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So interesting how an existential threat — near-term: Russia/Ukraine; longer-term: China/Taiwan — helps focus the national mind.
The Biden Administration announced on Tuesday that, in rapid-fire sequence following the launch of the multi-lateral Indo-Pacific Economic Framework (IPEF) in Tokyo last week, the U.S. Government is making a decisive step, through Executive Action, in the direction of a bilateral U.S.-Taiwan Free Trade Agreement (FTA).
The economic logic in support of a U.S.-Taiwan FTA was evident 20 years ago. Here, dusted off, are two publications which make that point:
Now, finally, U.S. domestic political logic is swinging in line with the geoeconomic imperatives. If it comes to pass, it will have been worth the wait.
After a puzzling on-again, off-again trade action against China’s information and communications technology (ICT) giant ZTE in 2018, the Trump Administration began sanctioning China’s number #1 ICT player Huawei in May 2019. The sanctioning action involved putting Huawei on a Commerce Department “entity list” and thereby restricting U.S. suppliers from selling their goods and technology to Huawei.
As with all of Trump’s trade actions against China, impulse outweighed well thought-out execution in the Huawei crackdown. Initially, some sales were allowed and others denied without clear criteria being communicated to U.S. industry. Later, without preparatory signaling, the Huawei campaign was intensified by expanding U.S. government authority to require licenses for sales of semiconductors made abroad with American technology.
The fitfulness of this policy can be measured by (1) the number of licenses (and dollar value of affected goods and technology) pending but held up in the inter-agency process and (2) the number of licenses (and dollar value of affected goods and technology) which had been applied for by U.S. companies but not processed towards the end of the Trump Administration. (As things stood at the time of the November 3rd election, the expectation was that products in both categories which had clear 5G application would likely be rejected while non-5G products would likely be processed on case-by-case basis.)
Meanwhile, in the international sphere, the Trump Administration pursued a parallel campaign to try to persuade traditional allies to disallow Huawei technology from 5G infrastructural build-out in their respective markets on the grounds that – despite price and performance competitiveness — Huawei’s products represent a national security threat. The results of this international campaign were mixed at best, not least because many of these traditional allies had themselves been targets of different tariff sanctions under Trump’s America First trade policy. Without delving into the changing fortunes of this campaign at different times in different parts of the world, a summary headline on November 3rd might have read “Trump’s 5G Campaign Against Huawei: Embraced in India, Accommodated in the UK, Begrudged in Germany and Repudiated in Thailand and Elsewhere.”
The Biden Administration, while making a quick and clean break from Trump Administration trade policy in the area of climate change mitigation and clean energy technology, has largely kept the Trump Administration domestic policy of restrictive licensing for sales of advanced ICT goods in place. At least, it has made clear that no substantive change should be expected until after the completion of a whole-of-government review of China trade policy and a parallel review of strategic global supply chains which includes semiconductors. In the international arena, it has relaxed the narrowly-focused pressure campaign against Huawei adoption in favor of a more broadly-conceived alliance strategy to rally traditional allies and other democracies to rise to the 21st century challenge posed by China’s autocratic model.
So where do things stand today? The restriction of supplies of U.S. advanced semiconductors to Huawei under both the Trump and Biden Administrations has taken the biggest toll on Huawei. Less impactful but still a headwind for Huawei has been the doubt sown internationally as the U.S. and China edge closer towards global confrontation and supply chain de-coupling. The result? Huawei reported last Friday its third straight quarterly decline in revenues, falling a significant 38% against 2021Q1 results.
Huawei is likely to remain at the center of a highly-fraught tug-of-war between the U.S. and China over 5G. On one side, China has ability to leverage the world’s largest installed base of advanced mobile phone users in the world. On the other, the U.S. dominates the global market for the advanced microchip designs on which advanced telecom markets depend. And the U.S. maintains close partnerships with the world’s leading microchip fabricators in Taiwan and the makers of the world’s leading fabrication equipment in the Netherlands and elsewhere.
Expect more tremors and seismic activity on this fault-line for the foreseeable future. Just last week, the PRC government issued retaliatory actions against Huawei’s main Western rivals – Sweden’s Ericsson AB and Finland’s Nokia, among others. And, as fall-out from the recent spread of the SARS-COV-2 Delta-variant in China, it was announced over the weekend that the World 5G Conference – scheduled for August 6-8 in Beijing – would be postponed indefinitely. Pressure continues to mount while chances to release that pent-up pressure close off.

On January 13th of this year, President Trump abruptly ordered the termination of the U.S.-China EcoPartnership Program. Seven days before leaving office and without notice, Trump turned the lights off on this 10-year old program, pulling the rug out from under 36 committed and on-going bi-national projects to lower carbon-emissions at global scale.
The Biden Administration is assessing its options for re-vitalizing, in some shape or form, this model of innovative and impactful public-private collaboration to put a dent in global greenhouse gas emissions. This might involve replication of the program to India. ReGen250 is already in the starting gate with a U.S. Mid-Atlantic/State of Maharashtra candidate program should that take shape, as is described on pages 8-9 of our article published last month in the peer-reviewed science journal Environmental Progress and Sustainable Energy.
In the meanwhile, we are pressing forward with unofficial support from the two U.S. Government agencies which ran the EcoPartnership program for ten years — the U.S. Department of State and the U.S. Department of Energy — on a purely private and sub-national basis. Our goal in China looking forward is to explore the possibility of expanding from a regional effort (low-carbon collaboration between the U.S.-Mid-Atlantic and the Jing-Jin-Ji (京津冀) region of Beijing, Tianjin and Hebei Province to national scale.
How will we accomplish this without the direct support of the U.S. Government? The first step was to confirm the Biden Administration’s encouragement of trade with China in support of Paris Accord goals and then to renew our region-to-region BE Better program partnership with our primary partner in China, the TEDA EcoCenter. These steps were taken last quarter.
The next steps involve exploring prospects for the resumption of the Sino-U.S. Eco Park national-level opportunity with the Green Development League as outlined at the 2020 U.S.-China EcoPartnership Summit. (As described in detail in a prior post, the Green Development League comprises the 36 top-ranked NETDZs throughout China and the GDL Secretary-General is our original EcoPartnership partner (the TEDA EcoCenter and its Director Madame Yuyan Song).
As the exclusive U.S.-based working group member for the proposed Sino-U.S. Eco Park, China Partnership would leverage expertise and input from (1) our region-to-region BE Better program partners (experts in “energy-efficient, smart and healthy built environments” for industrial park users) as well as (2) our U.S.-China BEST Cities partners (with additional constituencies of support to include the U.S.-China Business Council, the U.S. Industry Advisory Board of the U.S.-China Clean Energy Research Center for Building Energy Efficiency (CERC-BEE), the National Governors Association, and the National League of Cities) in order to identify a comprehensive range of U.S. clean energy technologies and infrastructures from across eastern, central and western regions of the United States to be incorporated into the Sino-U.S. BE Better Eco Park model.

The primary impact of this milestone — CPGP’s formally joining the Green Development League’s working group for design of a Sino-U.S. Eco Park with scalability and replicability to multiple locations throughout China — is literally “to put the U.S. on the map” alongside eight other similar International Eco Parks already functioning in China under PRC Ministry of Commerce auspices. These eight other Eco Park projects represent mostly Sino-European collaborations (e.g., Sino-German Eco Park, Sino-Swiss Zhenjiang Eco Park, Sino-Austrian Eco Park, Sino-Finland Beijing Eco Park) and, to date, none represents a Sino-U.S. collaboration. The CPGP/U.S.-China BEST Cities model was selected, following the March 27, 2018 deadline for application, due to its unique structure of open collaboration designed to introduce U.S. urban clean energy infrastructures and technologies to TEDA and the 35 other top National Economic-technological Development Zones (NETDZ) in the Green Development League.
Using comparables drawn from the realized, real-world experience of the Sino-German Eco Park in Dalian but adjusted to account for the relatively greater GDP of the U.S., a Sino-U.S. BE Better Eco Park leveraging our EcoPartnership’s platform of energy-efficient, smart, healthy built environment and clean manufacturing for industrial park application should reasonably be expected to realize within its initial 5 years:
• As many as 300 signed project agreements (with nearly 60% of those either in production or under construction during that timeframe) representing total investment of 100 billion RMB (approx. USD 15 billion at today’s exchange rate)
• As many as 90 of these projects would be expected to fall in the high-end manufacturing and new energy field with total investment of 67.5 billion RMB (approx. USD 10 billion at today’s exchange rate)
• As many as 80 of these projects would be expected to fall in the advanced services sector with total investment of 35 billion RMB (approx. USD 5 billion at today’s exchange rate)
We are now actively exploring the most practical route for realizing this goal which would involve resumption, post-Trump Administration, of our primary partnership model with (a) TEDA, (b) the 36 GDLs and (c) the 219 NETDZs. Additionally, we have recourse to a secondary partnership model focused on the Jing-Jin-Ji/Xiongan New Area mega-development project.
With respect to the 35-year macroeconomic development effort ushered in by Deng Xiaoping and the Shenzhen and Pudong macro-development projects, Xiongan has both continuities and distinctive differences. One similarity is the size envisioned for the Xiongan New Area -– roughly 50% bigger than Pudong (east of Shanghai) and slightly larger than Shenzhen (to the north of Hong Kong). While Xiongan can be thought of as culminating the coastal progression of these macro-projects–- starting in the south with Shenzhen in the 1980s and moving to the central coast with Pudong in the 1990s -– the final, northern leg of this triad was wobbly at first. President Hu Jintao and Premier Wen Jiabao initially envisioned the third macro-project leg as being Binhai to the northeast of Tianjin. Post-2012, however, plans for Binhai lost most of their momentum and it was only with President Xi Jinping’s emergence in power that priority was shifted from Binhai to Xiongan. It is more in the discontinuities between Xiongan and the earlier Shenzhen and Pudong macro-projects that Xiongan’s significance can best be understood. The first 30 years of the PRC’s post-Cultural Revolution industrial development was based on a high-carbon model. (This is frequently referred to in China by the phrase 先污染后治理 meaning “pollute first, clean up (or remediate) later”). In contrast, the Xiongan industrial model championed by Xi Jinping focuses on a different set of values for the next 30-year-or-so phase of China’s development in the 21st century: the goals of (1) promoting and putting into practice low-carbon industrialization and sustainability innovations and (2) lessening social inequality and narrowing the gap between rich and poor in shared benefits of industrialization and economic development.