What's Happening?
A report by Wang Tsai-yi, a non-resident fellow at the Research Institute for Democracy, Society and Emerging Technology (DSET), recommends that Taiwan review entities placed on the U.S. export control list before 2022. This review is crucial to address
enforcement loopholes in Taiwan's own Strategic High-Tech Commodities (SHTC) Entity List. The report highlights that many prominent Chinese technology companies and research institutes are not yet included on Taiwan's SHTC list, despite appearing on the U.S. Bureau of Industry and Security (BIS) Entity List. While Taiwan has closely aligned its SHTC list with the U.S. BIS list since 2022, with a significant overlap of 60.79 percent in 2022 and over 70 percent thereafter, earlier U.S. designations have created gaps. For instance, Chinese memory chipmaker Fujian Jinhua, added to the BIS list in 2018, is not on Taiwan's SHTC list, potentially allowing Taiwanese companies to trade with such entities without violating Taiwan's end-user control rules.
Why It's Important?
This recommendation is vital for Taiwan's economic security and its role in global supply chains. The existence of enforcement gaps means that Taiwanese companies could inadvertently contribute to the technological advancement of entities deemed a national security risk by the U.S., potentially undermining international export control regimes. Given Taiwan's central position in global technology supply chains, particularly in semiconductor manufacturing, aligning its export controls more comprehensively with those of the U.S. is critical. Failure to do so could lead to reputational damage, secondary sanctions, or strained relations with key allies. The report suggests that a thorough review would not only close these loopholes but also allow Taiwan to proactively identify entities that pose economic security concerns, thereby strengthening its own regulatory framework and contributing to broader international efforts to prevent the proliferation of sensitive technologies to adversarial actors. This alignment is also a testament to growing U.S.-Taiwan cooperation on export controls, evidenced by the appointment of an export control officer at the American Institute in Taiwan.
What's Next?
The International Trade Administration is advised to compare the U.S. BIS list with Taiwan's SHTC list, specifically focusing on records from before 2022. The goal is not to automatically incorporate all omitted entities but to strategically decide which ones are prominent enough to be included based on Taiwan's economic security concerns. This review would not require legislative amendments, as the administration, which oversees the SHTC list, has previously made large-scale revisions without changing the law. The report also suggests that Taiwan should play a more proactive role beyond mere compliance in the U.S.-led system, leveraging its practical knowledge of export-control bottlenecks to inform both its own policies and international cooperation. This ongoing process will likely lead to a more robust and adaptive export control framework in Taiwan, enhancing its ability to navigate the complex techno-geopolitical landscape.
Beyond the Headlines
The call for Taiwan to review its export control listings highlights the intricate balance between economic interests and national security in an increasingly interconnected world. It underscores the ethical dilemma faced by companies operating in a globalized economy, where supply chains can inadvertently support entities with problematic affiliations. The deeper implication is the evolving nature of economic warfare and the use of export controls as a strategic tool to limit the technological advancement of geopolitical rivals. For Taiwan, this is not just about compliance but about asserting its sovereignty and aligning its values with democratic partners. The long-term impact could be a more integrated and secure supply chain among like-minded nations, potentially leading to a decoupling of critical technologies from adversarial states and fostering greater resilience in the face of geopolitical tensions.
