Low probability of China trying to seize Taiwan in near term -top U.S. general

By Idrees Ali and Phil Stewart

WASHINGTON (Reuters) -The top U.S. general said on Thursday there was a low probability that China would try to take over Taiwan militarily in the near-term as Beijing has some way to go to develop the capabilities needed.

While there has been increasing concern in Taiwan and among some U.S. lawmakers about Chinese military activity near the island, like flying jets in Taiwan’s air defense identification zone (ADIZ), U.S. military officials have told Reuters that such moves are not overly concerning.

Chairman of the Joint Chiefs of Staff General Mark Milley told lawmakers that while Taiwan was still a core national interest of China, “There’s little intent right now, or motivation, to do it militarily.”

“There’s no reason to do it militarily, and they know that. So, I think the probability is probably low, in the immediate, near-term future,” Milley said during a Congressional hearing.

“My assessment in terms of capability, I think China has a ways to go to develop the actual, no-kidding capability to conduct military operations to seize through military means the entire island of Taiwan, if they wanted to do that,” he added.

The United States is Taiwan’s strongest international backer and main source of arms, which angers China.

Beijing says the democratically ruled island is part of “one China” and routinely denounces foreign involvement as an interference in its internal affairs.

Democratic and Republican members of the U.S. House of Representatives will introduce legislation this week seeking to boost U.S. support for Taiwan, part of an effort in Congress to take a hard line in dealings with China.

NATO leaders, encouraged by U.S. President Joe Biden, warned at a summit on Monday that China presents “systemic challenges,” taking a more forceful stance towards Beijing.

Earlier this week, twenty-eight Chinese air force aircraft, including fighters and nuclear-capable bombers, entered Taiwan’s ADIZ, the largest reported incursion to date.

Like most countries, the United States has no formal diplomatic ties with Taiwan.

(Reporting by Idrees Ali and Phil Stewart; Editing by Alistair Bell)

Taiwan reports largest incursion yet by Chinese air force

TAIPEI (Reuters) – Twenty-eight Chinese air force aircraft, including fighters and nuclear-capable bombers, entered Taiwan’s air defense identification zone (ADIZ) on Tuesday, the island’s government said, the largest reported incursion to date.

While there was no immediate comment from Beijing, the news comes after the Group of Seven leaders issued a joint statement on Sunday scolding China for a series of issues and underscored the importance of peace and stability across the Taiwan Strait, comments China condemned as “slander.”

Chinese-claimed Taiwan has complained over the last few months of repeated missions by China’s air force near the self-ruled island, concentrated in the southwestern part of its air defense zone near the Taiwan-controlled Pratas Islands.

The latest Chinese mission involved 14 J-16 and six J-11 fighters, as well as four H-6 bombers, which can carry nuclear weapons, and anti-submarine, electronic warfare and early warning aircraft, Taiwan’s Defense Ministry said.

It was the largest daily incursion since the ministry began regularly reporting Chinese Air Force activities in Taiwan’s ADIZ last year, breaking the previous record of 25 aircraft reported on April 12.

The ministry added that Taiwanese combat aircraft were dispatched to intercept and warn away the Chinese aircraft, while missile systems were also deployed to monitor them.

Not only did the Chinese aircraft fly in an area close to the Pratas Islands, but the bombers and some of the fighters flew around the southern part of Taiwan close to the bottom tip of the island, according to a map the ministry provided.

China’s Defense Ministry did not respond to a request for comment.

China has in the past described such missions as necessary to protect the country’s sovereignty and deal with “collusion” between Taipei and Washington.

The United States, which like most countries has no formal diplomatic ties with Taiwan, has watched with alarm the stepped up tensions with Beijing.

China describes Taiwan as its most sensitive territorial issue and a red line the United States should not cross. It has never renounced the possible use of force to ensure eventual unification.

(Reporting by Ben Blanchard, Editing by Raju Gopalakrishnan)

U.S. chip subsidy effort faces pushback over China issues

By Stephen Nellis, David Shepardson and Michael Martina

WASHINGTON (Reuters) – A series of amendments for a $190 billion U.S. Senate bill aimed at countering China’s technology challenge are in limbo after business groups protested proposals intended to ensure that none of the money finds its way to China or other U.S. rivals.

New regulations or reviews of investments or deals in China could disrupt U.S. businesses’ future operations in that country, which include semiconductors and medical equipment. The bilateral trade deficit has run more than $100 billion a year since 2002.

Senators from both sides of the aisle want “guardrails,” such as mandatory security disclosures and interagency reviews to stop U.S. businesses from compromising national security by outsourcing critical technologies to China.

The Senate bill authorizes $120 billion for high-tech research and another $54 billion to subsidize U.S. semiconductor production. For chip factories, it makes no distinction between foreign recipients and U.S.-based firms in determining who gets funds for U.S. facilities.

A key goal of the funding is to bring the world’s most advanced chip plants to the United States, and only Taiwan Semiconductor Manufacturing Co and Korea’s Samsung Electronics Co Ltd have the technology to do that.

Florida Republican Senator Marco Rubio has proposed an amendment requiring U.S. national security officials to screen recipients and require disclosure of funding or support from foreign entities, including the Chinese government or Chinese state-owned enterprises.

TSMC and Samsung both have operations in China.

Another amendment from Democratic Senator Bob Casey and Republican Senator John Cornyn would require an interagency review of any U.S. investments in China or a shortlist of adversarial countries. That would mark a huge change for U.S. law, which for decades has had provisions for screening inbound investments, but not for outbound.

“If a company wants to offshore semiconductors to China, we need to know about it,” Casey said from the Senate floor on Wednesday. “Yet, business interests, like the U.S. Chamber of Commerce and the U.S.-China Business Council, are organizing against this commonsense proposal.”

Casey took to task Republicans opposing the measure, saying they talk tough on China, but they “cut and run” when it comes to taking on big business.

John Murphy, the U.S. Chamber’s senior vice president for international policy, said existing laws, such as the Export Control Reform Act of 2018 (ECRA), could address the China investment issue, and that the proposal needed more discussion in the Senate before being added to such a sweeping package.

“Congress and the administration should focus on using the legal tools on which the paint is barely dry,” he said, referring to ECRA.

One Senate aide cited fierce opposition to the Casey-Cornyn amendment from businesses and some Republicans, including Senator Mike Crapo, the ranking member on the Senate Finance Committee, adding: “We’re not confident that it’s going to come to a vote.”

Crapo declined to comment.

FUNDAMENTAL FLAW?

Senate Majority Leader Chuck Schumer has sought to get the U.S. Innovation and Competition Act passed this week, but Republicans insist the bill is not ready.

“There is an increasing consensus that the lack of guardrails is the fundamental flaw of the bill,” a Republican House aide said of the Senate package.

The House of Representatives is planning its own version of a China bill and could add other provisions on chips funding as well.

Rubio’s office said it was still working on getting his amendment incorporated. When he proposed his amendment for counterintelligence screening last week, he noted the much needed investments would “mean nothing if they are stolen by foreign adversaries, including the Chinese Communist Party.”

Any restrictions on subsidies to foreign companies would likely benefit Intel Corp, the long-time U.S. national champion in chip-making that has promised to redouble its efforts in the most advanced technologies and spend more than $20 billion on new U.S. plants.

Intel last year moved to sell off its only chip factory in China to SK Hynix.

Derek Scissors, of the conservative American Enterprise Institute, who studies China and security issues, said companies should be forced to make a choice.

“If you receive federal government money, you cannot expand your business in China from that point. The end. And if you don’t like that, don’t take the federal money,” Scissors said.

(Reporting by Stephen Nellis, Michael Martina and David Shepardson; Editing by Richard Chang)

Drought-hit Taiwan plans more water curbs for chip hubs

TAIPEI (Reuters) -Taiwan will tighten curbs on the use of water from June 1 in the major chip making hubs of Hsinchu and Taichung as it battles an island wide drought, if there is no significant rainfall by then, the government said on Wednesday.

Describing the drought as the worst in the island’s history, the economy ministry said in the absence of rain it would raise the drought alert level to its highest, requiring companies in the two science parks to cut water consumption by 17%.

“We need to further tighten water use restrictions in response, in advance of a scenario when rainfall from the plum rain is falling short of expectation,” the ministry said in a statement, referring to the late spring rainy season.

Reservoirs in the island’s central and southern regions were at below 5% of capacity, the ministry said, adding that in its drastic efforts to add supplies it had turned to about 160 wells and seawater desalination plants.

The world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), has factories in both Hsinchu and Taichung.

The chip giant told Reuters it had seen no impact on production and would continue to trim its water use and buy supplies from tanker trucks for some foundries.

Another major chipmaker, United Microelectronics Corp, said it had adopted numerous water-saving measures.

“There is no impact to production,” it added.

No typhoons directly hit the island last year, meaning much less rain. This year rainfall has also been low and the outlook is not good.

Technology companies have long complained about tight water supplies, which became more acute after factories expanded production following a Sino-U.S. trade war.

The drought has also exacerbated problems with electricity management, leading to two major island-wide blackouts in less than a week.

President Tsai Ing-wen pledged this week to look into electricity management, saying the booming economy and extreme weather posed a “great challenge”.

The drought means electricity generated by hydropower plants was insufficient, state-run electricity provider Taipower said.

(Reporting by Yimou Lee and Ben Blanchard; Editing by Robert Birseland Clarence Fernandez)

More forced power outages in Taiwan as demand spikes amid heatwave, drought

TAIPEI (Reuters) -Taiwan imposed power cuts on Monday evening following a spike in demand amid a heatwave and drought and failure at a power plant, in the second such outage in a week, although far fewer homes were affected.

Power was restored by 1340 GMT, electricity provider Taipower said.

Taiwan, which major chip makers such as Taiwan Semiconductor Manufacturing Co Ltd (TSMC) call home, already imposed phased blackouts on Thursday following an outage at a plant in the southern city of Kaohsiung.

TSMC, which has factories across the island, said it had seen “no impact so far” from Monday’s power cuts.

Taipower said 660,000 homes were affected by the power cuts, fewer than the roughly 4 million affected last week.

Taipower blamed a rise in demand coincided with the suspension of some generators due to a technical failure at the southern Hsinta Power Plant, the same facility that caused the problem last week.

The state-own company said that the worst drought to hit the island in more than half a century meant electricity generated by hydropower plants was insufficient to meet the unexpected demand on Monday evening, a record high for May.

By 8:40 p.m., only 40% of the supply had been restored in the coal- and gas-fired power plant, Taipower said.

Taiwan’s cabinet offered an apology and urged citizens to stay safe.

Taiwan’s main opposition party, the Kuomintang, said the outages showed the government’s power policy was inadequate and called for Economy Minister Wang Mei-hua to step down.

Taiwan is currently experiencing an unusually hot May with temperatures in parts of the island peaking at around 40 degrees Celsius (104 Fahrenheit).

(Reporting by Yimou Lee and Ben Blanchard; Editing by Gareth Jones, Louise Heavens, Nick Macfie and Raissa Kasolowsky)

U.S. Senate moves ahead with sweeping effort to counter China

By Patricia Zengerle and David Brunnstrom

WASHINGTON (Reuters) -The U.S. Senate Foreign Relations Committee has scheduled a meeting on April 14 to consider major bipartisan legislation to boost the country’s ability to push back against China’s expanding global influence, Senate sources said on Thursday.

The draft measure, seen by Reuters and titled the Strategic Competition Act of 2021, mandates a range of diplomatic and strategic initiatives to counteract Beijing, reflecting hardline sentiment on dealings with China from both Democrats and Republicans in Congress.

The bill is intended to address economic competition with China, but also humanitarian and democratic values, such as the treatment of the minority Muslim Uighurs, suppression of dissent in Hong Kong and aggression in the South China Sea.

It stressed the need to “prioritize the military investments necessary to achieve United States political objectives in the Indo-Pacific.” It called for spending to do so, saying Congress must ensure the federal budget is “properly aligned” with the strategic imperative to compete with China.

It calls for an enhanced partnership with Taiwan, calling the democratic self-governed island “a vital part of the United States Indo-Pacific strategy” and saying there should be no restrictions on the ability of U.S. officials to interact with Taiwanese counterparts. China considers Taiwan to be a breakaway province.

The bill also says Washington must encourage allies to do more to check Beijing’s “aggressive and assertive behavior.” And it calls on every federal department and agency to designate a senior official to coordinate policies with respect to strategic competition with China.

“The United States must ensure that all Federal departments and agencies are organized to reflect the fact that strategic competition with the PRC is the United States top foreign policy priority,” the draft said, using the acronym for the People’s Republic of China.

Another clause would limit assistance to countries hosting Chinese military installations, saying Beijing uses its so-called Belt and Road Initiative to advance its security interests and facilitate greater military access.

Introduced by Senators Bob Menendez, the committee’s Democratic chairman, and Jim Risch, its ranking Republican, the draft bill is 283 pages long. It was released to committee members overnight to allow a markup, a meeting during which the panel will discuss amendments and vote, in a week.

The measure is the Foreign Relations panel’s contribution to a fast-track effort in the Senate announced in February by Democratic Senate Majority Leader Chuck Schumer to write legislation to counter China.

The effort is supported by Democratic President Joe Biden’s administration.

The Senate Commerce Committee announced on Wednesday that it would hold a hearing on April 14 on its bipartisan measure to bolster U.S. technology. That bill, titled the Endless Frontier Act, was first proposed in 2020 and calls for $110 billion over five years to advance U.S. technology efforts.

Separately on Thursday, the U.S. Commerce Department said it was adding seven Chinese supercomputing entities to an economic blacklist for assisting China’s military.

(Reporting by David Brunnstrom and Patricia Zengerle; Editing by Toby Chopra and Jonathan Oatis)

China sends more jets; Taiwan says it will fight to the end if there’s war

By Ben Blanchard and Yimou Lee

TAIPEI (Reuters) – China sent more fighter jets into Taiwan’s air defense zone on Wednesday in a stepped up show of force around the island Beijing claims as its own, and Taiwan’s foreign minister said it would fight to the end if China attacks.

The democratic self-governed island has complained of repeated military activities by Beijing in recent months, with China’s air force making almost daily forays in Taiwan’s air defense identification zone. On Monday, China said an aircraft carrier group was exercising close to the island.

Taiwan’s Defense Ministry said 15 Chinese aircraft including 12 fighters entered its air defense identification zone, with an anti-submarine aircraft flying to the south through the Bashi Channel between Taiwan and the Philippines.

Taiwan’s air force sent up aircraft to intercept and warn the Chinese away, the ministry added.

Speaking earlier in the day, Taiwan Foreign Minister Joseph Wu said the United States was concerned about the risk of conflict.

“From my limited understanding of American decision makers watching developments in this region, they clearly see the danger of the possibility of China launching an attack against Taiwan,” he told reporters at his ministry.

“We are willing to defend ourselves without any questions and we will fight the war if we need to fight the war. And if we need to defend ourselves to the very last day we will defend ourselves to the very last day.”

China’s Taiwan Affairs Office and the U.S. State Department did not respond to requests for comment on Wu’s remarks. China has said its activities around Taiwan are aimed at protecting China’s sovereignty. The United States has expressed concern about China’s movements, and said its commitment to Taiwan is “rock solid”.

Adding to the stepped up military action near Taiwan, the U.S. Navy said the guided missile destroyer USS John S. McCain conducted a “routine” transit of the Taiwan Strait on Wednesday.

‘PORCUPINE’ TAIWAN

Neither Taiwan nor China has said precisely where the Chinese carrier group is, or whether it is heading towards the disputed South China Sea, where a U.S. carrier group is currently operating.

Speaking in parliament, Taiwan’s Deputy Defense Minister Chang Che-ping said the Chinese carrier’s movements were being closely followed, and described its drills as routine.

A person familiar with Taiwan’s security planning told Reuters the carrier group is still “near the Japanese islands,” though declined to disclose the exact location.

Japan had said on Sunday that the Chinese carrier group had entered the Pacific after sailing through the Miyako Strait, through Japan’s southern Ryukyu island chain northeast of Taiwan.

Washington, Taiwan’s most important international backer and arms supplier, has been pushing Taipei to modernize its military so it can become a “porcupine,” hard for China to attack.

Wu said Taiwan was determined to improve its military capabilities and spend more on defense.

“The defense of Taiwan is our responsibility. We will try every way we can to improve our defense capability.”

Taiwan’s Defense Ministry said it will run eight days of computer-aided war games this month, simulating a Chinese attack. A second phase of exercises, including live-fire drills and anti-landing drills, will take place in July, when hospitals would also practice handling mass casualties.

“The drills are designed based on the toughest enemy threats, simulating all possible scenarios on an enemy invasion on Taiwan,” Major General Liu Yu-Ping told reporters.

Asked if Washington’s de facto embassy, the American Institute in Taiwan, would send representatives to the drills, Liu said such a plan was “discussed” but “will not be implemented,” citing military sensitivity.

(Reporting By Ben Blanchard and Yimou Lee; Additional reporting by Roger Tung; Editing by Simon Cameron-Moore and Peter Graff)

Train crash kills 50 in Taiwan’s deadliest rail tragedy in decades

By Ann Wang

HUALIEN, Taiwan (Reuters) – A Taiwan express train with almost 500 aboard derailed in a tunnel on Friday after hitting a truck that had slid down a bank onto the track, killing at least 50 passengers and injuring 146 in the island’s worst rail disaster in seven decades.

Images from the scene showed some carriages ripped apart by the impact, with others crumpled, hindering rescuers in their efforts to reach passengers.

By mid-afternoon no one was still trapped, though the fire department said it had found body parts, meaning the number of those killed, who included the driver, was likely to rise.

“People just fell all over each other, on top of one another,” a woman who survived the crash told domestic television. “It was terrifying. There were whole families there.”

Taiwan’s government said there were 496 people on the train, including 120 without seats. Many were tourists and people heading home at the start of a traditional long weekend holiday to tend to family graves. One French citizen was amongst the dead, officials said.

The train was travelling from Taipei, the capital, to the southeastern city of Taitung.

It came off the rails north of the eastern city of Hualien after hitting a truck that had slid off a road from a nearby construction site, Feng Hui-sheng, the Taiwan Railways Administration’s deputy director, told reporters.

Feng said the manager of the site, which was stabilizing the mountainside to prevent landslides, visited around 9 a.m. (0100 GMT) and stopped his truck in front of the site office.

“At present it is suspected because the vehicle wasn’t braked properly, it slid for around 20 meters along the site access road and entered the eastern trunk line,” he added.

The official Central News Agency said police had taken in the manager for questioning.

The fire department showed a picture of what appeared to be wreckage of the truck beside the derailed train, with an aerial image of one end of the train still on the track next to the construction site.

‘EVERYTHING SHOOK’

Survivors described their terror as the train slammed into the truck and ground to a halt.

“It suddenly came to a stop and then everything shook,” one told local television. “It was all so chaotic.”

Passengers in some carriages still in the tunnel had to be led to safety, the railway administration said.

Images showed an injured passenger carried away on a stretcher, with her head and neck in a brace, while others gathered suitcases and bags in a tilted, derailed carriage as some walked on the train’s roof to exit the tunnel.

The accident occurred at the beginning of a long weekend for the traditional Tomb Sweeping Day holiday.

Taiwan’s mountainous east coast is a tourist destination. The railway that snakes down from Taipei hugs the coast and is known for its tunnels, in one of which the crash took place. The link to Taipei opened in 1979.

Taiwan’s state-owned railways are generally reliable and efficient, but have had a patchy safety record over the years.

The last major crash was in 2018, when 18 people died and 175 were injured when a train derailed in the island’s northeast.

In 1948, 64 people are estimated to have died when a train burst into flames in northern Taiwan.

(Reporting by Ann Wang; Writing by Ben Blanchard; Editing by Clarence Fernandez, William Maclean and John Stonestreet)

China’s latest weapon against Taiwan: the sand dredger

By Yimou Lee

ON BOARD THE TAIWAN COAST GUARD SHIP PP-10062, East China Sea (Reuters) – Taiwanese coast guard commander Lin Chie-ming is on the frontline of a new type of warfare that China is waging against Taiwan. China’s weapon? Sand.

On a chilly morning in late January, Lin, clad in an orange uniform, stood on the rolling deck of his boat as it patrolled in choppy waters off the Taiwan-run Matsu Islands. A few kilometers away, the Chinese coast was faintly visible from Lin’s boat. He was on the lookout for Chinese sand-dredging ships encroaching on waters controlled by Taiwan.

The Chinese goal, Taiwanese officials say: pressure Taiwan by tying down the island democracy’s naval defenses and undermining the livelihoods of Matsu residents.

Half an hour into the patrol, Lin’s nine-man crew spotted two 3,000-ton dredgers, dwarfing their 100-ton vessel. Parked just outside Taiwan’s waters, neither of the dredgers clearly displayed their names, making it difficult for a crew member to identify them as he peered through binoculars.

Upon spotting Lin’s boat, armed with two water cannons and a machine gun, the dredgers quickly pulled up anchor and headed back toward the Chinese coast.

“They think this area is part of China’s territory,” said Lin, referring to Chinese dredgers that have been intruding into Matsu’s waters. “They usually leave after we drive them away, but they come back again after we go away.”

The sand-dredging is one weapon China is using against Taiwan in a campaign of so-called gray-zone warfare, which entails using irregular tactics to exhaust a foe without actually resorting to open combat. Since June last year, Chinese dredgers have been swarming around the Matsu Islands, dropping anchor and scooping up vast amounts of sand from the ocean bed for construction projects in China.

The ploy is taxing for Taiwan’s civilian-run Coast Guard Administration, which is now conducting round-the-clock patrols in an effort to repel the Chinese vessels. Taiwanese officials and Matsu residents say the dredging forays have had other corrosive impacts – disrupting the local economy, damaging undersea communication cables and intimidating residents and tourists to the islands. Local officials also fear that the dredging is destroying marine life nearby.

Besides Matsu, where 13,300 people live, the coast guard says China has also been dredging in the shallow waters near the median line of the Taiwan Strait, which has long served as an unofficial buffer separating China and Taiwan.

Last year, Taiwan expelled nearly 4,000 Chinese sand-dredgers and sand-transporting vessels from waters under its control, most of them in the area close to the median line, according to Taiwan’s coast guard. That’s a 560% jump over the 600 Chinese vessels that were repelled in all of 2019.

In Matsu, there were also many Chinese vessels that sailed close to Taiwanese waters without actually entering, forcing the coast guard to be on constant alert.

The dredging is a “gray-zone strategy with Chinese characteristics,” said Su Tzu-yun, an associate research fellow at Taiwan’s top military think tank, the Institute for National Defense and Security Research. “You dredge for sand on the one hand, but if you can also put pressure on Taiwan, then that’s great, too.”

‘PSYCHOLOGICAL WARFARE’

Sand is just part of the gray-zone campaign. China, which claims democratically-governed Taiwan as its own territory, has been using other irregular tactics to wear down the island of 23 million. The most dramatic: In recent months, the People’s Liberation Army, China’s military, has been dispatching warplanes in menacing forays toward the island. Taiwan has been scrambling military aircraft on an almost daily basis to head off the threat, placing an onerous burden on its air force.

Taiwanese military officials and Western analysts say China’s gray-zone tactics are meant to drain the resources and erode the will of the island’s armed forces – and make such harassment so routine that the world grows inured to it. China’s sand dredging, said one Taiwanese security official investigating the matter, is “part of their psychological warfare against Taiwan, similar to what they are doing in Taiwan’s southwestern airspace,” where the Chinese jets are intruding.

China’s Taiwan Affairs Office said in a statement to Reuters that Taiwan’s claims that Beijing is allowing sand-dredging boats to engage in “illegal operations” near Matsu and the median line are baseless. The office did say it has taken steps to stop illegal sand-dredging, without elaborating.

The office also said Taiwan is “an inseparable part of China.” Taiwanese authorities, it alleged, are using their claims of control over the waters near the islands to “detain mainland boats and even resorting to dangerous and violent means in their treatment of mainland crews.”

Asked about China’s gray-zone actions, Taiwan’s Mainland Affairs Council, which oversees policy toward China, said the Chinese Communist Party was engaging in “harassment” with the aim of putting pressure on Taiwan. The council said the government had recently increased penalties for illegal dredging in its waters.

Taiwan’s Ministry of National Defense did not respond to questions.

Chinese President Xi Jinping has not ruled out the use of force to subdue Taiwan. If he succeeds – by gray-zone tactics or outright war – it would dramatically undermine America’s decades of strategic dominance in the Asia-Pacific region and propel China toward preeminence in the area.

The Matsu Islands are almost an hour by plane from Taipei. They are one of a handful of island groups close to China’s coast that Taiwan has governed since 1949, when the defeated Republic of China government, under Chiang Kai-shek, fled to Taiwan after losing the Chinese civil war. The Matsu, Kinmen and Pratas island groups lie several hundred kilometers from mainland Taiwan. Their isolation, and their much-reduced Taiwanese military presence since the end of the Cold War, would make them highly vulnerable to a Chinese attack.

Matsu is just nine kilometers from the Chinese coastline at the closest point. The island has a total of just nine coast guard ships, ranging from 10 to 100 tons. On some days, government officials said, the coast guard has faced hundreds of Chinese vessels, ranging in size from 1,000 to 3,000 tons, in and around the island’s waters. Taiwan says those waters extend six kilometers out from the coastline here. China doesn’t officially recognize any claims of sovereignty by Taiwan.

At one point last year, more than 200 Chinese sand-dredging and transport boats were spotted operating south of Nangan, the main Matsu islet, three Taiwanese officials told Reuters. Lin, the coast guard commander, recalls a similar scene playing out on the morning of Oct. 25, when he and his colleagues encountered an armada of roughly 100 Chinese boats. That day, he said, his team expelled seven Chinese vessels that breached Matsu waters.

“People were frightened by the scene,” he said, referring to local residents. “They were speculating about the purpose of the mainland boats and whether they would pose a security threat to the Matsu region.”

NEW BOATS

In some stand-offs, Taiwan’s coast guard has sprayed high-power water cannons at the Chinese ships in an attempt to drive them away. Last year, Taiwan impounded four Chinese vessels and detained 37 crew members, according to the coast guard. Ten of those arrested were given sentences of six to seven months in prison. The others are still on trial, the coast guard said.

Taiwan is in the process of beefing up its coast guard, partly in response to the dredging threat. Last year, President Tsai Ing-wen commissioned into service the first of a new class of coast guard vessel, based on the design of an “aircraft-carrier killer,” a missile boat for the navy.

More than 100 new coast guard boats will be built in the next decade, Tsai said in December, vowing to enforce a crackdown with “no mercy” on Chinese dredging in Taiwan waters. In the meantime, larger patrol boats were sent to temporarily reinforce the coast guard in Matsu, whose 117 members are now conducting 24-hour patrols.

The number of sand dredgers off the coast of Matsu dropped significantly at the end of last year, as winter weather brought rougher seas that make dredging difficult. When the seasons change and the seas are calmer, local residents fear that dredgers will be back.

From the late 1950s through to the late 1970s, Chinese forces occasionally bombarded the Matsu Islands with artillery shells. Remnants of that era are still visible across the island group, from old air-raid tunnels to anti-Communist slogans displayed on the rugged cliffs of Nangan island.

Today, Matsu is a popular tourist destination. Its picturesque old-stone homes have been turned into fashionable guest houses.

But locals say China’s dredging tactics are hurting their livelihoods. Chen Kuo-chiang, who runs a seafood restaurant on Nangan, says the dredging has led to a drastic decline in the number of fish he catches off the island. Three years ago, he was hooking a dozen a day with his rod, said Chen, 39, as he stood fishing on some rocks in a Nangan port. Now, he said, he struggles to catch one or two.

The fears of a Chinese invasion are palpable on Nangan. Chen thinks the sand dredging might be a precursor to an attack by Chinese forces. “We don’t want to be ruled by mainland China,” he said. “We have freedom, which is limited over there.”

Tsai Chia-chen, who works at an ocean-front bed and breakfast, said concern was particularly high ahead of the U.S. presidential election in early November. At the time, said Tsai, rumors circulated that China might seize the window of opportunity with the United States distracted by the election to launch an attack on Taiwan. The large number of Chinese dredgers around the islands in late October added to the anxiety, she recalled.

“Our guests were obviously worried,” she said. “There was only one small Taiwan coast guard boat, surrounded by many huge dredgers.”

DAMAGED CABLES

On five occasions last year, the dredgers damaged undersea communication cables between Nangan and Juguang, another isle in the Matsu group, the three Taiwanese officials told Reuters. Mobile phone and internet services for the islanders were disrupted, they said. There were no such incidents in 2019.

State-backed Chunghwa Telecom said it spent T$60 million (about $2 million) to fix the cables last year. It also hired a local fishing boat to conduct daily patrols to ensure the safety of the cables.

The coast guard said most of the fully loaded Chinese vessels around Matsu have been seen heading with their sand in a northerly direction, towards the city of Wenzhou, where the local Chinese government has been touting a massive land reclamation project.

Known as the Ou Fei project, the area has been reclaimed for a new economic zone. It encompasses about 66 square kilometers – more than double the area of all the Matsu Islands. On its website, the Wenzhou local government describes the project as a “major strategic development for the future” of the city.

The Wenzhou city government didn’t respond to a request for comment.

Following contact on the local level between the two sides, China detained several dredging boats last month, according to Taiwan’s coast guard. But a Taiwan-initiated meeting with authorities in the port city of Fuzhou to discuss the dredging was “postponed indefinitely” and without explanation in late December, said Wang Chien-hua, who oversees economic development in the local government that administers Matsu.

Taiwan had been planning to use the online meeting to urge Chinese authorities to enforce mandatory registration for dredgers and punish those who go out to sea without reporting to the authorities, according to an internal government note reviewed by Reuters.

The Taiwan Affairs Office in Beijing said the local authorities on both sides maintained “necessary communication and collaboration” to ensure order on the seas.

Aboard his patrol vessel, Taiwanese commander Lin sounded defiant. The coast guard, he said, “will use force to drive away” Chinese ships that enter Taiwan’s waters.

“That way we can reassure the people in Matsu. At the moment, we are capable of doing this job.”

(Reporting by Yimou Lee. Additional reporting by Ben Blanchard in Taipei. Edited by Peter Hirschberg.)

GM hit by chip shortage, to cut production at four plants

By Ben Klayman

DETROIT (Reuters) – General Motors Co became the latest automaker hit by the global shortage of semiconductor chips as the U.S. automaker said on Wednesday it will take down production next week at four assembly plants.

GM said it will cut production entirely during the week of Feb. 8 at plants in Fairfax, Kansas; Ingersoll, Ontario; and San Luis Potosi, Mexico. It will also run its Bupyeong 2 plant in South Korea at half capacity that week.

GM did not disclose how much volume it would lose or which supplier was affected by the chip shortage, but said the focus has been on keeping production running at plants building the highest-profit vehicles – full-size pickup trucks and SUVs as well as the Chevrolet Corvette sports car. GM said it intends to make up as much lost production as possible.

AutoForecast Solutions, which tracks production, estimated GM’s combined lost volume would total almost 10,000 vehicles next week.

“Despite our mitigation efforts, the semiconductor shortage will impact GM production in 2021,” GM spokesman David Barnas told Reuters in a statement.

“Semiconductor supply for the global auto industry remains very fluid,” he added. “Our supply chain organization is working closely with our supply base to find solutions for our suppliers’ semiconductor requirements and to mitigate impacts on GM.”

Affected GM vehicles include the Chevrolet Malibu sedan, Cadillac XT4 SUV, Chevy Equinox and Trax, and GMC Terrain SUVs and the Buick Encore small crossover vehicle.

The chip shortage has led several automakers, including Volkswagen AG, Ford Motor Co, Subaru Corp, Toyota Motor Corp, Nissan Motor Co and Stellantis NV, to cut vehicle production.

Mazda Motor Corp is considering cutting its global output by a total of 34,000 vehicles in February and March due to the shortage, sources told Reuters on Wednesday. Nissan said on Tuesday it cut three days of production on the truck line at its Canton, Mississippi, plant.

The chip shortage is expected to cause production in the global auto sector to be 672,000 vehicles lower than anticipated in the first quarter, IHS Markit said on Wednesday. The forecasting firm expects the shortage to last into the third quarter.

AutoForecast Solutions announced lost production globally so far due to the shortage has totaled 564,000 vehicles and estimated the total impact this year could be 964,000 vehicles.

Taiwan, home to the world’s largest contract chip maker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC) and other major tech firms, is at the center of efforts to resolve the shortage.

Taiwanese chipmakers have promised to increase production and the government has urged them to address the problem.

Taiwan economic officials will hold a virtual meeting with the United States at the end of this week to discuss supply chains, with semiconductor firms present.

On Tuesday, 15 U.S. senators, including some from key automotive states like Michigan, Ohio, Tennessee, Illinois, Indiana and South Carolina, urged the White House to work with Congress to address the chip shortage.

(Reporting by Ben Klayman in Detroit; Editing by Matthew Lewis)