Biden pokes the dragon: President will warn China to stop aggressive tactics in the South China Sea and announces $6.6 billion CHIP investment for Taiwan days after he called Xi

President Joe Biden is doubling down on China, warning it to stop its aggressive tactics in the South China Sea while offering Taiwan a $6.6 billion investment to help it build microchips.

Biden will discuss Beijing's activity toward its neighbors in Asia during summits this week with Japanese Prime Minister Fumio Kishida and Philippine President Ferdinand Marcos Jr. He spoke with Chinese President Xi Jinping last week.

Additionally, his administration is investing in Taiwan Semiconductor Manufacturing Company, so it can expand existing plans for two factories in Phoenix and add a third, newly announced production hub in Arizona.

His moves come as Treasury Secretary Janet Yellin is talking economics in visits to Guangzhou and Beijing where she's also sampling Sichuan dumplings, Peking duck and the local beer.

President Joe Biden is meeting with Japanese and Philippine leaders this week to discuss countering Chinese agressiong in the South China Sea, Biden and Chinese President Xi Jinping (right) spoke on the phone last week

Biden will host the first-ever summit of the U.S., Japanese and Philippine leaders this week along with a state dinner for the Japanese prime minister as he seeks to counter China's growing influence in the Indo-Pacific.

Defense issues will top the agenda as both Japan and the Philippines worry about Beijing's moves toward territory they claim. China claims the South China Sea almost in its entirety.

Kishida will discuss how Chinese coast guard ships regularly approach disputed Japanese-controlled East China Sea islands near Taiwan. 

And Marcos Jr. is worried about the Second Thomas Shoal, a submerged reef that is contested in the Spratly Islands. 

The Chinese coastguard has used water cannons to prevent the Philippines from resupplying marines stationed on the Sierra Madre, a rusting ship that Manila intentionally grounded on the reef in 1999 to reinforce its claims in the region.

Japan has sold coastal radars to the Philippines and is negotiating a defense agreement that would allow their troops to visit each other's territory for joint military exercises.

Meanwhile, Biden is using his CHIPS and Science Act to revive U.S. semiconductor manufacturing after the covid pandemic resulted in a shortage of microchips, which are used in many household items

The Biden administration has promised tens of billions of dollars to support construction of U.S. chip foundries and reduce reliance on Asian suppliers, which Washington sees as a security weakness.

'Semiconductors - those tiny chips smaller than the tip of your finger - power everything from smartphones to cars to satellites and weapons systems,' Biden said in a statement. 

'TSMC´s renewed commitment to the United States, and its investment in Arizona represent a broader story for semiconductor manufacturing that´s made in America and with the strong support of America´s leading technology firms to build the products we rely on every day.'

U.S. Treasury Secretary Janet Yellen, right, and U.S. Ambassador to China Nicholas Burns sample beer at the Jing-A brewery in Beijing

Chinese Coast Guard vessels fire water cannons towards a Philippine resupply vessel Unaizah May 4 on its way to a resupply mission at Second Thomas Shoal in the South China Sea

Taiwan Semiconductor Manufacturing produces nearly all of the leading-edge microchips in the world and plans to eventually do so in the U.S.

It began construction of its first facility in Phoenix in 2021, and started work on a second hub last year, with the company increasing its total investment in both projects to $40 billion. 

The third facility should be producing microchips by the end of the decade and will see the company´s commitment increase to a total of $65 billion, Commerce Secretary Gina Raimondo said in announcing the latest tranche of money.

The investments would put the U.S. on track to produce roughly 20% of the world´s leading-edge chips by 2030, and Raimondo said they should help create 6,000 manufacturing jobs and 20,000 construction jobs, as well as thousands of new positions more indirectly tied to assorted suppliers in chip-related industries tied to Arizona projects.

The potential incentives announced Monday include $50 million to help train the workforce in Arizona to be better equipped to work in the new facilities. Additionally, approximately $5 billion of proposed loans would be available through the CHIPS and Science Act.

The announcement came Yellin is in China.

Senior administration officials were asked if the Biden administration gave China a head´s up on the coming investment, given the delicate geopolitics surrounding Taiwan. The officials said only that their focus in making Monday´s announcement was solely on advancing U.S. manufacturing.

Japan's Prime Minister Fumio Kishida, center, waves, with his wife Yuko, left, as they depart for the U.S., at Haneda airport in Tokyo  on Monday

U.S. Treasury Secretary Janet Yellen visits the Guozijian Hutong Alley in Beijing

Yellin was in China to discuss what she calls Chinese overproduction of solar products, electric vehicles and lithium-ion batteries that she warns threaten global economic stability if left unchecked.

A well-known foodie, many of her meetings were over meals. 

On Monday evening, her last night in China, Yellen visited Jing-A Brewing Co. in Beijing - co-founded by an American - where she ordered a Flying Fist IPA, a beer made with American hops.

She took a sip and pronounced it 'excellent.'