Geo Political Risk

[warthog]

From your impression, do you think that the local HKers are unconcerned with the changes to make HK’s political system and civil rights more aligned with what happens on the mainland?

Many people in Hong Kong are concerned with what the handing back of Hong Kong from the British to China means for their future interests. How many and to what extent is very difficult to say, i.e. they are not unconcerned.

This is all within a context of significant misunderstanding in the West about China itself.

[moka]

AUKUS: Are nuclear-powered submarines a good idea for Australia?

https://www.abc.net.au/news/2024-03-05/aukus-set-to-sink/103534664

"I think the chance of the plan unfolding effectively is extremely low," Hugh White, an emeritus professor of strategic studies at the Australian National University, tells ABC RN's Global Roaming.

More details were announced on March 13 last year, including around the two so-called "pillars" of AUKUS.
Pillar One, which has received the most attention, is the submarines.
The plan is for Australia to buy at least three nuclear-powered Virginia class submarines from the US in the early 2030s.
We will then build at least five of a new, nuclear-powered submarine class dubbed the SSN-AUKUS, likely in Adelaide, in the 2030s, 2040s and beyond.

Pillar Two involves the sharing of technology, in areas like quantum computing, artificial intelligence and hypersonic missiles. (If NZ joins AUKUS it will only be in Pillar Two, sharing of technology.)

Professor White has two main worries around AUKUS.
"We do need submarines. I think submarines are a very important part of a defensive posture for Australia … [But] I don't think we need nuclear-powered submarines," he says. "They're so much more expensive. They're so much more difficult to make. They're so much more difficult to operate. We'll end up with far fewer of them in our fleet."

He says his second concern is far bigger: "I don't think we're going to get [the submarines]."

He claims the plan is overly reliant on future decisions and assistance from the US and UK governments, and also full of near-insurmountable technical tasks for Australia. "I think what's going to happen … is within the next few years, the whole thing will just come apart in our hands. And we'll be back to square one trying to work out how to get some more conventional [submarines]."

Allan Behm, the director of the international and security affairs program at the Australia Institute, also doubts the likelihood of the AUKUS deal going ahead as planned.

One reason, he says, is that the technologies, skills and workforce that are required from a country like Australia to build and maintain nuclear-powered subs is pushing our limits, even with the involvement of the US and UK.

"We're going into a technological domain with which we are totally unfamiliar," says Mr Behm, who has a 30-year career in the Australian public service and was senior advisor to then-shadow minister for foreign affairs Penny Wong.

"We're talking about a number of submarines with nuclear propulsion systems in them. And we've only got one nuclear reactor in Australia, which is nothing like the very, very highly enriched uranium reactors, the pressure water reactors that exist in nuclear-powered submarines," he says.
"I think the best parallel would be, how would Australia imagine that it would undertake, conduct and retrieve a moon launch?"

Mr Behm, also from the anti-AUKUS camp, says there's an element sometimes missing in discussions about defence.

"Diplomacy has got to be central to the way in which you think about your long-term national security," he says. "You get much more return on your investment in diplomacy than you ever get out of defence systems, which in the life of almost all of them you never use."
Mr Behm advocates for more emphasis on "how you use the intellectual and cultural resources of the nation to both protect and to promote its deep and long-term security".
"[So] I would be prepared to argue that the pivot on which our national security rests is the foreign minister."

[moka]

Article relevant to NZ joining AUKUS.

Intel has a project to build a secure enclave semiconductor manufacturing facility.
The Semiconductor Industries Association says that the CHIPS Act (not counting secure enclaves) will require 115,000 new workers by 2030. Early research has indicated there are simply not enough US students in the pipeline. Therefore, many companies likely will need to turn to foreign nationals and recruit and retain international students to bridge the hiring gap.
One out of every five jobs, maybe more, will likely be filled with foreigners who are qualified in STEM fields (science, technology, engineering, and mathematics).
The secure enclave cannot use foreign workers if the facility is classified.

https://asiatimes.com/2024/08/secure-enclaves-bad-chips-act-idea-wasting-billions/

Secure enclaves: bad CHIPS Act idea wasting billions

While all the focus in the past week has been on a significant crisis for America’s once premier semiconductor company, Intel, which laid off 15% of its work force, hidden from view is another blunder – a $3.9 billion project to build a “secure enclave” semiconductor manufacturing facility. Intel will probably locate this facility in Arizona, where it already has a semiconductor fab.

If you are about to ask what will be produced at this facility, don’t bother since the project is classified. But even though the details are hidden, it isn’t hard to figure out what is going on and why it is a big mistake (like the CHIPS Act itself, a $59 billion dollar investment that will mostly finance foreign and domestically owned companies to set up facilities in the US). Because the CHIPS Act is a bipartisan waste of money, only the poor taxpayer will (once again) be robbed.

Some of the foreign companies financed under the CHIPS Act are: Samsung (Korea), TSMC (Taiwan), Global Foundries (UAE), BAE Systems (UK), Global Wafers (Taiwan) and Amcor (Australia). All these companies are awash in money, so the added US money is not needed.

The secure enclave is supposed to prevent anyone compromising chips made for military and intelligence applications. This means that the factory will have strong security. This presents a significant problem because many of the workers in the US semiconductor industry come from abroad, from India or Pakistan or farther east in Asia (including China).

The Semiconductor Industries Association says that the CHIPS Act (not counting secure enclaves) will require 115,000 new workers by 2030. Says one report:

Meeting these ambitious numbers will require companies to ramp up hiring significantly in the sector. Many of these roles will require a two- or four-year degree in engineering or computer science. Early research has indicated there are simply not enough US students in the pipeline. Therefore, many companies likely will need to turn to foreign nationals and recruit and retain international students to bridge the hiring gap.

One out of every five jobs, maybe more, will likely be filled with foreigners who are qualified in STEM fields (science, technology, engineering, and mathematics).

The secure enclave cannot use foreign workers if the facility is classified. Finding US citizens with the skills needed in a competitive and short-staffed environment to work in a dead-end factory in Arizona may be the Achilles heel of the secure enclave program. (US defense companies also are facing hiring shortfalls. Can anyone seriously imagine signage at a Yankees game promoting jobs to build submarines?)

Assuming the money is used to actually build a secure facility, it will be a very low-volume producer of specialized components. This means the cost per chip will be astronomical. The CHIPS money in no way fixes that problem. This means the cost of weapons will soar completely out of control (and it is bordering that already because defense goods are vastly overpriced and less and less affordable even for “rich” countries)

Intel’s stock is in the tank, the company has stopped paying dividend and it is laying off 15,000 workers. Intel was supposed to be adding 10,000 new jobs as part of the money it was getting from the government’s CHIPS Act, so it isn’t unfair to say that thanks to the problems facing the company and the lack of serious corporate vetting by the Department of Commerce, which is handing out CHIPS money, the US will lose a net of 25,000 jobs and Intel’s products will need to be outsourced for the company to survive.

Many of the foreign companies are excessively rich: so the CHIPS Act is just a bribe for them to locate manufacturing in the US. Many of them, including TSMC, are not going to bring state-of-the-art production to the US for two reasons:

• They will want to keep their best technology under their firm control and not risk losing it in the United States.
• TSMC will want to keep its market access free from US export controls.

Why risk your business for a monetary handout you don’t need?

None of this is to say that nothing good can come out of the $59 billion CHIPS Act investment. But if the idea is to create a domestic manufacturing base by throwing money at foreign and domestic companies, think again.

[moka]

Mr Behm, also from the anti-AUKUS camp, says there's an element sometimes missing in discussions about defence.
"Diplomacy has got to be central to the way in which you think about your long-term national security," he says.

Several commentators I listen to say the US is not proactive when it comes to diplomacy.

I note there was a recent peace summit for the Ukraine war, and yet Russia was not there. How can you have a peace summit without the key player?

https://www.usip.org/publications/2024/06/after-ukraines-peace-summit-widen-consensus-middle-powers

Last weekend saw the broadest, highest-level international endorsement yet for the principles of Ukraine’s peace proposal to end Russia’s invasion. Ukraine’s first peace summit, in Switzerland, drew 101 countries and international institutions, of which more than 80 signed a declaration endorsing “principles of sovereignty, independence and territorial integrity of all states, including Ukraine.”

The peace conference followed immediately upon a summit by the Group of Seven (G7) industrialized democracies that bolstered financial and security help for Ukraine’s defense,

The Swiss government, which co-hosted the summit with Ukraine, did not invite Russia, saying it had repeatedly indicated “no interest in participating.” Several countries, including Brazil, criticized organizers for Russia’s absence.

But a Russian presence would have been premature. The purpose of the summit was not to launch negotiations, but rather to have countries advance essential preparations, broadly arranged around Ukraine’s 10-point peace formula, with its commitment to international law, which Putin’s Russia is working to corrode. This includes affirming basic principles and goals, defining issues to be addressed, developing a structure for future talks and determining whom to include in those talks. Ukraine and its allies in this diplomacy hope that a planned next summit will involve Russia and begin discussions on how the war might end.