Chapter 396: No One Has A Choice
“If there is 10% profit, capital will ensure it is used everywhere; with 20% profit, capital becomes active; with 50% profit, capital takes risks; for 100% profit, capital dares to trample all human laws; with over 300% profit, capital dares commit any crime, even risking the gallows.”
This passage was not said by Marx; it is a quote from him in Capital citing Thomas Joseph Dunning in Trade Unions and Strikes: Their Philosophy and Intentions.
Kato Katsunobu knew that this series of harvesting required China’s cooperation to proceed so smoothly.
China’s cooperation means cost, means 4v has no choice.
Because both sides you could lean toward are holding scythes against you, you want to slightly favor Yanjing to prove your value to Washington, you’d better be polite to me, if you’re not polite to me I’ll really go back to Yanjing, trying to make Washington’s harvesting lighter.
Reality is, Washington harvests on one side, Yanjing uses a blower on the other to fiercely push you toward Washington, afraid Washington’s harvesting isn’t ruthless enough.
To make Yanjing make such a big turn, such cooperation, Kato Katsunobu understood this time, it turns out we’re the ones footing the bill in Japan.
Washington harvests, Tokyo foots the bill.
But is the problem really worth such a heavy price?
Kato Katsunobu somewhat suspected Old John Morgan was falsely passing orders.
But he didn’t dare refuse, and after thinking it over, felt it impossible? Core member of the Morgan family, shouldn’t stoop to that, even for 200% profit, impossible to act as Yanjing’s representative? But Thomas Joseph Dunning’s words swirled in his mind.
What if?
After Old John Morgan left, Kato Katsunobu felt deeply uneasy.
Those seemingly dispensable technologies, like mature process equipment, some advanced encapsulation, and non-core semiconductor materials, may seem insignificant alone, but if China’s industrial Cthulhu integrates them all, it will become a force not to be underestimated.
“Too much,” Kato frowned tightly, “This doesn’t align with America’s long-term interests. Unless they have deeper schemes.”
After returning home, he took out his iPhone and called negotiator Akazawa Ryosei far away in America.
“Ryosei,” Kato Katsunobu said wistfully, “I just met with Mr. Morgan, he told me Washington will allow us to export a series of semiconductor technologies to China, very broad scope, even including some compound semiconductor materials.”
Akazawa Ryosei on the other end sounded surprised: “Minister, this sounds too generous. Will Americans do this?”
“My doubt is the same as yours, I need you to confirm immediately if this is really the White House’s official stance, go see Besent, or anyone who can give you a definite answer, be careful not to arouse their suspicion.”
Akazawa Ryosei immediately understood the severity: “Understood, Minister. I’ll arrange it right away.”
After hanging up, Akazawa Ryosei immediately contacted his acquaintance in Washington, eventually arranging a private meeting with Besent.
The meeting was in an unassuming meeting room.
“Mr. Besent, I’m here to confirm some things.” Akazawa got straight to the point, “We’ve heard the US side will relax restrictions on Japan’s export of semiconductor technology to China, including some key materials and equipment, is this true?”
A flicker of barely perceptible hesitation crossed Besent’s face, but he quickly regained composure.
He was about to speak when the door was suddenly pushed open.
“Don’t listen to him!” A familiar loud voice broke the silence.
In walked Big T.
He wore his signature deep blue suit, red tie, and walked to the conference table.
Besent and Akazawa Ryosei both stood up in shock.
“Mr. President?” Besent asked in surprise.
“Ryosei, I’ll tell you personally.” Big T’s voice was full of power, as if the whole room vibrated with him. “You’re right, we will indeed allow Japan to sell these technologies to China. All of them, I mean all.”
Akazawa Ryosei felt a wave of dizziness.
This was an experience unlike any in his career.
An American President personally coming to an informal secret meeting just to confirm intelligence.
Again? Eh, why did I say again?
“Why?” Akazawa Ryosei blurted out, unable to hold back his question.
He looked at Big T, the man at the peak of world power, suddenly appearing in this unassuming room.
Besent’s face was pale, clearly knowing nothing about it.
Big T ignored Besent’s shock, walked straight to Akazawa, with a familiar smug smile.
“I’ll tell you the truth, straight from my mouth, that’s the best, most reliable!” Big T’s voice boomed with unquestionable confidence, as if giving a speech at a grand rally.
Big T laughed heartily, patted Akazawa’s shoulder with such force he nearly stumbled: “Because it’s a great deal, Ryosei! We’re making America great! This harvesting of 4V, Wall Street’s smart guys, especially Old Morgan, they did fantastic.
I told him, ‘John, take all their money!’
He didn’t disappoint me.
They’re emptying 4v’s stock market and bond market, what do we get? We get TSMC! The world’s best semiconductor company, now they’re moving factories here, creating tens of thousands of jobs! That’s real victory!”
Big T’s gaze turned sly, he lowered his voice, leaning close to Akazawa: “You know? That old guy John, he knows I like to win, likes big deals, this time he made a killing, you made a killing, I like this business, everyone wins, especially America!”
Akazawa Ryosei knew the subtext, the other family definitely made a killing in this harvesting.
Big T bluntly defined America’s behavior as harvesting, utterly unconcerned about the impact on allies.
America can casually harvest allies? From economy to industry.
Big T didn’t care at all how allies would think, he knew clearly other countries are trash, even if America goes further, they won’t dare resist.
Because after Soviet Union disappeared, America is even more their only choice, was in the past, is now, Big T believes will be in the future too.
Since it’s the only choice, contribute everything for America’s greatness!
“So, we give China some candy, let them keep cooperating. They’ve always wanted technology, right? Fine, we give it.
But not the best! We give them the old, unimportant junk technologies.
I told my team, give them things they think are important, but actually pose no threat to us.”
Big T paused, tone more serious. “We make them believe they got what they wanted, they’ll pay big, happily take the tech back thinking they won, but we know we gave them an illusion they can never catch up to.”
He gestured a big circle with his hand: “We trap them in it, make them play the game under our rules.
We treat 4v as a pawn, push it out to attract all fire, while we harvest benefits from behind.
Genius strategy, no one could think of it, except me!”
He finally patted Akazawa’s shoulder, as if completing the most important deal.
“Tell Minister Kato, don’t doubt. We know what we’re doing.
This is a 100% perfect deal.
Japan can be our partner, earn some commission, and we, we’ll always be the boss!”
With that, Big T left the room without looking back, leaving stunned Akazawa Ryosei and expressionless Besent.
Akazawa finally understood, this so-called technology transfer is neither goodwill to China, but Big T’s another meticulously planned deal and game for personal and national dual interests.
“Mr. Besent.” Akazawa Ryosei said softly.
Besent shook his head: “Do as Mr. President says, we have no way to refuse Mr. President’s orders.”
Big T is the president in American history with power second only to Little Roosevelt.
Besent could only execute.
After meeting Big T, negotiator Akazawa Ryosei’s mood was extremely complex.
He relayed the news back to Tokyo, and both sides subsequently signed a series of technology transfer agreements.
4v and Mainland have huge trade surplus, largest source is electronic products.
What they export is not single electronic products, but complex supply chains dominated by electronic components.
This includes chips, PCB, passive components, connectors, and various semiconductor materials.
These supply chain upstream and downstream products flow like blood into Mainland’s vast electronics industry, supporting massive manufacturing systems from smartphones, computers to home appliances and car electronics.
This high economic dependence makes its electronic components companies extremely sensitive to Mainland market demand.
When Mainland factories increase orders, their electronic components companies gain hefty profits; conversely, once Mainland market stirs, these companies bear the brunt, facing reduced orders and inventory buildup.
Old John Morgan and his Wall Street elites know this economic structure like the back of their hand.
They know directly attacking TSMC’s stock price now costs high, and after repeated attacks, the market has become desensitized.
But attacking components manufacturers highly dependent on Mainland market is a low-cost, highly effective strategy.
After the tech deal, Morgan’s funds used media and social platforms to loudly proclaim how Japan’s tech exports to China will “enhance China’s electronic components self-sufficiency.”
“China can produce these themselves, what advantage do we have left?”
“China factories will prioritize their own components, what about our companies?”
These worries spread like plague rapidly among electronic components companies led by Hsinchu Science Park.
Listed companies dependent on Mainland market, like IC design companies, PCB giants, and passive components giants, became Morgan’s short selling targets.
Morgan’s funds shorted these companies’ stocks at minimal cost in the stock market, waiting for panic to ferment.
In just weeks, these companies’ stock prices crashed like avalanches. Some neared delisting, market caps evaporating billions of US dollars.
This precise financial surgery not only filled Morgan’s pockets but dealt heavy blows to the real economy.
In the past, Hsinchu companies believed Yanjing would at least provide a meal, a way out, but now that confidence is gone.
Panic unprecedentedly spread, investors dumped 4v assets en masse, causing massive capital outflow.
Facing dual pressure of plunging stocks and reduced orders, many components companies were forced into layoffs, sparking social turmoil.
Without economic support, some promising small and medium tech companies fell into crisis, top-tier talent flowed to more secure firms, mostly to Mainland.
This secondary harvesting dealt a more fatal blow to 4v semiconductor industrial chain than the first.
Because it shook the foundation of the entire industry ecosystem, plunging originally healthy upstream and downstream companies into distress.
No matter how strong TSMC, it needs upstream and downstream capillary enterprises to maintain a healthy ecosystem.
Now, under Morgan’s operations, this healthy ecosystem is falling ill, and not easily solvable minor ailment.
Meanwhile, Old John Morgan’s harvesting art soared.
However, in China’s semiconductor industrial park, the atmosphere was unusually calm, even somewhat deserted.
These equipment provided by Japanese companies looked brand new on the surface, but to Chinese engineers who knew the inside story, they were more like witnesses to Japan’s semiconductor glorious history.
Zhao Ming, this veteran engineer with over twenty years in the semiconductor industry, stood before an etching machine produced by a well-known Japanese manufacturer.
His gaze sharp, seeing through the essence of this batch of equipment at a glance.
“These equipment are models from over a decade ago.” He said to Chinese technocrat Jia Zhen who came to investigate and summarize, voice carrying an indescribable complex emotion.
“Lithography machines are old models, etching machines too.
They are indeed more advanced than our current domestic equipment, but in the cutting-edge fields, they are not in the same league as TSMC’s equipment.”
Disappointment was hard to hide on Jia Zhen’s face.
He once held high hopes, thinking this cooperation would be China’s tech leap, but reality was harsh.
Seeing Jia Zhen’s expression, Zhao Ming hurriedly explained: “No no no, Section Chief Jia, I’m not saying these equipment have no value,” to us, these technologies are far more than they seem.
Nikon mastered lithography technology below 28nm node in 2008, that’s 17 years ago now, I’m just lamenting our gap with Japan in semiconductor field, we have much to strive for.
It can help us save so much time.”
“Comrade Zhao Ming, you mean these over-a-decade-old Japanese equipment are still treasures to us?” Jia Zhen asked.
Zhao Ming didn’t hesitate: “Yes, Section Chief Jia.
Our current domestic equipment has caught up in parameters to their tech back then.
But what we lack is stability and process.”
He paused: “Most importantly, it can help us obtain know-how.”
“Know-how.” Another technocrat repeated the word.
Zhao Ming continued: “Yes, technical know-how.
Previously in lithography, etching and such, though we could make equipment, we often faced low yield rates, unstable equipment issues.
Because we didn’t know why their equipment achieved such stability, why their process flow reached over 90% yield rate.
These Japanese equipment and their bulk transferred technical data, even means of production, are a living textbook.”
Japanese semiconductor companies were starving too, after Washington loosened ties, they sold anything, scrambling to sell tech to China.
Afraid China wouldn’t buy, even selling past floppy disks, paper archives of means of production, including debugging details, production optimization data.
Among them, Lin Ran’s toughness and Old John Morgan’s cooperation made Japan unable to refuse.
Old John Morgan’s such cooperation made Kato Katsunobu even more suspicious, is he still working for Yanjing, otherwise why is a White House official jumping around so eagerly?
“We can reverse engineer, disassemble their equipment, study every part, every design.
We can analyze their process flow, understand how they perfect every step.
This is not just technology, but industrial philosophy.
Their accumulated experience is now laid before us.
We no longer grope in darkness, but explore further on their shoulders.
America thinks they gave us useless junk, unaware these bones contain genes to help us rebuild the semiconductor industry ecosystem.”
Shanghai, Lin Ran was also chatting about this with Song Nanping:
“Most important is not technology, but time.
Everything we do is to save time.
Time is everything, I believe China’s technical personnel will eventually conquer it, but now without spending a single soldier or bullet, we saved at least five years.
That’s the most important.”
