Can de-risking avert supply chain precarity in the face of China-U.S. geopolitical tensions? From sanctions to semiconductor resilience and national security

Abstract

As a main driver of geoeconomic power, technological supremacy is at stake in the current zero-sum tech war between the U.S. and China. Semiconductor chips have become an emerging geopolitical frontier in the rivalry of the two powers. Since the confrontation has intensified, the U.S. seeks to weaponise its dominant position in the global semiconductor value chain (GSVC). Some industrial policy-driven geostrategic approaches inform the race to reduce the GSVC vulnerabilities. The tit for tat nature of sanctions risks making multilateralism decline and further undermining the effectiveness of the global governance regime. Shifts in rising economic competition highlight the constraints on collective action. It remains critical as to whether the international economic and legal system can survive the current fractured geopolitics, and whether the new thinking on global governance could be viable for a non-zero-sum game.