The Pie: An Economics Podcast Between a Chip and a Hard Place: The Economics of Security and Sovereignty in Taiwan
May 13, 2025
Economist Chang-Tai Hsieh from the University of Chicago delves into Taiwan's complex political history and its crucial economic ties to China. He discusses the critical role of the Taiwan Semiconductor Manufacturing Company (TSMC) and its international implications. Listeners learn about Taiwan's delicate balance between sovereignty and security amidst rising geopolitical tensions. Hsieh also examines the effects of U.S. policies on Taiwan's economy and the broader semiconductor landscape, shedding light on innovation and industry dynamics.
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Taiwan's Complex Political Status
- Taiwan's political status is highly complex and emotionally charged on both sides.
- It hinges on historical colonialism, wartime changes, and contested legitimacy claims.
Taiwan-China Economic Intertwining
- Taiwan and China have a deeply intertwined and vibrant economic relationship.
- Taiwanese investments significantly shaped China's manufacturing, with many Taiwanese people working there.
Taiwan Feels Vulnerable Like Ukraine
- Taiwan fears it might face abandonment by the U.S. during a Chinese military action, akin to Ukraine's experience.
- U.S. policy remains vague, officially pursuing strategic ambiguity and peaceful resolution.