What we are reading
Trade news: semiconductors, data localization, BRI
Published 13 July 2022
Are the right conditions in place for the United States to revive the country’s semiconductor manufacturing? What prompts more data localization measures - and what are the costs? Check out our new reading list to learn the latest trade news.
Jump to Section
Will the CHIPS Act kickstart US chip manufacturing?
Is the US creating the best conditions for reestablishing semiconductor manufacturing domestically? Better immigration policies would make a difference, argue Greg Wright, Dany Bahar and Ian Seyal at Brookings Institution. Major suppliers, including GlobalWafers, are announcing new investments in the US, per Bloomberg. But will these investments pan out without CHIPS Act funding? Nikkei Asia explores the question while Axios charts efforts by the Senate to push the Act through Congress. Greg Ip in the Wall Street Journal finds that America’s democracy is struggling to meet the China challenge.
How does this domestic semiconductor push fit into President Biden’s China strategy more broadly? Overseas, the US is working to pressure the Netherlands to stop supplying China with key chip-making equipment, Bloomberg reports. Finally, the Economist provides an overview of the Biden Administration’s emerging China strategy.
- Smarter immigration policies could help alleviate the semiconductor shortage – Greg Wright, Dany Bahar and Ian Seyal, Brookings, 17 June 2022
The US is intent on ramping up semiconductor production domestically but has a shortage of workers. Can better immigration policies help?
- Taiwan’s GlobalWafers to Build US$5 Billion Chip Plant in Texas – Akayla Gardner and Debby Wu, Bloomberg, 27 June 2022
GlobalWafers becomes the latest semiconductor input manufacturer to set up shop in the US.
- Chip giants threaten to scale back U.S. expansion without subsidies – Yifan Yu, Nikkei Asia, 5 July 2022
If the US Congress fails to pass the CHIPS Act, will semiconductor manufacturers complete investments in new US fabrication facilities?
- Scoop: Schumer's CHIPS Act gambit – Hans Nichols, Axios, 29 June 2022
US Senator Chuck Schumer tries to engineer a pressure campaign to get the CHIPS Act passed this year.
- America’s Gridlocked Democracy Struggles to Meet China Challenge – Greg Ip, The Wall Street Journal, 6 July 2022
Political divides in the US are hampering efforts to pass legislation designed to make America more competitive with China.
- US Wants Dutch Supplier to Stop Selling Chipmaking Gear to China – Jillian Deutsch, Eric Martin, Ian King, and Debby Wu, Bloomberg, 5 July 2022
The US government is pressuring the Netherlands to further restrict China’s access to key chip-making equipment.
- America rethinks its strategy for taking on China’s economy – The Economist, 6 July 2022
The Biden administration has laid out its policy direction on China, but will their actions fulfill the promises?
Growing data localization measures
As data localization measures become more common, what are the reasons behind increased adoption, and what are the economic costs of these measures? A preliminary mapping of data localization measures from the Organization of Economic Cooperation and Development (OECD) provides some answers. In China, new rules governing cross-border transfers of data will come into effect soon, per the Wall Street Journal.
- A preliminary mapping of data localisation measures – OECD Trade Policy Paper, June 2022
The OECD provides an overview of what data localization measures are, and what they mean.
- China Introduces New Rules Governing Cross-Border Transfers of Data – Raffaele Huang and Shen Lu, The Wall Street Journal, 8 July 2022
New rules will require businesses to get approval from Chinese agencies before they are able to transfer data abroad.
China: Whither BRI – and Mexico?
Will China’s Belt and Road Initiative continue in light of its Covid-19 policies and shifting economic priorities? Alicia García-Herrero and Eyck Freymann, writing for the think-tank Bruegel, explain why the BRI will shift but not end.
While Mexico seems an obvious choice for manufacturers who want to leave China and relocate closer to the US, the Financial Times explains why Mexico may be missing its chance to profit from decoupling.
- A new kind of Belt and Road Initiative after the pandemic – Alicia García-Herrero and Eyck Freymann, Bruegel, 23 June 2022
The Belt and Road Initiative is turning from infrastructure financing into an instrument for Chinese soft and hard power.
- Why Mexico is missing its chance to profit from US-China decoupling – Michael Stott and Christine Murray, Financial Times, 3 July 2022
Mexico appears to be an ideal location for reshoring production but faces challenges that are difficult to overcome.
A new era for open trade?
What must be done to continue the era of globalization and further trade liberalization? Martin Wolf, opining in the Financial Times, offers five areas for focus.
- In an era of disorder, open trade is at risk – Martin Wolf, Op-ed: Financial Times, 28 June 2022
In a new, post-neoliberal era, how can globalization’s gain be preserved and a liberal trading order sustained?
More related research from the Hinrich Foundation:
© The Hinrich Foundation. See our website Terms and conditions for our copyright and reprint policy. All statements of fact and the views, conclusions and recommendations expressed in this publication are the sole responsibility of the author(s).