TSMC the sort of crown jewel of Taiwan's technology industry having success early in the U.S. and the support of the U.S. to do it in the context of China.

That's a difficult one.

That's right.

This is really very good news.

And it means that the Biden policy of both having some tough export controls on certain very small critical technologies but also these subsidies.

I think TSMC got six billion in in subsidies five billion in loans.

Other companies are getting similar.

That.

Project of pushing our semiconductor industry forward is actually working.

We come to you because of your rich experience when it comes to foreign policy the work that you do with the Aspen Strategy Group the work you've done with the U.S. government thus far.

Do you.

What do you grade this focus of the United States on on ensuring of chip supply from an A to a D.

Are they surpassing expectations.

It's a good question.

I would give it about an A minus.

So the important thing is to keep our eye on the long term ball.

There are certain key technologies where the U.S. and our competitors are more and more competitors in that space.

We do that in two ways by slowing them down.

That's the export controls and by speeding ourselves up.

My personal view is that we've done pretty close to what we can do to slow the Chinese down.

They're great entrepreneurs themselves.

We've had some very tough export controls on the most advanced chips and also on the tools that makes the U.S. side won't slow China down.

It just means our companies won't have the revenue that they need to fund the research and development to keep ourselves in the lead.

Let's just set the context of this week as well because there was some hiccups shall we say to the U.S. focus on containing semiconductor expertise limiting it from going into Chinese hands in particular.

We hear that TSMC has had to admit that somehow its chips are working its way into Huawei's products even though Huawei has been cut off in theory since 2020.

News today that Al chip technology said it has no direct or indirect business dealings with Huawei.

Of course many trying to work out how and which client of TSMC is allowed the chips to get into the hand of Huawei.

But how effective can these limitations really be on you.

That's a perfect question.

And this example shows exactly how difficult it is.

You know there are lots of well-meaning people in the U.S. government in European governments trying to get this right and trying to make the controls narrowly focused and effective.

Very very hard to do.

I think they're doing quite a good job.

I worry however that for example you see some folks in the might go into a Trump administration very tough on China.

China hawks saying well we're just going to control more.

We're going to put more companies on the entity list.

And as you're seeing with this TSMC example even when people are well-meaning it's just very very difficult to do things with controls alone.

You've got to run faster.

Which is more powerful then.

We've covered the export controls part of this story deeply on this program.

But they almost work in parallel.

You sort of can't have one way out the other if your end goal is to make your own nation more competitive in any given field or domain.

That's absolutely right.

I'm firmly on the side of running faster is better.

We have an amazing innovation engine.

I live out here in fast.

One of the things that's underappreciated everyone always talks about the chip sack the subsidies to semiconductor fabs.

What they don't talk about so much is that there was supposed to be one hundred and seventy billion dollars for going into basic science R&D funding.

This is really important.

This creates all of the technologies of the future.

You know OK Siri GPS.

And so those are the questions.

How closely do you follow and assess their response to the TSMC situation.

China is great.

They're doing a lot of innovating.

Their companies are excellent.

If you look at for example what they're doing on artificial intelligence they're large language models.

The biggest models in A.I. are depending who you ask three six nine months behind because of our chips controls.

But on certain other parts of artificial intelligence computer vision surveillance drones they're really first rate.

So the Chinese are going to keep running fast.

And I would just say one thing.

This policy needs to be nuanced.

It's not like we are competing with China on absolutely every technology.

There are certain areas where we should still be really sensitive.

That can be dual use where we need to be more careful.

Push us forward then.

No matter what the administration after November 5th 6th will there forever be this idea of tension and ultimately opposing nations between China and U.S. when it comes to A.I.

Do you see any grounds for a more dovish approach.

Yeah I do think we are entering a phase where the Chinese government led by Xi Jinping specifically has said they want to advance in certain technologies A.I. semiconductors 5G 6G certain others.

They've set this out in the plan and they want to have a very dominant military.

And those two things are quite worrying.

Understandably so to the U.S.

Europe our friends and allies.

And so I do think no matter who wins our election this part of the technology race and I don't call it a war I call it a tech race is going to continue.

This is a big long term push that's going to continue.

That and lots of other areas when I see companies in the consumer sector and agriculture and other places still doing a lot of work with China.

It doesn't mean that there has to be a complete decoupling.