Chris Miller, author of Chip War and professor of international history at Tufts University's Fletcher School, has a pointed warning for policymakers on both sides of the Pacific: Beijing's drive to dominate advanced industries through state subsidies is not a sign of strength—it is a structural trap that is quietly hollowing out China's domestic economy, even as Chinese exports surge.
Miller spoke with Storm Media in an exclusive interview on June 5, ahead of the 2026 Supply Chain Resilience International Summit, hosted in Taipei on June 6 by the Science, Technology, and Society Research Center (DSET), the think tank affiliated with Taiwan's National Science and Technology Council.
Beijing's Subsidy Machine Is Winning Markets Abroad—and Losing at Home
Miller's central argument is that China faces a deepening economic contradiction. As Beijing pours ever-greater fiscal resources into strategic industries—semiconductors, batteries, and solar power among them—it is simultaneously withdrawing financial support from households and the consumer economy.
The visible consequences are already emerging: sluggish wage growth, elevated youth unemployment, and a domestic demand shortfall that no amount of export success can paper over.
"China will continue over the coming years to use state subsidies and other fiscal tools to support advanced domestic technology industries," Miller said. "That will only intensify industrial friction with its major trading partners"—including Taiwan.
The scale of that intervention is striking. A major report released earlier this month by the Organisation for Economic Co-operation and Development examined government subsidies received by 525 large companies across 15 key industries worldwide between 2005 and 2024.
It found that in 2024 those companies collectively received $108 billion in state support—equivalent to 1.3% of their combined revenues, the second-highest level recorded since the 2009 global financial crisis. Chinese firms, the OECD found, received on average three to eight times more in state subsidies than companies in other countries.
Over that same 20-year period, state subsidies accounted for roughly 22% of the market share gains made by the global sample of firms. For Chinese companies, that figure reached 60%.
China's semiconductor sector stands out most sharply. While government subsidies account for roughly 2% of revenues across the global chip industry, the comparable figure for China's semiconductor sector reaches 10%.
Chinese state investment vehicles—including the so-called "Big Fund III," formally the National Integrated Circuit Industry Investment Fund III—have collectively committed $47.5 billion to building domestic capabilities in advanced logic and memory chips.
That investment has driven a significant expansion in production capacity. Combined with strong domestic demand, China's integrated circuit exports surged 83.7% year-on-year in the first four months of 2026, reaching $103.5 billion.
The Soviet Parallel—and Why Miller Isn't Predicting Collapse
Miller, whose academic background is in Russian history, reached for a striking historical parallel when asked about the long-term trajectory. The closest analogy to China's current growth dilemma, he said, is the Soviet Union—a case where decades of deepening economic dysfunction ultimately produced political and social crisis.
He was careful not to overstate the comparison. China is not the Soviet Union, and there is no near-term collapse on the horizon.
But the economic patterns now visible in China—an industrial base sustained by state direction while the broader population sees diminishing returns—bear a resemblance to conditions in the late Soviet period. What concerns him further is that certain Beijing policy choices appear to be compounding, rather than correcting, those underlying weaknesses.
Three Things Taiwan Can Do
On Taiwan's options, Miller was direct: neither Taipei, Washington, nor any other capital is well-positioned to change how Beijing manages its economy. But that does not mean Taiwan is without agency.
He outlined three priorities.
Protect domestic industries from unfair competition. The spillover effects of China's export surge are not abstract—"this affects many industries in Taiwan's economy, the U.S. economy, and Japan's economy," Miller said. Taiwan needs targeted defenses against below-cost competition enabled by state support.
Sustain rapid technological innovation. Maintaining a meaningful lead over China in advanced technology is not simply a commercial advantage; it is a strategic buffer. The moment that gap narrows significantly, Taiwan's leverage diminishes across multiple dimensions.
Invest in credible defense. This is where Miller's warning carries the most urgency. "One concern I have," he said, "is that as China's leadership becomes more repressive, and as accurate information reaching the top of Beijing becomes increasingly scarce, political decision-making in Beijing may become less and less predictable. So Taiwan needs to deter any potential recklessness from Beijing."
The three measures, taken together, reflect Miller's broader view that Taiwan cannot count on China's economic difficulties to translate automatically into restraint. If anything, the opacity and ideological rigidity of China's current leadership make miscalculation more likely over time—which is precisely why preparation matters now.
