Nearshoring and strategic industries
Europe and the US have launched ambitious subsidy programs to encourage the creation or relocation of factories to their territory and that of their neighbors
As China’s military and technological capabilities advance, the tension of this new superpower with the West, as well as with most of its neighbors in Asia, including Japan, Vietnam, the Philippines and of course Taiwan, becomes more acute.
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The tension with Taiwan is undoubtedly the most acute. China has considered it a rebel province since 1949, when the communist party took control of China and the nationalist party fled to the island of Taiwan. China hopes to eventually be “reinstated,” whether by its own decision or by force.
The latter scenario would begin with an air and naval blockade of the island, followed by a massive amphibious invasion, for which Beijing is not yet prepared. Even so, on October 14, China carried out an exercise called Joint Sword 2024B that simulated an air-naval blockade of the island.
The war games involved 153 combat and electronic warfare aircraft – the largest concentration of these so far – 14 naval warships – including one of its three aircraft carriers – and 12 patrol boats from its coast guard. The ships circumnavigated Taiwan, while the aircraft repeatedly crossed the imaginary line of control that separates the island from the mainland. Taiwan is special because it concentrates 90 percent of the production of semiconductors.
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Which are the “atoms of the future,” are the components for any electronic device to function. The more functions are required from an electronic device, the more and better semiconductors it will need. With the development of AI and its application in commercial and defense sectors, the semiconductor market will grow exponentially. Therefore, keeping this large production center out of China’s reach is of vital importance to the West.
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Taiwan’s main partner is the same country that threatens it: China. The fact that Taiwan keeps Beijing dependent on its supply serves as a bargaining chip for it, since according to several analysts, a week of blockade of Taiwan would lead to the loss of some 300 million jobs in China.
The country launched a huge program to build semiconductor factories on its territory, but it has not yet managed to match either the quantity or the quality of Taiwanese semiconductors. Both Europe and the United States have also launched ambitious subsidy programs to encourage the creation or relocation of factories to their territory (onshoring), to that of their neighbors (nearshoring) and/or to that of their allies (friendshoring) with the intention of maintaining control over their supply chain, particularly to supply their defense and high-tech industries.
And this is precisely where Mexico enters the equation. With vast mineral resources, skilled labor for manufacturing, talent for design, advanced industrial infrastructure in development, relevant trade agreements and geographic proximity to the market, Mexico has a very relevant competitive advantage to attract investment and develop.
Several state governments such as Querétaro, Jalisco and Baja California have made efforts to attract investment to their technological clusters and industrial corridors. The new administration seems to understand its options and is working on a Master Plan. A connection with the public and private industrial defense sector is missing, to really enter the game of strategic industries.
BY IÑIGO GUEVARA
DIRECTOR OF JANES INTELLIGENCE COMPANY AND VISITING SCHOLAR OF THE ATLANTIC COUNCIL, IN WASHINGTON, D.C.
Información original publicada en El Heraldo de México.
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