couldn't get the collapse elephant, but crisis where bad things are getting worse and worse and worse. so the lesson for today is that when you have these huge, unexpected events like the, you know, the war and ukraine and the surprise increase in inflation and interest rates by the central banks that the policymakers need to make sure. ready every thing is adapted and can what to be stable so that people don't get fear that kind of flat or a lot of the vulnerabilities have moved outside the banking factor. and we may see something in the insurance sector like we did in the united kingdom with we actually may see something going on right in the corporation sector. it could be that the amount of leverage loans which are high yield loans, that risky loan, that a number of companies have that actually might get more likely to be where the problems are going to be the time the bank. we fixed the banking problem because that was

the banking. that was the problem last time. but the problem had moved over to other parts of the system. i got you all just there was lisa whole robin in doha, reminder of our top news stories. ukraine says it won't be intimidated by wave of russian missile strikes. at least 14 people are being killed and attacks around the country. rushes, president says is in response to the attack on the crimea bridge. the u. n. has joined the us near opinion and condemning the attacks ukraine's ambassador to the un labeled russia, a terrorist state of the general assembly. today terry sasha, spelled the capital city of ki if and many other ukrainian cities throughout the country with at least 80 for me, styles into doesn't you, ab energy facilities, residential buildings,

schools and universities, museums and crossroads in the city centers where among the target, the russian defense ministry later declare a legitimate they are refugee agency says armed conflict, human rights abuses and global warming have forced a record number of people to flee their homes. 100000000 are displaced, the organization says it may be false to make severe cuts if it doesn't receive more funding. protesters in cities across iran have kept up pressure on the government a month after the death of a young woman in police custody. students rallied in the capital t her on despite a police crackdown. the suz electoral commission has declared the country's newest party, the widow of most seats in the parliament following last week's election. the revolutions of prosperity party as 156 constituencies, 5 cent shy of an right majority. its leader. some comedy who is new to

politics needs to find a coalition partner. storm judy is still having central america killing at least 16 people and as a warning it could get worse. l salvador declared a national emergency to be drenched by trenches rain. at least 18 people have died after flooding and all that. indian state of pradesh parts of northwest and india got more rainfall than normal on sunday, and some schools have clothed a nobel prize. economics has been awarded to 3 americans. the research on banks and financial crises. then bunkie douglas diamond developed a big what the 2022 award. those were the headlines modi's and a half an hour to stay with us inside story is next. ah, ah ah,

it is the latest source of tension between the united states and china. president joe biden is accused of weapon ising technology for imposing sweeping controls on sales of semiconductors. today, seeing what's behind this decision, and how much is it down to politics? this is inside sort ah hello, welcome to the program and hasn't seek a technology is the latest sector to be effective by tensions between the you. in china, washington has imposed sweeping controls on exports of semiconductors, also known as microchips to beijing. american companies will be restricted from selling advanced chips to china and supplying chinese firms with tools to make their own. department of commerce says it is to prevent sensitive technologies from

falling into the hands of china's military intelligence and security services. the u. s. has been trying to boost its own semiconductor industry. in august, president joe biden approved $52000000000.00 in federal subsidies for new manufacturing plants and research. john is trying to move ahead of us and manufacturing them. it's no wonder, literally the chinese communist party actively lobbied against the chips and science fact that i've been pushing in the united states congress. the communist party of china was lobbying in the united states congress against passages legislation. and unfortunately, some of our friends in the other team bought it. united states has to lead the world producing these advanced chips. this law is going to make sure that it will, what time has accused the us of using science and technology as a political weapon may go to you. we also need to maintain it,

scientific hedge money. the recipes is export control measures to maliciously block and suppressed chinese companies. this practice deviates from the principle of fair competition and violates international cannot make and trade rule. it will not only damage and legitimate rights and interests of chinese companies, but also affect american companies interests. and let's take a closer look at why a semi conductors are important to global manufacturing, also known as sammy's, or chips. semiconductors on needed to run nearly everything that has an electronic component from smart phones to cause and military equipment. the global semi conductor market was valued at about $595000000000.00 in 2021 and is expected to become a trillion dollar industry by 2030 countries producing the most semiconductors are china, india, and the u. s. but technologically, all trail, taiwan that is the most advance, it makes 65 percent of the world's chips and nearly 90 percent of the most advanced

. ah, well let's bring in our gifts now to talk more about this from dubai. we have a suki chef street, an associate fellow in the asia pacific program of chatham house, from shanghai, dan wang, a chief economist at hang sang bank china and from london yang, one a senior analyst at counterpoint. that is a global technology market research firm. good to have you with us. so the suki, if i could start, would you, what's the, the thinking behind this decision by the u. s. in terms of putting the pressure on china. i think one should look at the historical perspective where the, the export controls have been used by the u. s. essentially dating back to the boardwalk. right. so you have export controls, mainly targeted of the former soviet union in the 1950s, sixties and seventies,

which are mainly and stemming in the advances that the soviet union could make in the andreas numbers under way to really for obviously the geopolitical context has changed or in this era, and the primary us motive ish and you know, last friday the decision comfortable comes on top of many, many other this is she's taking the last 2 to 3 recognition by success. read the fish that we are now, you know, technological race and component of that of course, is an armstrong and primacy of you know, developing these advanced computing capabilities of which, you know, the semiconductors really are an evidence of these technologies who are able to moscow this will allow you to can logically, edge work with

a competitive and in this case, obviously the u. s. thinking mainly of china. right. and want to seen a lot of narrative that these can explore controls are somewhat new. that's absolutely not true. and also if you look at a purely from the perspective of a nation state trying to protect it's a logical edge. so the u. s. is relevant in its rights to impose these export controls. and obviously they're extraterritorial in the sense that u. s. allies who have access to these technologies will not be able to transfer them or were to try. right to that see, technical trade conception or why why this has been designed to read has been design. obviously, there's a huge your critical context of this. you mentioned taiwan earlier that taiwan is clearly the hub global seneca like to production. and you know,

any country that is april, 1st of all, to protect it flanks at all. to make sure that the technologies that produce does not get transferred in this case to china. now, the 2nd element of this really is to make sure that the taiwanese manufacturers be something conducted lean more towards the us side than the chinese side. and this is going to be a delicate diplomatic dance, as it unfolds over the next 5 years. and so dan wang, at how do you expect china to react to this? they have already said that this is a, that the u. s. is, is, is kind of throwing its weights around here in the semiconductor market to buy yet using it as, as a, as a political weapon. bahati expect china to expect them to respond to this. well, china has been well aware of the fact the logical decoupling with the us for a long time, so it has been redoubling is to be self sufficient in chip manufacturing. and from

this point on, we can definitely go back to france that will be taken by the chinese government. one is on the financing of the chip industry in china. they already got a huge financial support, mostly from the city and provincial government. but the central government has been supporting a large fund trying to develop this. i'm a conductor sector, and the 2nd one is about talent. in the past decade, china has been hiring very aggressively from ty, once, especially from the t s. m. c. to replenish its talent in terms of entrepreneurs engineers to develop its domestic sector. but at this point, there has been a bottleneck. in the past 3 years, the labor mobility inflow into china has been significantly slowed and the economics prospect for china has also been much dimmer than before. so there has

been some shaken confidence about where china can go from this point. if we can keep up its openness in the coming years, then i still believe there is a chance that china can develop quite fast about his domestic ability to produce chips. young, why do you share perspective? i mean, the attention here by the united states is to try and set chinese chip makers back by, by years. could they do that? well, i think the measures that we have seen since last week. definitely. well, you could definitely see the rationale behind the us administration. you look at this from an angle of not just the measures last week, but a slew of policies in, in recent years. you start with what we call the tech war, starting from a band of always a t equipment in 2018. and more recently, severe cups,

most of your clubs on the chinese tech industry and more recently restrictions on export of us semiconductors and, and the policies from last week we could see even further criminalization of some of the restrictions. and this one includes the sale of semiconductor manufacturing equipment as well as restrictions on plus and now exchanges. so i could say that the, the, the policies have been fairly consistent. and that, that us administration is really faxing as muscle. and looking deeper and looking, keeping to where the values fly in the semi conductor supply chain. one could say that they are landing the punches where they intend to. and the purpose of it is that of course ensuring supremacy over us leading edge technology and manufacturing

. but also to kneecaps china's technological development. the suki. shasta, is there a danger that this move could ignite tensions further between china and the united states? i mean, i think that's the baseline expectation that this is sparkle, continuing saga that is going to unfold in the next few years. it is, it is the greatest drama and town watching both the us and china attempting to gain a logical supremacy in all of these new area to know artificial intelligence, machine learning which is what the semiconductors and advanced computing capabilities are going to enable. so the question is, are the global rules of the road which will enable the u. s. in china? come together. you know, almost like a tree in agreement on the sensitive, technological light and in the room for that seems very, very limited. in fact,

on the global trading front is very little consensus amongst members of the w t. o to come to any kind of agreement on the global rules of the road. you know, they've tried for many times and all over the past few decades and have not succeeded. so it's very difficult to see any one defining the transpose of technology as constituting normal in our exchange of trade goods and services between country and the you are clearly using that sovereign exception in this case. so no trenches are absolutely going to riots. are they going to rise not only in this matter of field of semiconductors, but it is going to have ripple effects elsewhere and no one should really close the watch the block vincent i was a bit you know, in any case called, aggravated after the nancy pelosi visit a few months ago. yeah, let's talk

a little bit more about taiwan. we mentioned at the top there how pivotal taiwan is to the semiconductor industry. it's essentially cornered the market on semiconductors. dang, wang. what, what's, what's tie one's role going to be in all of this, given the, were the close relations. it has with the united states and the fact that china considers tiwana renegades province. but there is, there is an understanding there. the china doesn't want to put too much pressure on taiwan because of its dependence, that the dependency has on taiwan semiconductors. while when it comes to the ship manufacturing, china absolutely rely on in ports. and taiwan has been a major source advanced chips for mainland china. and when we look at the competition between us and china, everybody is where very clear about what's the end game is. it's basically the

transformative technology in the future. and china wants to transition its economy from a investment, allow the economy to a consumer base economy. things like e commerce, smartphones, online payments, or even digital money has become very important on chips which china cannot make. and mostly only can be made by t s. m. c would be essential in this transition. and recently we have seen more talk restrictions from the us. and that's partly triggered by some breakthrough of the chinese company. because some chinese company has been a boat as an icy. specifically, has been able to getting close to make its own southern nanometers, chip. and the previously, it was already able to make the 14 nanometer chip at a reasonable scale. so one can only anticipate more tac restrictions on china are

right now. the bite and ration is very clear on getting more aligned with allies, including europe, including taiwan, in order to curb their ship exports, to china. and what's gonna happen, maxed really depend on how much more that a bite and ministration is willing to do. and on the china side, on the only thing that we can anticipate for sure, is that a work for sure, it will definitely provide more financing, more policy support, and absolutely more talent support for its domestic trip industry. young, well, what's your take on, on the implications of all of this for taiwan? well, certainly tawan is in a very tight spot. on the, on the we have, we have seen for the past couple of years. the geopolitical tensions and also that

had and also due to cobra, there was some ripple effects over the supply chain. covered disruption is definitely had some huge impact to our industry casing. point some call manufacturers were run the half half of the normal manufacturing capacity. so globally, that's huge demand for the products that come out of t. s. m. c's, fab's intel one. now to see is a, is a global company. the reason that it exists is that it tries to take a neutral stance and collaborate with all the other partners, the semi conductor value chain. it's extremely long. it's, it's, it's a very specialized area all the way from materials design. i p equipment manufacturing packaging. so the reason that yes m c succeeded is not only the on the expertise,

but also in an open collaboration attitude it had with customers. so. so basically what we're looking at is tier and c and some of the supply chain companies in columns really being squeezed from non market forces. they really have to take. busy very difficult decisions, whether to align with the u. s. driven policies, as well as catering to the, to the markets because been located in the hallway and close to the some of the biggest customers in japan and korea and the china really benefited them. so if it would come to a place that they had to move some of the assets to other places, it's really, it could be a logistic and financial challenge for them. i'm not saying that they will not do it, but definitely it is one of the concerns for their management. yeah, the suki, i mean, as, as, as yang was saying that there's a lot of interconnecting parts to,

to the semiconductor industry. and if this policy is going to be, this policy from the u. s. is going to be effective. it needs everybody to do their part, so to speak. that means other countries allied with the u. s. other foreign companies to, to go along with what the u. s is trying to do how essential is that for this to work? well, the us are already introduced the framework which should make the, the coupling reality and reference to be in the big around the framework. putting signatory countries. digital cooperation is one of the pillows off the ip address. so in the american condition on this is the absolute, if you would like to share these advanced computing capabilities with dice on very,

very strict conditions. no access to this information should not be shared with the chinese and you know, embedded in this. obviously it's not only focused on intellectual property and digital issues. there's also a create a bit and see how these trade whether it mos into a free trade agreement type of c, p t, p, p. a bit early to speculate on that. but i think the u. s. geostrategic position on this is obviously to rally and mobilize a group of allies, not only measure, but obviously in europe, in the context of russia and ukraine already beginning to see that in order to build this coalition. because many lengths technology and the conductance being one of that. and it is this very broad strategic approach to the

u. s. horse will help again, a technological edge over a period of time or what it regards as in door made by china, or to pass the kid and also accusations about intellectual property. and so this, that essentially taking a cohesive approach in order to address. let's just take a step back from this for a moment because a lot of people i know will be, will be wondering, what does this all going to mean for things like personal devices, phones and other electronic devices that sort of thing. you know, we can, we talked a lot about military hardware, but how is this going to, is it going to affect it all our daily use of these devices and getting the most advanced one next year and the year after that, let me, let me put that to you a young way certainly is a concern given that we have on our watch a sort of

a development of 2 different standards. and in terms of the consumer market, i would say in the short to medium term that it is not, not as big issue as expected, because we in the short term looking at the semiconductor and, and global consumer tech industry. we are now in that downtown, as we can see from the global macroeconomic environment, inflation globally and consumer spending being squeeze energy prices increasing. so we have already seen some key consumer electronics come in. companies coming out with earnings, revisions, capital, capex cuts and hiring freezes, which all point to the effect that the market is heading to a down to. and semiconductors, being the enabler of global consumer technology,

invariably will feel the pen tooth now. so in the short term, what we're looking at in this, in this came up the policy reducing demand, reducing supply. but we are also facing much more rapid reduction into monk. so in the short to medium term, we are unlikely to see a significant change, or at least as much as we experienced during cold times. now, but in the medium to long term, that definitely would be something to think about. because as i, as i mentioned, if companies are having to make decisions to move that assets, capacities and personnel around it is almost a break from where the current ways of doing things. they need to change their operating patterns. and there will be financial, as well as operational, last involving the and by the nature of the semiconductor and tech value chain. in

general, it is a very long chain and a lot of things need to go right and know many things. a lot of things could also go wrong. it is already fragile, as we've seen the past couple of years. we definitely can kind of have higher risks coming to the market in the, in the next few years. then when, what if you think this is going to have on consumers? well, we have to remember that the us didn't deny china's access for all chips. it only when it comes to the most advanced trips that will go in smartphones like i phone or self driving vehicles. that's where the export fan happens. so at this point, china is able to increase actually a global sale and global share of the chips. the suki, what effect do you think this is going to have on personal technology? i think, you know, we focus

a lot of hardware and i agree that on the hardware things are probably not going to change the next few years. but i think when digital standards and software, we already see a decoupling between chinese standards and the rest of the world. and you know, that is going to have a profound impact in the way beacons, you know, technology. and in the way the chinese we're good consume technology and of course, we know both of these are competing system will be built on cutting edge hardware and software where they going to have very, very different philosophies, an operating system that reflects, of course, why the us and china are in these 10, she's in the past space. so this is the company of standards, potentially mean doc, you know that the world that we've been asked to, yes,

it's been seamless. frictionless. baby been able to move from one country to the other with a single operating system, but that essentially is going to play. and this is what the american moves over the past week. essentially suggest, all right on that we will have to leave it. thank you very much. all 3 of you, the suki. yes. tree, dan wang and yang. thanks so much for being on it. so i story and thank you. as always for watching, remember you can see is problem again. any time just go to a website or dot com. and for further discussion, go to our facebook page at facebook dot com, forward slash ha inside story. you can also join the conversation on twitter handle . there is an a j inside story for me, hasn't he got out in here, but now ah

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