rise compared with that in 2019.

The surge in travel within the country was facilitated by traditional transportation models, such as railways, civil aircraft, and waterways. Additionally, this year there has been also an increase in travelers embarking on independent road trips, partially due to the current rise in popularity of electric cars in China. This trend was further encouraged by the government’s efforts to stimulate the purchase of these vehicles as a way to boost domestic consumption. To cater to this trend, provinces ensured the temporary deployment of additional recharging stations in service areas, ensuring a seamless travel experience for travelers.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

Continue Reading