Tag: economy

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On Malaysia and the US-China Chip War

The FT recently did an in-depth writeup on the semiconductor industry in Malaysia, and how Malaysia stands to gain from the ongoing US-China “trade war” which is aiming to sever China from the US semiconductor and high-technology value chains – a “Silicon Wall” aimed at retarding the competitive threat that China poses towards the US.

Some of my reflections, upon reading this piece:

  1. The role of Malaysia as a mediating “Switzerland” shows the limitations of exclusionary policies as a means of staving off economic competition. There will always be interstitial spaces like Malaysia where supposedly-opaque trade barriers can be breached.
  2. Having said that, from a US trade perspective, perhaps slowing down the rate of Chinese technological advancement is enough, to buy time for the US to regroup and strengthen its alliances amidst China’s ongoing challenge.
  3. That Malaysia is playing this integrative role for US “friendshoring”, and Chinese attempts to circumvent the American “Silicon Wall”, is an interesting and timely reminder of the Archipelago’s long-time role as a meeting place and marketplace between East and West. Geography is very often destiny, especially in global politics, and Malaysia really should be embracing its role as a “mongrel state” opening itself up to the world.
  4. Following from this, it is crucial for the Malaysian political class to begin to find ways to step back from the zero-sum game of racial politics, and begin to embrace our longstanding nature as a salad bowl for trade and culture across the East and West. The more that US global domination frays, and the more that China emerges as a global counterbalance to the West, the important will it be for nations like Malaysia to find a new positioning amidst a shifting geopolitical landscape.
  5. For this to happen, Malay politics needs to break out of its self-victimhood. Enough with the constant begging for scraps off the table of Government. “Ketuanan” does not come in a begging bowl, and the fate of the Malays has always been, and always will be, tied with our ability to step confidently out into the world.
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Today’s Three Things V

  1. Many Malaysians have been complaining about a lack of direction for the Malaysian economy. Today, PM Anwar Ibrahim announced his vision: Ekonomi Madani, Memperkasa Rakyat. The announcement itself is worthy of dissection, which I hope to find time to do some time soon. For now, I can say this: I like the level of Ambition. Top 30 economy in the World! Now, we await the details of how we are supposed to get there.
  2. Anyone who knows some basic amount of physics would know that room-temperature superconductivity is a Holy Grail that could change the way we live. Is LK-99 the new material that would take Moore’ Law to the next level? Some folks are skeptical.
  3. This is the kind of level of Ambition that is needed to take Malaysia to Top 30. One Gigawatts! (And am I the only one here who suddenly thought: hey that sounds familiar!)
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Three Things I am Thinking about Today #5

  1. The Government is tabling a bill to raise Malaysia’s statutory debt ceiling from 60% to 65%, in order to fund stimulus measures to help Malaysians get through the pandemic. I think this is timely, and much needed. What is not clear, however, is whether this is a temporary or permanent raising of the debt ceiling (the title of the Bill suggests that this is temporary, but this is not made fully clear), and whether there is a clear plan for Malaysia to bring its debt levels back down to below 60% once the pandemic is truly over. We must not allow emergency measures to become a slippery slope that drives our nation’s finances into further indebtedness, especially after all the losses that we are incurring over the 1MDB looting. 
  1. While the debate in Malaysia’s parliament over raising the debt limit looks to be perfunctory, the United States seems to be spiraling into yet another bout of partisan bickering over its own debt ceiling. Madness? Yes. But this is the blowback that the US political class has purchased for itself when it walked blindly into the morass of the War on Terror, and the disastrous consummation of its flirtation with nativist no-nothingism with the Tea Party that had eventually led to Trump’s presidency. There is always a price to pay when you play with extremism in the pursuit of narrow parochial interests.  
  1. Here’s an interesting and totally expected thing that usually happens when you conflate a succession race with a plan to recover from a pandemic: the politics will almost always get in the way. What is Singapore thinking? Like mentioned in the article, this is not something that would have happened during Lee Kwan Yew’s time. Another chink in the armour, then, for the PAP government under Lee Hsien Loong?