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U.S. Navy guided-missile destroyer USS Chung-Hoon sails alongside the Royal Canadian Navy frigate HMCS Montreal during Surface Action Group operations as a part of exercise “Noble Wolverine" in the South China Sea May 30, 2023.
Hard numbers: Canadian ship passes through Taiwan Strait, Arrests plummet at US southern border, New mortgage rules (keyword: new), EV plant construction stalls
110: A Canadian warship passed through the Taiwan Strait on Wednesday in what Ottawa called a commitment to an open Indo-Pacific – and in what China called an undermining of peace. Beijing claims sovereignty over democratically governed Taiwan and the 110-mile-wide waterway dividing the two. Taiwan and the United States dispute that, saying the Taiwan Strait is an international waterway.
60,000: The number of arrests by border agents of migrants who crossed the southern US border illegally in July is expected to fall under 60,000, a massive drop from a peak of 250,000 in December, after President Joe Biden imposed stricter measures for asylum-seekers in June.
30: In an attempt to alleviate the housing crisis keeping many younger Canadians from buying a home, the federal government has implemented new mortgage rules giving first-time homebuyers with insured mortgages – the type required when a down payment equals less than 20% of the purchase price – up to 30 years to pay them off. Before now, the max was 25 years, and while this move will help lower some monthly payments, there’s a catch: It only applies to newly built homes, so many doubt it will help alleviate the housing crunch.
2.76 billion: After breaking ground in 2023, a company building a plant to produce battery components for electric vehicles near Kingston, Ontario, says it’s delaying construction because of a slowdown in EV sales. The project carried a total price tag of up to CA$2.76 billion, was projected to create 600 jobs, and the federal government was slated to invest up to CA$551.3 million.
The Taiwan election and its AI implications
Taylor Owen, professor at the Max Bell School of Public Policy at McGill University and director of its Centre for Media, Technology & Democracy, co-hosts GZERO AI, our new weekly video series intended to help you keep up and make sense of the latest news on the AI revolution. In this episode of the series, Taylor Owen looks at the first election in Taiwan and the implications it could have for the future of technology, including AI.
Hi, I'm Taylor Owen. This is GZERO AI. So welcome to 2024, the year where over 50 Democratic countries head to the polls. And we're only a few days away from the first.
On January 13, Taiwanese voters will head to the ballot to elect a new president in an election that could have a profound effect on the global economy and on the future of AI. Let me explain. So the front-runner in this election is Lai Ching-te, a member of the incumbent Democratic Progressive Party. Lai is generally viewed as being in favor of Taiwanese independence, but the Chinese Communist Party has called him a separatist with a confrontational mentality.
But what does this have to do with the future of AI? Well, it all revolves around a single company, the Taiwan Semiconductor Manufacturing Company or TSMC. TSMC makes more than 90% of the world's most advanced chips, the kinds of chips that power much of artificial intelligence. And they make those chips on the Western coast of Taiwan, only 110 miles from mainland China.
So let's assume that Democratic Progressive Party wins, as many expect they will, and that the conflict with Beijing escalates. Well, what happens then? Well, it seems to me there are at least two possibilities. One is that because China is so dependent on TSMC, as we all are, for their chips, that they wouldn't risk an actual attack. This is often referred to as Taiwan Silicon Shield, a kind of new era of mutually assured destruction.
The other possibility, though, is that China does attack Taiwan. And if that happens, it's not inconceivable that Taiwan would preemptively destroy TSMC's manufacturing facilities. And even if China did take control, before that happens, it's unlikely they could continue production. Chip manufacturing is just too contingent on global cooperation.
If TSMC ultimately goes down, the global technology industry could be thrown into turmoil. Virtually no country in the world would be able to build cell phones or cell phone towers. PC production would fall by at least a third, maybe half, and everything from the appliance industry to the automotive industry would take a hit. It would be a global economic crisis, and the progress on AI would be set back years.
While it remains to be seen how this story will play out, one thing is really clear. The global computing industry has a number of incredibly vulnerable choke points, companies like TSMC that an entire industry is dependent on. While diversifying something as complex as chip manufacturing will be difficult and require a ton of capital and real democratic leadership, it may be essential if you want to stabilize the industry. Otherwise, the future of technology may be vulnerable to the whims of volatile players like the CCP.
I'm Taylor Owen and thanks for watching.
Hou Yu-ih, left, candidate for Taiwan's presidency from the main opposition Kuomintang Party, and Jaw Shaw-Kong, vice presidential candidate, wave at the Central Election Commission in Taipei on Nov. 24, 2023.
Taiwan’s unity ticket falls apart at the altar
The opposition’s shotgun wedding is off in Taiwan. Just two weeks ago, with the blessing of Beijing, the Kuomintang Party and the Taiwan People’s Party announced their intention to field a single candidate in the country’s Jan. 13 election in the hopes of defeating the ruling Democratic Progressive Party. It was a move cheered by China, which is no fan of the current frontrunner, DPP’s pro-independence candidate, William Lai Ching-te.
But on Thursday, negotiations collapsed on the political equivalent of a reality TV show as business magnate and independent candidate Terry Gou moderated a live broadcast of efforts to break the deadlock over which opposition party’s candidate should be on the ballot. After mutual accusations of bad faith, KMT leader Hou Yu-ih read a private text message from TPP rival Ko Wen-Je that said Gou needed to “find a reason” to drop out of the presidential race. In a dramatic finale, KMT negotiators walked off the set as the cameras were rolling.
Both opposition parties have now registered separate candidates in the race. The entire spectacle played into the DPP’s hands, prompting Lai to ask, “Should we dare to hand over the business of running the country to these people?”
The opposition now has little chance of defeating Lai, who further boosted his candidacy last week by naming Hsiao Bi-Kim, Taiwan’s representative to the United States, as his vice-presidential running mate. Since Beijing considers the pair a “union of pro-independence separatists,” analysts agree that a Lai-Hsaio victory would likely further degrade already hostile relations between Taiwan and China, leading to greater military escalation and economic coercion.
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Hard Numbers: US firms go on a Canadian energy run, Taiwan strait drama continues, Russian sanctions-busters busted, Names are for the birds
3.2 billion: So far this year, US firms have spent $3.2 billion acquiring Canadian oil and gas companies, the highest figure in a dozen years. Lower valuations for Canadian energy producers are drawing interest from south of the border.
2: Never a dull moment in the Taiwan Strait these days, as the US and Canada have sent two ships through the waterway for the second time in as many months, prompting China — which regards self-governing Taiwan as one of its own possessions — to put its troops on “high alert.”
3: US authorities have charged three people — including two Canadian citizens — with scheming to send millions of dollars' worth of blacklisted technology to Russia. All three of the defendants, who carry Russian passports, were accused of exporting items that Russia has used as part of its invasion of Ukraine.
80: The American Ornithological Society will change the official nonscientific names of as many as 80 US and Canadian bird species named after historical bird nerds who owned slaves, exploited Indigenous people, or held other beliefs that the society says “don’t work for us today.” Wilson’s Warbler for example – named for 19th century naturalist Alexander Wilson – will now go the way of the thick-billed Longspur, formerly named for Confederate Gen. John P McCown. The society says it’s time to “redirect the focus to the birds, where it belongs.”
The US Navy guided-missile destroyer USS Chung-Hoon sails alongside the Royal Canadian Navy frigate HMCS Montreal during Surface Action Group operations as a part of exercise “Noble Wolverine" in the South China Sea.
Canada caught up in US-China maritime tensions
This week, China sailed a warship very close to a US destroyer and a Canadian frigate transiting through the Taiwan Strait, which separates the Chinese mainland from the self-ruled island. The encounter follows a recent near-air collision between a Chinese fighter jet and a US spy plane over the South China Sea.
The US and Canada say they were conducting what is known in navy parlance as a Freedom of Navigation Operation or FONOP under the UN Convention on the Law of the Sea, which guarantees all ships the right to "innocent" passage. Yet for China, these actions are anything but innocent: FONOPs seek to provoke Beijing by sailing through disputed waters to challenge China's claims in the Taiwan Strait and the South China Sea, one of the world's busiest maritime shipping routes.
The buzzing incident also puts a spotlight on Canadian FONOPs in this part of the world, which are becoming more frequent as relations with China get frostier. (Interestingly, Canadians like doing FONOPs with Americans in China-claimed waters but not in the Arctic, where Ottawa and Washington have a beef over who controls the Northwest Passage.)
Still, by joining US-led FONOPs in testy Pacific waters, Canada risks getting caught in the crossfire of rising US-China tensions — especially over Taiwan. And the harder China pushes back, the bigger the odds of a miscalculation that could trigger an armed conflict.
"China doesn’t seem terribly worried about an accident," says Anna Ashton, Eurasia Group's top China analyst. Beijing "is probably hoping to intimidate the US, Canada, and other countries into conducting fewer transits and other activities in the Taiwan Strait and the South China Sea because that helps China assert greater de facto control over these regions."