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China’s high-tech ambitions

Balance of Power
Bloomberg

What's going on at China's largest chipmaker?

Semiconductor Manufacturing International Corp. is trying to clarify the intentions of a top executive after reports he'd submitted his resignation, apparently miffed the company appointed a vice chairman without consulting him.

What may seem like a little corporate intrigue in fact matters to China and the world.

The state-backed company lies at the heart of Beijing's intentions to build a world-class semiconductor industry free of U.S. technology. Co-Chief Executive Officer Liang Mong Song was seen as key to SMIC's ambitions of eventually matching industry leaders Samsung or TSMC: SMIC shares sank almost 10% on news of his apparent departure.

SMIC is also at the forefront of navigating U.S.-China ties that have taken a dive during Donald Trump's presidency. Washington recently labeled SMIC a national security threat, threatening to cripple its access to crucial components.

SMIC and Huawei Technologies are Chinese national champions, central to President Xi Jinping's plans to become self-sufficient in future-oriented technologies from AI to 5G and autonomous vehicles. Semiconductors lie at the core of all these developments.

The incoming administration of Joe Biden will now decide if SMIC is hobbled or allowed to continue its advance.

The role of democratically-governed Taiwan, which China regards as its territory, is another factor. Liang is an alumnus of Taiwan's TSMC, the world's leading manufacturer of cutting-edge chips, underscoring how key the island is to China's development.

As Biden ponders which path to choose on China's technological ascent, it increasingly looks like Taiwan may play an outsized role in those deliberations. — Alan Crawford

 A staffer at a semiconductor workshop in Shanghai.

Photographer: Ding Ting/Xinhua News Agency

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Global Headlines

Green team | Biden has begun to assemble the lineup to drive his ambitious clean-energy and climate agenda, a diverse group of government veterans that includes a lawmaker, a former Environmental Protection Agency chief and a Midwestern governor.

  • Biden picked one-time rival Pete Buttigieg as his transportation secretary.
  • Republican state officials are newly open to expanding mail-in and other alternative voting options, despite Trump railing against the changes.

On the sidelines | Trump pinned all his hopes for ending the pandemic on a vaccine. But as shots started going into American arms this week, the president has barely acknowledged the moment. He's also wavered on when he'll be inoculated.

Brexit dash | Even if the U.K. and the European Union manage to secure a post-Brexit trade deal this week, they'll have just days to ratify it before the transition period expires at 11 p.m. London time on Dec. 31. If it isn't approved in time, Britain could be left outside the EU without an agreement.

  • While negotiations hang in the balance, London remains a dominant financial center and pillar of the U.K. economy.

A waiter clears plates at a restaurant yesterday in Covent Garden in London.

Photographer: Simon Dawson/Bloomberg

Steak stumble | Japanese Prime Minister Yoshihide Suga faces public criticism for flouting government restrictions on gatherings during the pandemic by dining with a group of celebrities at a pricey steak restaurant in Tokyo's posh Ginza district. Isabel Reynolds explains how the gaffe adds to the troubles of the premier, whose support rate has been sinking over his handling of the virus.

New reality | Brazilian President Jair Bolsonaro's non-conforming views on climate change are about to meet a very different approach on the environment from Biden's administration. Senior officials are concerned that his efforts to open the Amazon basin for business and his steadfast support for Trump could harm investment and hinder the resolution of trade issues with the U.S.

What to Watch

  • Top U.S. congressional leaders from both parties reported progress last night after meeting for several hours over the terms of a Covid-19 relief package they hope to attach to crucial government spending legislation and pass by the end of the week.
  • The South African ruling party's ethics body recommended that African National Congress Secretary-General Ace Magashule, a key rival of President Cyril Ramaphosa, step aside or be suspended.
  • Australia plans to challenge China at the World Trade Organization over Beijing's decision to impose hefty tariffs on its barley exports as relations between the two key trading partners deteriorate.

And finally ... By the middle of next year, arriving at an airport, entering a restaurant or attending a soccer match may all have a special requirement: proof of vaccination or a negative coronavirus test. The mechanism could range from a smartphone app to low-tech paper cards. But as Stephanie Baker and Tara Patel explain, right now there's no international system for verifying that someone has been inoculated, and scientists still don't know how long the leading vaccines provide protection or if they stop transmission of the virus.

A man walks past a sign directing travelers to a coronavirus testing station at Berlin's Schoenefeld Airport on Aug. 4.

Photographer: Sean Gallup/Getty Images Europe

 

 

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