Taiwan completes first sea trial for domestically made submarine in defense milestone
Taiwan, which China claims as its own territory, has made the indigenous submarine program a key part of an ambitious project to modernize its armed forces as Beijing stages almost daily military exercises to assert its sovereignty.
The submarine program has drawn on expertise and technology from several countries, including the United States and Britain, a breakthrough for diplomatically isolated Taiwan, whose government rejects Beijing's territorial claims.
Taiwan's CSBC, which is leading construction of what is eventually planned to be eight submarines, said in a statement that the first ship, named the Narwhal, had completed its first test at sea, proving systems including propulsion, ventilation and radar.
"CSBC will continue to make adjustments and improvements to the systems based on the test results," it said in a statement, showing pictures of the submarine sailing above water off the southern Taiwanese port of Kaohsiung.
Underwater tests will follow, with the depth gradually increased, the company added.
The Narwhal had been due to be delivered to the navy last year, joining two existing submarines purchased from the Netherlands in the 1980s, but the program has been hit with delays.
Taiwan has said it hopes to deploy at least two such domestically developed submarines by 2027 and possibly equip later models with missiles.
The first submarine, with a price tag of $49.36 billion New Taiwan dollars ($1.67 billion), will use a combat system by Lockheed Martin and carry U.S.-made Mark 48 heavyweight torpedoes.
Taiwan's armed forces are dwarfed by those of China, which has two operational aircraft carriers and ballistic missile submarines and is developing stealth fighter jets.
Taiwan is modernizing its military to be able to fight "asymmetric warfare," using mobile and agile systems like submarines, drones and truck-mounted missiles to fend off its much-larger adversary China.
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Japan Times
10 hours ago
- Japan Times
The AI arms race with China demands scale. The West must think bigger.
Size matters. Economists have long known that; economies of scale are among the building blocks of their science. In the digital era, it quickly became apparent that value was directly proportional to the size of the network (the number of users linked by a particular technology or system). The race to create scale is critical amid the sizzling geopolitical competition over leadership in new technologies. It has assumed even greater urgency in Western capitals in the wake of China's success in that race. They've had to reconceptualize scale to overcome the advantages China has a result of the size of its economy and its population. It's a work in progress and the results are mixed, at best. For those who've forgotten their introductory economics, economies of scale are cost advantages created by expanding operations. As companies build more products, they become more efficient, reducing cost per unit. This allows them to produce even more of that product, reinforcing their competitive advantage and keep the virtuous circle turning. Importantly, size is not the same as scale. Size helps achieve scale, but scale requires efficiencies. Scale is size made meaningful. Some 40 years ago, another economist concluded that the (financial) value or influence of a network — communication devices that could talk to each other — was proportional to the square number of connected users of the system. It's a positive feedback loop: the more users there are, the merrier, and the more money comes in, since consumers pay more for more connections. The two phenomena — economies of scale and network effects — are often confused, but there is a fundamental difference between them: economies of scale are a function of production, while network effects reflect demand. The demand for scale has become an imperative in the age of artificial intelligence. Working AI demands massive amounts of compute — millions of servers running algorithms nonstop to process data — and McKinsey, a global management consulting firm, estimates that it will cost $6.7 trillion worldwide to meet that demand by 2030. Bigger isn't better: it's required, not only to produce good outcomes but to pay for them. Small companies are inherently disadvantaged in this competition since they don't have the deep pockets. The competition to develop that capacity is often likened to an arms race. Spending mirrors that dynamic, as do the consequences of coming up short. (The shock of the DeepSeek AI breakthrough was triggered as much by its cost — a fraction of what the principal AI companies were spending — as its computing success.) Pick your perspective. In the U.S.-China race, the World Economic Forum estimates that the U.S. is winning as a result of $300 billion in AI infrastructure spending in 2024, six times Chinese investment. As a result, the U.S. has 10 times as many data centers as does China and spends nearly four times more on AI servers. In the U.S.-Europe competition, the WEF reckons Europe in 2023 invested $1.7 billion in GenAI, a tiny fraction of the $23 billion spent in the U.S. The EU developed a plan to support development of the European cloud infrastructure and ponied up €1.2 billion. Hold the applause: Amazon Web Services invests more than $30 billion annually. And Japan? Stanford research put its private sector AI investment in 2024 at just under $1 billion, trailing not only the main players but regional countries such as Israel, South Korea and the United Arab Emirates. The race for scale matters. Big companies have more to invest in the R&D that keeps them at the frontiers of the tech competition. The McKinsey Global Institute found that large European firms with more than $1 billion in revenue collectively invest $400 billion a year less than their U.S. counterparts and spend only half as much on R&D. As a result, they grow one-third the speed and generate 4 percentage points lower returns on capital. It should come as no surprise that in one list of 10 critical technologies of the future, Europe leads in just two. MGI estimated that €500 billion to €1 trillion of value added could be at stake annually by 2030. That aligns with the thinking of Microsoft President Brad Smith, who warned that 'AI and cloud data centers represent the next stage of industrialization.' Mary Meeker, one of the first analysts of the digital era, and her colleagues explained that the world's biggest tech companies are spending heavily on AI, 'not just to gather data, but to learn from it, reason with it and monetize it in real time. It's still about data, but now the advantage goes to those who can train on it fastest, personalize it deepest and deploy it widest.' But remember that scale is about making innovation effective. Lab rats aren't enough; their work must be deployed and integrated into the wider economy. Here, China's industrial model matters. Pushan Dutt, professor of economics at INSEAD, the preeminent European business school, explained that 'China's AI ecosystem — marked by a lower cost structure and the availability of open-weight models — lowers barriers and enables rapid scaling and diffusion across consumer and industrial sectors.' China's pragmatic approach — one that focuses on application — facilitates the spread of technology. Its AI policies prioritize solving problems from manufacturing to services. The success of that policy is evident from its domination of new technologies like electric vehicles and solar panels. The explosive growth of China's manufacturing generally is another reflection of its scale. It has a 32% share of global manufacturing, more than five times its share at the turn of the century. In five years, the United Nations estimates that China's share will be four times that of the U.S. — 40% vs. 11%. Sure, there are complaints about overcapacity and China exporting its inefficiencies, but that is just another expression of scale. This poses singular geopolitical challenges. Rush Doshi, a China hand who served in the Biden White House, studied the global U.S. role since World War II and warns that 'China represents the first competitor with true size and scale advantages against the United States.' Writing in Foreign Affairs, Doshi and Kurt Campbell, one of the original Democratic Party Indo-Pacific strategists, promote 'allied scale' as an alternative grand strategy for the U.S. Their logic is simple: 'Strategic advantage will once again accrue to those who can operate at scale. China possesses scale and the United States does not — at least not by itself.' Working with allies and partners, the U.S. can outpace China. Collectively, the U.S. and its allies have approximately three times China's nominal gross domestic product, twice China's purchasing power adjusted for GDP and more than twice China's defense spending. They would have 1.5 to 2 times China's share of manufacturing and would dominate in patents and top-cited publications. And while China currently is the number one trading partner to as many as 140 countries, a collective of the U.S. and its allies would supplant Beijing in those rankings, with the exception of North Korea. Scale is a bipartisan solution. Kori Schake, director of foreign and defense policy at the American Enterprise Institute and a former Republican National Security Council staffer, is on board. She writes that 'without allied assistance, the United States cannot adequately surveil and protect its networks or physical infrastructure, orchestrate an elective economic penalties campaign, project power across the vast Pacific Ocean, launch high-intensity combat operations, resupply its forces or produce necessary munitions.' For some of us, this logic is obvious and unassailable. Making it work, however, requires a new approach to partnership and cooperation. At this moment, it's hard to see a recognition of the need for scale driving decision-making in the West. Barriers to cooperation are proliferating, not decreasing. During the Cold War, the West didn't scale. It didn't need to. The U.S. had allies and partners, but America did the heavy lifting on security — the new reality is reflected in today's demand for bigger contributions — and for much of that time the United States was the unquestioned economic power. Allies and partners contributed manpower, territory (for forward bases) and legitimized U.S. leadership. That wasn't scale as we think about it now. This new world demands a new perspective. Scale is an essential element of that framework: We ignore it at our peril. Brad Glosserman is a senior adviser at Pacific Forum and the author of "Peak Japan." His upcoming book on the geopolitics of high-tech is expected to be released by Hurst Publishers this fall.
Japan Times
11 hours ago
- Japan Times
As Trump courts a more assertive Beijing, China hawks are losing out
In recent years, one of China's biggest requests of U.S. officials has been that the United States relax its strict controls on advanced artificial intelligence chips, measures that were put in place to slow Beijing's technological and military gains. Last week, the Trump administration did just that, as it allowed the world's leader in AI chips, U.S.-based Nvidia, to begin selling a lower-level but still coveted chip known as H20 to China. The move was a dramatic reversal from three months ago, when U.S. President Donald Trump banned China from accessing the H20, while also imposing triple-digit tariffs on Beijing. That set off an economically perilous trade clash, as China retaliated by clamping down on exports of minerals and magnets that are critical to American factories, including automakers and defense manufacturers. China's decision to cut off access to those materials upended the dynamic between the world's largest economies. The Trump administration, which came into office determined to bully China into changing its trade behavior with punishing tariffs, appeared to realize the perils of that approach. Now, the administration has resorted to trying to woo China instead. Officials throughout the government say the Trump administration is putting more aggressive actions on China on hold, while pushing forward with moves that the Chinese will perceive positively. That includes the reversal on the H20 chip. The H20 decision was primarily motivated by top Trump officials who agreed with Nvidia's arguments that selling the chip would be better for American technology leadership than withholding it, people familiar with the move say. But Trump officials have also claimed that it was part of the trade talks. After telling Congress in June that there was "no quid pro quo in terms of chips for rare earths,' Scott Bessent, the Treasury secretary, reversed those comments on July 15, saying that the H20 move was "all part of a mosaic' of talks with China. "They had things we wanted, we had things they wanted, and we're in a very good place,' he said. A Chinese Ministry of Commerce official seemed to reject that Friday, saying that the United States had "taken the initiative' to approve the H20 sales. China believes the U.S. should continue to remove its trade and economic restrictions, the official said. U.S. President Donald Trump, hosting a digital assets summit, is joined by Commerce Secretary Howard Lutnick (left), Treasury Secretary Scott Bessent (second left) and crypto and AI czar David Sacks (right) at the White House in Washington on March 7. | Haiyun Jiang / The New York Times A person familiar with the talks, who spoke on condition of anonymity because he was not authorized to speak publicly, said that the H20 chip was not specifically discussed in meetings between Chinese and U.S. officials in Geneva and London this spring. But the reversal was part of a more recent cadence of warmer actions the United States and China have taken toward each other. For instance, Beijing agreed in recent weeks to block the export of several chemicals used to make fentanyl, an issue Trump has been concerned about. Recent events have underscored the influence that China has over the U.S. economy. When Trump raised tariffs on Chinese exports in April, some top Trump officials thought Beijing would quickly fold, given its recent economic weakness. Instead, Beijing called Trump's bluff by restricting rare earths needed by American makers of cars, military equipment, medical devices and electronics. As the flow of those materials stopped, Trump and other officials began receiving calls from CEOs saying their factories would soon shut down. Ford, Suzuki and other companies shuttered factories because of the lack of supply. Trump and his top advisers were surprised by the threat that Beijing's countermove posed, people familiar with the matter say. That brought the United States back to the negotiating table this spring to strike a fragile trade truce, which Trump officials are now wary of upsetting. That agreement dropped tariffs from a minimum 145% to 30%, with the Chinese agreeing to allow rare earths to flow as freely as before. The administration's caution when it comes to China has been amplified by Trump's desire for an invitation to Beijing later this year. The president, who has been feted on other foreign trips, wants to engage in face-to-face trade negotiations with Chinese leader Xi Jinping. Howard Lutnick, the commerce secretary, has begun recruiting CEOs for a potential delegation, setting off a competition over who will get to ride in Air Force One, according to people familiar with the plans. Craig Allen, a retired diplomat, said both countries were "clearly preparing for a summit meeting,' adding, "that's bringing forth measures that the other side wants and it's also holding back measures that the other side doesn't want.' "It's like a dance,' Allen said. "One side makes a move, the other side makes a move to correspond to that.' The Commerce Department declined to comment. The White House, the Treasury Department and the Office of the United States Trade Representative did not respond to a request for comment. "The government understands that forcing the world to use foreign competition would only hurt America's economic and national security,' said John Rizzo, a spokesperson for Nvidia. A Chinese bargaining chip Opposition to China has fueled bipartisan action for the past decade. Now, Trump's more hawkish supporters are quietly watching as the president remakes the party's China strategy. Though few are willing to speak out publicly, officials in the Trump administration and in Congress have privately expressed concern that the trade war has given China an opening to finally bring U.S. technology controls onto the negotiating table. Christopher Padilla, a former export control official in the George W. Bush administration, said the fact that the United States was now negotiating over what were supposed to be security restrictions was "a significant accomplishment for the Chinese.' A computer processing chip manufactured by Nvidia on display at a conference about artificial intelligence in San Jose, California, on March 19 | Mike Kai Chen / The New York Times "They've been after this for decades, and now they've succeeded,' he said. "I assume the Chinese are going to demand more concessions on export controls in return for whatever we want next.' Trump was the first to harness the power of U.S. export controls, by targeting Chinese tech giant Huawei and putting global restrictions on American technology in his first term. But the Biden administration expanded those rules. Concerned that China's growing AI capacity would advance its military, Biden officials cracked down on exports of Nvidia chips, seeing them as the most effective choke point over Chinese AI capabilities. Since then, when Chinese officials raised their objections to U.S. technology controls in meetings, U.S. officials had responded by insisting that the measures were national security matters and not up for debate. But in the meeting in Geneva in May, China finally had a powerful counterargument. Beijing insisted that its minerals and magnets, some of which go to fighter jets, drones and weaponry, were a "dual-use' technology that could be used for the military as well as civilian industries, just like AI and chips. It demanded reciprocity: If the United States wanted a steady flow of rare earths, Washington should also be ready to lessen its technology controls. It's not clear exactly what the United States agreed to in Geneva: The White House released a joint statement about the meeting, though more detailed text has not been made public. But when the United States put out an unrelated export control announcement the day after the Geneva summit concluded, China responded angrily, saying the statement "undermined the consensus' the countries had reached. In a notice May 13, the Commerce Department said that using Huawei's AI chips "anywhere in the world' was an export control violation. The notice was directed at other nations considering purchasing Huawei chips, people familiar with the move said, not the Chinese. The announcement appeared to take other parts of the Trump administration by surprise, and within hours, the language in the release was walked back, though no policy changes were made. Bessent and Jamieson Greer, the trade representative, expressed concerns that such moves could damage trade talks with China, people familiar with the incident said. China once again clamped down on rare earth exports. Trying to find its own leverage, the United States responded by restricting exports of semiconductor design software, airplane parts and ethane. The two sides restored their truce in a meeting in London in June. Since then, trade in those products has restarted. But U.S. companies complain that Chinese licenses for rare earth magnets are limited to six months, and that the Chinese government is requesting proprietary information to obtain those shipments. Beijing has also continued to build out its export controls. On July 15, the day after Nvidia said it would be permitted to sell the H20 in China, Chinese officials announced new restrictions on exports of battery technology. The United States has been trying to decrease its dependence on China for rare earths, but there is no quick solution. China has a powerful hold over numerous industries, ranging from pharmaceuticals to solar panels to drones. "The challenge for the Trump administration is, how do they get out of this quagmire?' said Jimmy Goodrich, a senior adviser for technology analysis to the Rand Corp. "It appears some competitive U.S. actions are now at the whims of Beijing, who can now determine the time, place and nature of U.S. tech and trade policy toward China.' Dealmakers in the White House The change in the relationship with China has coincided with a separate shift in the administration, in which officials who favor technology controls on China have been sidelined in favor of those who support the tech industry's ambitions to sell abroad. Lutnick and Marco Rubio, the secretary of state who has long been an ardent China critic, have hewed closely to the position of the president, who is more of a dealmaker than a national security hawk. And hawkish members of the National Security Council have been fired in recent months, after being accused of insufficient loyalty. U.S. President Donald Trump meets with Chinese leader Xi Jinping at the Group of 20 Summit in Osaka in June 2019. | Erin Schaff / The New York Times Their absence has paved the way for officials like David Sacks, the White House AI czar, who has criticized export controls, to push for tech companies to have freer rein. Nvidia's CEO, Jensen Huang, has gone on a lobbying blitz in Washington, pushing politicians to open China for AI chip sales. Huang has contended that blocking U.S. technology from China has backfired by creating more urgency for China to develop its own technology. He has argued that the Chinese military won't use Nvidia chips, and pushed back against Washington's consensus that China is an adversary, describing it a "competitor' but "not our enemy.' Others have challenged those assertions, pointing to past research that the Chinese military has placed orders for Nvidia chips. Scientific papers published earlier this year also showed Chinese researchers with ties to military universities and a top nuclear weapons lab using Nvidia chips for general research. Rizzo, the Nvidia spokesperson, said in a statement that "non-military papers describing new and beneficial ways to use U.S. technology promote America.' In a letter Friday, John Moolenaar, the Republican chair of the House Select Committee on China, said the H20 chip had aided the rise of the Chinese AI model DeepSeek and would help China develop AI models to compete with American ones. These arguments do not appear to have persuaded the president. In an Oval Office meeting with Huang in July, Trump agreed with Nvidia that keeping American chips out of China would only help Huawei, and decided to reverse the H20 ban. People familiar with Trump's views say he has always viewed export controls more transactionally. In his first term, Trump agreed to roll back U.S. restrictions on ZTE at the urging of Xi. In this term, Trump and his advisers have begun using America's control over AI chips as a source of leverage in negotiations with governments from the Middle East to Asia. With China, Trump has his own long-standing aspirations. He believes that U.S. businesses have been getting ripped off for decades, and that he can be the one to fix it, particularly if he negotiates directly with Xi. His advisers have begun strategizing toward a more substantial trade negotiation with China focused on market opening, as well as the potential visit this fall. This article originally appeared in The New York Times © 2025 The New York Times Company
NHK
12 hours ago
- NHK
China's clothing factories battle with US tariffs
China's clothing industry has been hit hard by US import tariffs. We follow three Chinese factory owners who are finding ways to deal with the unstable situation.
