Description
Amidst the intensifying weaponization of economic interdependence, the global semiconductor industry has become the latest battleground for great power competition that promises the winning party a new and enhanced strategic economic arsenal that it can exploit to achieve absolute power advantage. Drawing and building on the weaponized interdependence (Farrell & Newman 2019) and party-state capitalism (Pearson, Rithmire & Tsai 2022) theories, we develop and apply the ‘weaponized party-state interdependence’ (WPSI) framework to map out the party-state created and controlled panopticon and chokepoint effects that great power rivals, specifically, China and the United States (US), utilise to secure absolute positional advantage over the global semiconductor and, in doing so, enhance their absolute power advantage over the existing international system.
A central underlying assumption of the WPSI framework is that the United States (US), especially under President Donald Trump, is increasingly adopting and resembling a party-state capitalism logic similar to that of the Chinese Communist Party (CCP) in China. There are two primary mechanisms through which Trump is able to do this: first, by expanding the ‘Grand Old’ Republican Party’s authority in firms through changes in corporate governance and state-led financial instruments; and second, by enforcing political fealty among various economic actors. These trends have started to blur the distinction between state and private capital in the US, resulting in an ongoing global backlash and a threat to (rather than the protector of) the existing international system and order alongside the CCP’s China Inc.
The paper shows how the pursuit of absolute advantage in the global semiconductor industry creates a paradox where the great power rivals engaging in trade wars are effectively undermining the stability of the global trade system that allows them to weaponize economic interdependence for their own power maximization interests in the first place.
