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1. The Digital Silk Road and China’s Influence on Standard Setting

Author:
Alex He
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
China is striving to become a leader in international standard setting, and the Digital Silk Road, part of China’s Belt and Road Initiative to expand its global infrastructure and markets, is key to realizing this goal. Both roads depend on standard connectivity, fuelled by Chinese private companies that are the driving force behind China’s growing role as a leader in technology development and shaping standards in both domestic and global markets. However, China faces strong competition to gain more influence in international standard-setting bodies, which are dominated by the European Union and the United States.
Topic:
Infrastructure, Digital Economy, Trade, Digital Culture, Silk Road, and Digitalization
Political Geography:
China, Europe, Asia, North America, and United States of America

2. China’s Experience in Building a Venture Capital Sector: Four Lessons for Policy Makers

Author:
Anton Malkin
Publication Date:
01-2021
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
China’s journey from being a technological backwater to a technological superpower was fuelled, in part, by the success of its venture capital (VC) sector in supporting start-ups. Its VC market is now the second largest in the world after that of the United States. As of 2019, China produced more “unicorns” (privately held, rapidly growing, early-stage technology companies valued at US$1 billion or more) than the United States. Policy makers can learn the following lessons from China’s growing VC sector: China’s use of labour market incentives promotes reverse migration of highly educated expatriates; weak intellectual property protection is not necessarily a deterrent to VC funding, especially in developing countries; government finance, when used appropriately, can help direct VC toward promising technology firms; and an emerging market does not need to wait until it becomes financially developed in order to create funding channels to support start-ups and entrepreneurship.
Topic:
Science and Technology, Hegemony, Finance, and Venture Capital
Political Geography:
China and Asia

3. Biotechnology and Security Threats: National Responses and Prospects for International Cooperation

Author:
Hanzhi Yu and Yang Xue
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Cutting-edge biotechnology, mainly consisting of gene editing, gene drives and gene synthesis, is developing and changing rapidly. It acts as a double-edged sword, bringing benefits to human development in many fields, such as medical treatment and agriculture, while also posing serious threats to biological security, human existence and development. For example, the case of He Jiankui, a young scholar from the Southern University of Science and Technology of China who created gene-edited babies, triggered a global controversy and debate on biosafety in the winter of 2018. This paper argues that the problems China faces do not only exist in China — they are in fact common problems faced by all countries in the world. Due to the COVID-19 pandemic, the world is paying close attention to global health governance and biosafety issues. There is a window of opportunity for global collaboration to deal with biosecurity threats.
Topic:
Security, International Cooperation, Science and Technology, and Biotechnology
Political Geography:
China and Asia

4. China’s Techno-Industrial Development: A Case Study of the Semiconductor Industry

Author:
Alex He
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper reviews the strategies and plans, policy-making institutions, process and problems in China’s techno-industrial development. Although it has made noticeable progress in some areas in the past two decades, China still lags behind in most core technology and advanced manufacturing fields, such as high-end chips. There have been several real breakthroughs in the semiconductor sector by private companies such as HiSilicon and rapid advancement in frontier technologies — artificial intelligence, fifth-generation wireless communication network technology, big data, blockchain and the Internet of Things — by private companies such as Huawei, Tencent, Alibaba and Baidu; however, state-sponsored technological innovation and breakthroughs have been crippled by the existing problems in China’s science and technology research system and a campaign-style catch-up strategy that rewards bureaucrats on short-term goals, as well as by weak links between academic research and industry and a swing between the market-oriented approach for technology acquisitions and indigenous innovation for technology breakthroughs. A case study of China’s semiconductor industry demonstrates both the problems and progress in China’s techno-industrial development, as well as the implications for the country's prospects of evolving into a technological powerhouse.
Topic:
Development, Science and Technology, Artificial Intelligence, Industry, and 5G
Political Geography:
China and Asia

5. Supply Chain Regulation in the Service of Geopolitics: What’s Happening in Semiconductors?

Author:
Dieter Ernst
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Supply chain regulation can be a formidable tool to protect a country’s resilience against unexpected disruptions of trade, investment and the supply of skilled labour. Its utility, however, may erode when geopolitics rather than economics becomes the primary objective. This paper examines the implementation problems and the unintended consequences of a new supply chain doctrine in the service of geopolitics, with a focus on US President Joe Biden’s Executive Order on America’s Supply Chains to protect US technological leadership and national security against China. With semiconductors as a primary target, America’s supply chain controls are designed to exploit China’s most glaring weaknesses as supply chain chokepoints that the US Commerce Department can block, thus impeding timely and cost-effective access to essential products, services and technologies. The paper also highlights a second defining characteristic of America’s supply chain doctrine — regulatory supply chain controls are combined with a big push in domestic semiconductor manufacturing. Three propositions are presented as guideposts for further research. The paper concludes with a brief discussion of the implications for future US supply chain control against China: Will the quest for improved supply chain resilience succeed in mobilizing enough forces to shift the focus of US policy away from supply chain regulation in the service of geopolitics?
Topic:
International Cooperation, Labor Issues, Regulation, Rivalry, and Supply Chains
Political Geography:
China, Asia, North America, and United States of America

6. Competing in Artificial Intelligence Chips: China’s Challenge amid Technology War

Author:
Dieter Ernst
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This special report assesses the challenges that China is facing in developing its artificial intelligence (AI) industry due to unprecedented US technology export restrictions. A central proposition is that China’s achievements in AI lack a robust foundation in leading-edge AI chips, and thus the country is vulnerable to externally imposed supply disruptions. The COVID-19 pandemic has further decoupled China from international trade and technology flows. Success in AI requires mastery of data, algorithms and computing power, which, in turn, is determined by the performance of AI chips. Increasing computing power that is cost-effective and energy-saving is the indispensable third component of this magic AI triangle. Research on China’s AI strategy has emphasized China’s huge data sets as a primary advantage. It was assumed that China could always purchase the necessary AI chips from global semiconductor industry leaders. Until recently, AI applications run by leading-edge major Chinese technology firms were powered by foreign chips, mostly designed by a small group of top US semiconductor firms. The outbreak of the technology war, however, is disrupting China’s access to advanced AI chips from the United States. Drawing on field research conducted in 2019, this report contributes to the literature by addressing China’s arguably most immediate and difficult AI challenges. The report highlights China’s challenge of competing in AI, and contrasts America’s and China’s different AI development trajectories. Capabilities and challenges are assessed, both for the large players (Huawei, Alibaba and Baidu) and for a small group of AI chip “unicorns.” The report concludes with implications for China’s future AI chip development.
Topic:
Energy Policy, Science and Technology, Sanctions, and Artificial Intelligence
Political Geography:
United States, China, Asia, and North America

7. Toward a Robust Architecture for the Regulation of Data and Digital Trade

Author:
Dan Ciuriak and Maria Piashkina
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The rapid digital transformation occurring worldwide poses significant challenges for policy makers working within a governance framework that evolved over centuries. Domestic policy space needs to be redefined for the digital age, and the interface with international trade governance recalibrated. In this paper, Dan Ciuriak and Maria Ptashkina organize the issues facing policy makers under the broad pillars of “economic value capture,” “sovereignty” in public choice and “national security,” and outline a conceptual framework with which policy makers can start to think about a coherent integration of the many reform efforts now under way, considering how policies adopted in these areas can be reconciled with commitments under a multilateral framework adapted for the digital age.
Topic:
International Trade and Finance, Reform, Digital Economy, Multilateralism, and Digitization
Political Geography:
United States, China, Europe, Asia, and North America

8. An International Intellectual Property and Digital Trade Strategy for Canada

Author:
Jeremy de Beer
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
To remain competitive on a global scale, Canada needs to enhance its domestic intellectual property (IP) and digital trade strategies with an international approach that can respond to constantly changing global economic conditions. Although Canada launched its Intellectual Property Strategy in 2018 — focusing on IP awareness, strategic tools and legislation — its data initiative, known as the Digital Charter, remains a work in progress. Both policies would benefit from an outward-looking, interconnected, international strategic vision. As a member of various international trade agreements, Canada has framed its IP laws to align with these agreements and its trade partners. Canada should expand its trade relationships with Africa before other countries, such as China, take advantage of the continent’s rapidly growing economies and trade opportunities. Building strategic alliances with the right global partners, combined with the use of hard and soft laws to promote Canadian interests, will help Canada strengthen its international IP and digital trade strategy.
Topic:
International Cooperation, Intellectual Property/Copyright, Digital Economy, and Trade
Political Geography:
China, Canada, Asia, and North America

9. Chinese Industrial Actors in Global Rule Making: A Preliminary Exploration

Author:
Honzhi Yu and Hongying Wang
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
In contrast to the growing profile of the Chinese government in global governance, the engagement of Chinese industrial actors in global rule making is quite limited and uneven. Some Chinese industrial leaders have shown an ambition to participate in global rule making in their respective realms; most of the others still lack interest or capacity. This policy brief identifies three plausible sources of variation among the Chinese industrial actors. It offers suggestions to Chinese industrial actors and to those concerned about China’s role in global governance, with the purpose of reducing misunderstanding and building trust between Chinese industrial actors and businesses, regulators, non-governmental organizations and stakeholders from other parts of the world in developing global standards for good governance.
Topic:
Development, Industrial Policy, and Governance
Political Geography:
China and Asia

10. Does Canada’s Foreign Trade Policy Give Innovating Canadian Firms a Competitive Edge Internationally?

Author:
Olena Ivus and Marta Paczos
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
In recent years, Canada has adopted the Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada-United States-Mexico Agreement (CUSMA). Like other modern international trade agreements, CETA, the CPTPP and the CUSMA include protections for innovators’ profits and technologies in the form of intellectual property rights (IPRs) regulations. These trade agreements will have a first-order impact on the volume and composition of trade in goods and innovation with sensitive intellectual property (IP) in Canada, as well as having an impact on global welfare distribution. But is Canada’s membership in these agreements good for Canadian firms looking to compete globally? This paper begins with a review of the IP protections instituted through recent trade deals involving Canada. It discusses the nature and scope of Canada’s IP obligations under CETA, the CPTPP and the CUSMA and explains how these obligations fit within the current Canadian legal framework. The changes in the standards of IPRs under these agreements will have a first-order impact on the volume and composition of trade in IP-sensitive goods, innovation and global welfare distribution and so deserve thorough debate. The paper then proceeds with a broader discussion of the reasons to include IP provisions in international trade agreements and the rationale for international coordination of the IPRs policy. Next, the paper discusses how IP provisions in trade agreements limit the freedom to use IP policy to promote national interests, while acknowledging that the various IP obligations are counterbalanced by several flexibilities, including the right to establish local exhaustion policies. The paper concludes with policy recommendations.
Topic:
International Trade and Finance, NAFTA, Trans-Pacific Partnership, Innovation, and USMCA
Political Geography:
United States, China, Canada, Asia, North America, and Mexico

11. International Cooperation: Is the Multilateral System Helping?

Author:
David M Malone and Rohinton P. Medhora
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper includes essential history of how the multilateral world has evolved over the last 150 years, followed by an examination of several types of multilateral systems: the United Nations and related organizations (including the World Bank group and the International Monetary Fund), and the World Trade Organization; regional organizations; and cross-cutting multilateral or plurilateral groupings with more limited, generally consultative purposes, such as the Group of Seven and BRICS (Brazil, Russia, India and China). It concludes with some reflections on the implications for multilateralism of a defection from its attractions and principles by key actors.
Topic:
International Cooperation, World Trade Organization, World Bank, Multilateral Relations, IMF, and BRIC
Political Geography:
Russia, China, Europe, India, Asia, Brazil, South America, and North America

12. The Belt and Road Initiative: Motivations, Financing, Expansion and Challenges of Xi's Ever-expanding Strategy

Author:
Alex He
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper argues that with more objectives added since its inception in 2013, China’s Belt and Road Initiative (BRI) has evolved into a much more expansive grand strategy that includes a package of themes and goals. It examines the policy-making process of the BRI by exploring the motivations behind the plan President Xi Jinping proposed and how the initial Silk Road projects have developed into China’s package of strategies over the past few years. The priorities and performance of China’s investments in the BRI are discussed from the angle of geographical distribution, routes and projects, priority sectors and the connection between the BRI and the previous “going out” strategy China started at the beginning of the twenty-first century. The model and the specific ways China finances and invests in BRI projects, to a great extent, decided the nature of the China-led global infrastructure investment plan. BRI financing is reviewed in detail. Based on the geopolitical and geo-economic analysis of the BRI in the previous parts, the implications of the BRI for global governance as it goes beyond the ambitious infrastructure investment plan are revealed. The risks and problems facing the BRI and the controversy and criticism it has encountered are also addressed. Finally, the paper summarizes the BRI’s ever-expanding themes and the problems and risks it faces, and their implications for the future of the BRI.
Topic:
Development, Imperialism, Infrastructure, Belt and Road Initiative (BRI), and Strategic Competition
Political Geography:
China and Asia

13. Digital Trade at the WTO: The CPTPP and CUSMA Pose Challenges to Canadian Data Regulation

Author:
Patrick Leblond
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
On the margins of the Group of Twenty leaders’ meeting in Osaka, Japan on June 28-29, 2019, Canada and 23 others signed the Osaka Declaration on the Digital Economy. This declaration launched the “Osaka Track,” which reinforces the signatories’ commitment to the World Trade Organization (WTO) negotiations on “trade-related aspects of electronic commerce.” In this context, unlike its main economic partners (China, the European Union and the United States), Canada has yet to decide its position. The purpose of this paper is thus to help Canada define its position in those negotiations. To do so, it offers a detailed analysis of the e-commerce/digital trade chapters found in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada-United States-Mexico Agreement (CUSMA), the North American Free Trade Agreement’s replacement, in order to identify the potential constraints that these agreements could impose on the federal government’s ability to regulate data nationally as it seeks to establish a trusting digital environment for consumers and businesses. The analysis leads to the conclusion that Canada’s CPTPP and CUSMA commitments could ultimately negate the effectiveness of future data protection policies that the federal government might want to adopt to create trust in the data-driven economy. As a result, Canada should not follow the United States’ position in the WTO negotiations. Instead, the best thing that Canada could do is to push for a distinct international regime (i.e., separate from the WTO) to govern data and its cross-border flows.
Topic:
International Cooperation, International Trade and Finance, World Trade Organization, European Union, and Digital Economy
Political Geography:
United States, China, Europe, Canada, Asia, and North America

14. China and International Financial Standards: From "Rule Taker" to "Rule Maker"?

Author:
Hongying Wang
Publication Date:
08-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Following the global financial crisis, international financial standard-setting bodies granted emerging economies unprecedented representation. Some observers expected the existing system of international financial regulation to be undermined by the larger number of players and their diverging interests from the traditional standard setters. This paper examines whether China, the largest emerging economy, has influenced the international financial regulatory regime. It finds that China has, by and large, been a “rule taker” so far, but points out some important signs of change. It argues that with improved technical capacity, greater stakes in international financial standards and rising structural power, China is poised to increase its participation in the making of international financial standards.
Topic:
Regulation, Global Political Economy, and Fiscal Policy
Political Geography:
China and Asia

15. Made in China 2025 as a Challenge in Global Trade Governance: Analysis and Recommendations

Author:
Anton Malkin
Publication Date:
08-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper provides a reassessment of Made in China 2025 (MIC 2025) — China’s industrial policy framework aimed at helping the country overcome the much-maligned middle-income trap — in the context of global trade governance. It suggests that China’s industrial policies have been viewed too narrowly — without sufficient attention to longer-term global governance issues — by a large segment of the global business and policy-making community. The paper argues that the general aims of MIC 2025 and the policies that underpin them are not unreasonable, given the increasingly prevalent dilemmas in global trade that China’s leaders are grappling with. These include problems of international development arising from growing global industrial concentration — driven by the growth of the intangible economy — and China’s shrinking access to importing and developing technological components (such as semiconductor chips) that are increasingly characterized as “dual-use” by China’s trading partners. This suggests that resolving the concerns of China’s trading partners regarding China’s industrial policies requires global trade governance reform to ensure an equitable, rules-based global trading order that addresses the legitimate needs of developing and middle-income economies in acquiring foreign-owned technological components and know-how, for the purposes of economic development. The paper concludes by outlining specific recommendations for Canada’s policy makers in improving their economic relationship with China in the context of MIC 2025.
Topic:
Development, Industrial Policy, Science and Technology, Governance, and Free Trade
Political Geography:
China, Canada, Asia, and North America

16. Crisis in the WTO: Restoring the Dispute Settlement Function

Author:
Robert McDougall
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The impasse in the World Trade Organization (WTO) over the appointment of new members of the Appellate Body is just one symptom of crisis in cooperation on trade. Driven by skepticism about multilateralism and binding dispute settlement, and by a growing strategic and economic rivalry with China, the current US administration has elevated longstanding US concerns about WTO dispute settlement to new heights. The inability of WTO members to exercise their collective authority to interpret the meaning of their WTO commitments has meant that the Appellate Body is effectively not subject to any checks and balances. As other WTO members blocked US efforts to negotiate more member control, the United States increasingly turned to unpopular unilateral mechanisms, culminating in the current block on new appointments as part of its more disruptive trade policy. Assuming the United States will eventually return to rules-based trade, restoring the WTO dispute settlement system to full capacity and enhancing its legitimacy will likely require some changes. This might include improving mechanisms for political oversight, diverting sensitive issues from adjudication, narrowing the scope of adjudication, improving institutional support and providing members more say over certain procedures. Preserving compulsory, impartial and enforceable dispute settlement in the WTO will require an accommodation of different perspectives on how the system should function. Achieving this, in whatever form, will contribute to maintaining and even strengthening multilateral cooperation on trade.
Topic:
International Trade and Finance, World Trade Organization, Global Political Economy, and Multilateralism
Political Geography:
United States, China, Asia, and North America

17. A Deeper Look at China’s “Going Out” Policy

Author:
Hongying Wang
Publication Date:
03-2016
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
In recent years, the world has seen rapid growth in China’s financial reach beyond its borders. Following the announcement of a “going out” strategy at the turn of the century, many Chinese enterprises have ventured to invest and operate abroad. After three decades as primarily a recipient of foreign direct investment (FDI), China has now emerged as a major FDI-originating country as well. Much of China’s foreign aid is closely entangled with its outgoing FDI, and it has also been rising. Since 2013, the Chinese government has been pushing for a new One Belt, One Road (OBOR) initiative, aiming to connect China with countries along the ancient Silk Road and a new Maritime Silk Road via infrastructure investment. In addition, since 2009, China has actively promoted the internationalization of its currency, the renminbi (RMB). There has been a great deal of anxiety about the motivations behind China’s going out policy and its possible international consequences. Many view it as an expression of China’s international ambition and a strategy that threatens the existing international order; however, that is not the whole story. An equally important but often less understood issue is the role of China’s domestic politics and political economy in shaping its new activism in foreign financial policy. Moreover, it is unclear how successful the going out policy is. The complexity of China’s going out policy was the topic for a recent round table discussion hosted by the Centre for International Governance Innovation and the Foreign Policy Institute at the School of Advanced International Studies of Johns Hopkins University in Washington, DC.[1] Participants discussed a number of issues around two broad themes: the impact of domestic political economy on China’s foreign economic policy and the challenges for China’s external financial strategy — in particular, its OBOR initiative.
Topic:
Markets, Political Economy, Monetary Policy, Infrastructure, Foreign Direct Investment, and Financial Markets
Political Geography:
China

18. China and Global Energy Governance under the G20 Framework

Author:
Alex He
Publication Date:
03-2016
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper explores China’s perspectives and practices in its quest for overseas energy supply security and its participation in international energy cooperation since becoming a net oil import country in 1993. It compares the traditional approach, in which China mainly focuses on bilateral means to pursue its overseas energy supply security, and the new concept of energy security, in which greater involvement in global energy governance, in particular in the Group of Twenty (G20), is highlighted to promote China’s energy security. The paper argues that China still retains a bilateral and regional cooperation approach, while making progress in developing closer cooperation with existing major global energy governing institutions. The One Belt, One Road strategy proposed in 2013 is regarded as a strengthened version of the bilateral and regional cooperation approach. Chinese academic circles constitute the main forces advocating China’s more positive participation in global energy governance. The G20 provides significant institutional arrangements to coordinate big powers to govern the international energy markets and to address climate change. This paper suggests that, given China’s growing prominence at the G20, it could be the proper platform for the country to play a more active role in global energy governance.
Topic:
Climate Change, Energy Policy, Environment, Oil, Regional Cooperation, Bilateral Relations, Governance, and G20
Political Geography:
China

19. Is Indonesia the Next China?

Author:
Wendy Dobson
Publication Date:
02-2016
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper reviews Indonesia’s economic prospects and what these imply for a closer relationship with Canada. By posing the question “Is Indonesia the next China?,” the author suggests that Indonesia has the considerable economic potential envisaged by foreign investors, but conveys uncertainty as to whether Southeast Asia’s most populous country can make the changes necessary to realize that potential. A review of the economic record and comparison of China’s and Indonesia’s economic structures, endowments and institutions show major differences between the two countries. The paper further questions what it will take to realize Indonesia’s potential, finding the answers to be: human capital development; increased participation in the region’s global value chains; meeting the growing middle-class demand for modern services; raising productivity in agriculture and fishing; and increasing use of the Internet. Failure to make these changes will increase the chances of Indonesia’s growth in per capita incomes slowing and falling into the middle-income trap. Canada’s role will be to monitor closely how Indonesia tackles its five priorities at the same time as it responds to the opportunities to exploit Indonesia’s abundant natural resources, urbanization and its expanding consumer demand for modern services and educational opportunities.
Topic:
Economics, Emerging Markets, Human Welfare, International Trade and Finance, Natural Resources, and Regulation
Political Geography:
China and Indonesia

20. China and the Trans-Pacific Partnership Agreement

Author:
John Whalley and Li Chunding
Publication Date:
05-2016
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The Trans-Pacific Partnership (TPP) Agreement has now been concluded, but it still faces the challenge of ratification in each of the 12 member countries that are partners to the agreement. China is the world’s second- largest economy, but is not part of the TPP Agreement, which has provoked a great deal of debate in China on the best strategy for China to deal with the TPP. This paper analyzes China’s possible trade strategy, raising three issues for consideration, given the TPP Agreement. First, security of market access should be China’s main concern in any free trade agreement (FTA) negotiation, but the TPP does not include content that is particularly relevant to this issue. Second, the nal TPP Agreement is somewhat less than the high-level, ambitious agreement that has been proclaimed. Third, the rati cation process in all 12 member countries will be slow and may possibly not even happen. This paper sets out four strategies for China: to promote the development of China’s remaining regional and bilateral FTAs; to negotiate a bilateral FTA with the United States; to promote deep domestic reform and opening up by enlarging the coverage of the TPP; and, nally, to negotiate its entry in the TPP as soon as possible, so that the terms of entering the agreement do not degenerate for China.
Topic:
International Political Economy
Political Geography:
China

21. The Shadow Banking System of China and International Regulatory Cooperation

Author:
Zheng Liansheng
Publication Date:
03-2015
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The shadow banking system was defined in 2007 by Paul McCulley, the managing director of Pacific Investment Management Company, but it began to receive significant attention in the immediate aftermath of the GFC. Since the beginning of the financial crisis in 2008, the regulatory agencies of different countries, international organizations and think tanks have all carried out in-depth research into shadow banking and have released a series of results. Regulatory reforms have also addressed shadow banking, the most important of which is the US Dodd-Frank Act of 2010, which aims to restrain the expansion and risk taking of shadow banking in the United States. The United Kingdom and the European Union have also adopted reforms and built up a supervisory system to track the risks of the shadow banking system.
Topic:
Financial Crisis
Political Geography:
United States, China, United Kingdom, and Europe

22. Internationalization of the Renminbi: Developments, Problems and Influences

Author:
Ming Zhang
Publication Date:
03-2015
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Due to the 2008-2009 global financial crisis, the Chinese government began to promote renminbi (RMB) internationalization in order to raise its international status, decrease reliance on the US dollar (USD) and advance domestic structural reform. RMB internationalization has achieved progress not only in cross-border trade settlement, but also in the offshore RMB markets. However, the rampant cross-border arbitrage and the relatively slow development of RMB invoicing compared to RMB settlement are becoming increasingly problematic. RMB internationalization has exerted significant influence on not only the Chinese economy but also other emerging market economies. RMB internationalization complicates domestic monetary policy, exacerbates the currency mismatch on China's international balance sheet and increases both the scale and volatility of short-term capital flows. It offers emerging economies another alternative for pricing domestic currency and investing foreign exchange reserves. Its overall impact on the international monetary system's stability will depend on how the capital account is liberalized and the consistency and transparency of Chinese monetary policy. This paper concludes with five recommendations for Chinese policy makers to promote RMB internationalization in a sustainable way that is conducive to international stability.
Topic:
Development, Economics, and Government
Political Geography:
United States and China

23. The China (Shanghai) Pilot Free Trade Zone: Backgrounds, Developments and Preliminary Assessment of Initial Impacts

Author:
John Whalley
Publication Date:
02-2015
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The China (Shanghai) Pilot Free Trade Zone (SPFTZ) founded in September 2013, is a trial for China's new round of “reform and opening up” (China.org.cn 2008). The SPFTZ has promised liberalization on capital account and trade facilitation as its main objectives. This paper discusses reasons why China needs such a pilot zone after three decades of economic development, examines the differences between the SPFTZ and other free trade zones (FTZs) and highlights the developments of the SPFTZ since its inception. The SPFTZ's initial impressions are assessed, especially its impact on the opening of China's capital account and financial liberalization. The hope is that the success of the SPFTZ, and more pilot policies replicated in China, will give rise to a more balanced Chinese economy in the following decade.
Topic:
Development and Economics
Political Geography:
China

24. The Influence of RMB Internationalization on the Chinese Economy: Theory and Policy

Author:
Fan He and Qiyuan Xu
Publication Date:
02-2015
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
With a balance between radicalism and gradualism, renminbi (RMB) cross-border settlement covers all of the items in China's balance of payments (BoP), including financial accounts, although some of these accounts are still controlled by means of quotas and administrative approval. By the end of the first quarter in 2014, the amount of RMB trade settlement had reached ¥11 trillion since the pilot scheme was launched in July 2009. RMB cross-border settlement has become increasingly important for monetary authorities in terms of macroeconomic policy frameworks. This is especially the case with the more sophisticated conditions in global monetary markets, which result not only from the nontraditional monetary policies employed by the European Central Bank and the Bank of Japan, but also the ongoing quantitative easing (QE) tapering by the US Federal Reserve and the spillover effects on emerging economies. It is increasingly important to evaluate the potential influence of RMB internationalization on China's macroeconomy. A framework, which includes monetary supply and demand, was created to analyze the influences of RMB cross-border settlement on China's domestic interest rate, asset price and foreign exchange (forex) reserves. RMB settlement behaves in different ways with the various items in BoP, such as imports, exports, foreign direct investment (FDI), overseas direct investment (ODI), RMB Qualified Foreign Institutional Investor (RQFII), RMB Qualified Domestic Institutional Investor (RQDII) and cross-border loans. It was found that RMB settlement in different items leads to different effects on China's economy. For RMB export settlement, RMB overseas direct investment (RODI) and RQFII at the initial stage, RMB settlement does not affect China's interest rate and asset price. In addition, more favourable to the People's Bank of China (PBoC), foreign exchange reserves increase less with these reforms; therefore, they should be promoted with priority. However, it is necessary to stress that all settlements should be based on real transactions in order to prevent fake exports. For RMB import settlement, RODI and RQDII at the initial stage, these pilot schemes exert influences on China's economy through interest rate changes, causing an additional increase of forex reserves. Although other short-term items in the financial account could also impact the interest rate, the items in this group are either based on real business such as trade and investment or on financial transactions at the initial stage on a small scale. Therefore, this group has a relatively moderate influence on the interest rate. It is important to remember that this negative by-product is a result of the assumption that the PBoC targets exchange rate stability. If the PBoC sets the exchange rate system to be flexible enough, then such pilot schemes will not cause an increase of forex reserves. It is thus essential to advance exchange rate regime reforms to keep up with the steps of RMB internationalization. With the progress in RQDII and RQFII, the endorsement of issuing dim sum bonds for capital backflows and with the increase in lending from the offshore to the onshore market, these types of RMB cross-border settlements will not exert pressure on forex reserves; however, they do have an impact on the money market. If the amount of RMB flowing through these items is large enough, the interest rate and asset price will be significantly affected, and could be in conflict with the intended monetary policy. These types of transactions are the most risky to monetary authorities; therefore, they should be cautious regarding these items. In the short term, RMB settlements in these kinds of items should be regulated with quotas. In the medium to the longer term, these items should be opened in a gradual way.
Topic:
Foreign Exchange and Monetary Policy
Political Geography:
Japan, China, and Europe

25. The State-owned Enterprises Issue in China's Prospective Trade Negotiations

Author:
John Whalley and Hejing Chen
Publication Date:
10-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
China, in the next few years, faces the prospect of major regional and bilateral trade negotiations possibly including the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership with the Association of Southeast Asian Nations (ASEAN) and Japan, Korea, India, Australia and New Zealand and separate negotiations with India, Korea and Japan, potentially the United States and even possibly the European Union. A likely key element in such negotiations, and one already raised by the United States in the TPP negotiations, is that of trade arrangements involving state-owned enterprises (SOEs). China is viewed from outside as having a large SOE sector, and large SOEs are viewed as having a protected monopoly position in domestic Chinese markets.
Topic:
International Trade and Finance, Markets, and World Trade Organization
Political Geography:
Japan, China, Europe, India, Asia, Australia, and Korea

26. China in the G20 Summitry: Review and Decision-making Process

Author:
Alex He
Publication Date:
10-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
As the largest emerging economy, China believes that the Group of Twenty (G20), instead of the Group of Eight (G8), is the ideal platform for its participation in global governance. This paper examines the reasons why China joined the G20 rather than the G8, and then focuses on a detailed review of China's participation in G20 summits since the enhanced forum began in 2008. China took a very active and cooperative attitude in dealing with the global financial crisis in 2008-2009. The paper observes that China also insisted on its own agenda for reforms to the international monetary system, through reforms to the international financial institutions that manage it — in particular, raising the number of voting shares and the representation of developing countries at the IMF and the World Bank. Based on the reviews of China's performance in the G20 summits since 2008, the paper explores China's policy making through its participation in the G20, determining that it is shaped by several major economic departments in addition to the Ministry of Foreign Affairs, and coordinated by a vice premier responsible for economic and financial affairs. The paper concludes that China has gained immensely from its participation in the G20. Most importantly, China entered the centre stage of global economic governance through the G20, which allowed the country to demonstrate that it is a responsible great power, and communicate and maintain relations with other major powers. The main challenges China has faced since joining the G20, from the perspective of some Chinese scholars, are a lack of capacity for agenda setting and shaping initiatives, as well as inadequate communication and coordination among different government departments and between the Sherpa and financial tracks of the G20.
Topic:
Economics, International Political Economy, International Trade and Finance, International Monetary Fund, Global Recession, Financial Crisis, and World Bank
Political Geography:
China

27. China and Sovereign Debt Restructuring

Author:
Hongying Wang
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
More than a decade after it put forth the idea of the Sovereign Debt Restructuring Mechanism (SDRM) in the early 2000s, the International Monetary Fund (IMF) is again seeking to engage various stakeholders in a new round of discussions about improving sovereign debt restructuring. As a major international creditor, China is an important force to reckon with. So far, the Chinese government has said little publicly regarding the recent IMF reports on this issue. Chinese policy makers and analysts are supportive of the IMF's attempt to explore ways for earlier and more orderly debt restructuring, but they find the proposed reforms to be only marginally useful. From China's point of view, the most important question in debt management is how to prevent excessive borrowing and lending and reduce the likelihood of unsustainable debt. It sees discussions about the mechanisms of sovereign debt restructuring as having little effect on this question. As an international creditor, China's main concern has to do with safeguarding the value of its overseas assets from the detrimental effect of macroeconomic policies of Western countries, especially the United States. This is not an issue that can be addressed by improved debt restructuring mechanisms. China remains deeply concerned about the power imbalance between developed and developing countries in the international financial system. Going forward in the global dialogue over sovereign debt restructuring, China's priority will be to minimize international financial instability while protecting the development needs of developing countries.
Topic:
Debt and International Monetary Fund
Political Geography:
United States and China

28. China's Goals in the G20: Expectation, Strategy and Agenda

Author:
Alex He
Publication Date:
08-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The G20 has emerged as the lynchpin of China's involvement in global economic governance. It remains the only economic institutional setting where the country can operate on par with major Western powers. China has a strong interest in maintaining the status of the G20 as the premier forum for economic cooperation, and a vested interest in ensuring that the G20 does not degrade into yet another “talk shop” of multilateral diplomacy. However, the Chinese leadership's current approach to the G20 is not driven by a desire to position the country as a leading agenda setter. Instead, China's main policy priority is ensuring that the country is treated as an equal and respected partner. China recognizes that in many ways it is still in a comparatively weak position and does not have the institutional capabilities and talents needed to operate in global financial and economic institutions such as the G20.
Topic:
Economics, International Cooperation, and International Trade and Finance
Political Geography:
United States and China

29. Crisis Management Mechanisms: Pathologies and Pitfalls

Author:
David A. Welch
Publication Date:
08-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
As events demonstrate on a regular basis, the Asia-Pacific is a region prone to crisis. In recent years there has been a marked increase in the use of military force to signal interests or resolve, and even, in some cases, to alter the status quo, particularly in the East and South China Seas. Fortunately, none of these “mini crises” have escalated to the level of a shooting war. The received wisdom is that, all other things being equal, no country in the region desires conflict, owing to their high levels of economic interdependence. However, it is clear that in a context of rising nationalism, unresolved historical grievances and increasing hostility and suspicion, there is no reason to be complacent about the prospect of managing every future crisis successfully. Hence the recent surge in interest in crisis management “mechanisms” (CMMs). This paper explores the dangers of thinking of crisis management in an overly technical or mechanistic fashion, but also argues that sensitivity to those very dangers can be immensely useful. It draws upon US and Soviet experiences in the Cuban missile crisis to inform management of a hypothetical future Sino-American crisis in the East China Sea, and to identify general principles for designing and implementing CMMs.
Topic:
Conflict Prevention, Foreign Policy, International Security, and Political Theory
Political Geography:
United States, China, and Asia

30. Global Cybercrime: The Interplay of Politics and Law

Author:
Aaron Shull
Publication Date:
06-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Examining global cybercrime as solely a legal issue misses an important facet of the problem. Understanding the applicable legal rules, both domestically and internationally, is important. However, major state actors are using concerted efforts to engage in nefarious cyber activities with the intention of advancing their economic and geostrategic interests. This attempt to advance a narrow set of economic interests through cybercrime and economic cyber espionage holds to the potential to erode the trust in the digital economy that has been a necessary condition for the success of the Internet as an economic engine for innovation and growth. By pursuing these efforts, states are prioritizing short-term interests over long-term stability and a responsibly governed, safe and secure Internet platform. This paper explores the recent unsealing of a 31-count indictment against five Chinese government officials and a significant cyber breach, perpetrated by Chinese actors against Western oil, energy and petrochemical companies. The paper concludes by noting that increased cooperation among governments is necessary, but unlikely to occur as long as the discourse surrounding cybercrime remains so heavily politicized and securitized. If governments coalesced around the notion of trying to prevent the long-term degradation of trust in the online economy, they may profitably advance the dialogue away from mutual suspicion and toward mutual cooperation.
Topic:
Defense Policy, Crime, International Trade and Finance, Terrorism, and Bilateral Relations
Political Geography:
United States, China, and Asia

31. From "Taoguang Yanghui" to "Yousuo Zuowei": China's Engagement in Financial Minilateralism

Author:
Hongying Wang
Publication Date:
12-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
As part of a shift toward a more activist foreign policy, China has accelerated its engagement in minilateralism, which is the gathering of a sub-group of countries within or outside a multilateral institution to solve a problem when the multilateral institution is unable to reach agreements among its members. This paper examines China's minilateral diplomacy in the financial area. Although China has been involved in regional financial cooperation for the last 15 years, its recent minilateral initiatives, such as the New Development Bank (NDB), the Contingent Reserve Arrangement (CRA) and the Asian Infrastructure Investment Bank (AIIB), are far more China-centred. What are China's motivations? Will these minilateral schemes undermine the traditional multilateral institutions? This paper argues that the Chinese government seeks to use financial minilateralism to stimulate reform of global financial institutions, provide financial public goods for its regional neighbours and fellow developing countries, as well as directly promote China's economic and political interests. China's financial minilateralism is not meant to overthrow the existing multilateral institutions, but this could change depending on the interaction between how the world responds to China's new activism and the domestic political dynamics in China. Western countries should understand and accommodate China's aspirations and encourage China to keep its minilateralism open.
Political Geography:
China

32. Sources of Tension in the Asia-Pacific: Strategic Competition, Divided Regionalism and Non-traditional Security Challenges

Author:
James Manicom
Publication Date:
08-2013
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
There are a number of strategic challenges currently affecting the Asia-Pacific. In a period of global uncertainty, China has emerged as a confident and powerful actor, while the ability of the United States to remain the region's hegemonic power has come into question. Maritime boundary claims, regionalism and unresolved Cold War sovereignty disputes are a source of considerable uncertainty. A number of non-traditional security challenges are also emerging, including energy and food insecurity, cyber security and the threat of a climate catastrophe-related humanitarian crisis. Canada and Australia — resource-based economies with a record of bilateral and institutional engagement in the region, and important US allies — have an interest in these challenges, and in ensuring regional strategic stability that promotes economic growth.
Topic:
Development, Economics, and Governance
Political Geography:
United States, China, Canada, Israel, Australia, Australia/Pacific, and Asia-Pacific

33. China and the Arctic: China's Interests and Participation in the Region

Author:
Kai Sun
Publication Date:
11-2013
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
As China's presence in the Arctic grows, international attention on China in the Arctic also grows. This paper clarifies why China is interested in the Arctic and its role in joining the Arctic play, and touches on future trends in this regard. The paper begins with a discussion of China's recent Arctic capacity building and diplomacy, and the surge of interest in Arctic affairs by Chinese social scientists and strategists in recent years. China looks north for basically four reasons: it is influenced by environmental changes in the Arctic; it is drawn by the business opportunities arising from the opening of the Arctic passages and better access to Arctic resources; and it is also committed to maintaining good governance in the Arctic — which is also in its best interests.
Topic:
Foreign Policy, Diplomacy, Economics, Oil, Natural Resources, and Governance
Political Geography:
China and Israel

34. East Asia and the Arctic: Alaskan and American Perspectives

Author:
Jerry McBeath
Publication Date:
12-2013
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper concerns the US view of East Asian nations' involvement in the Arctic, emphasizing the perspective of Alaska, the only US Arctic state. It treats six different areas of US/Alaska policy: US national strategy for the Arctic; oil and gas exploration and development; marine transportation; fisheries; investment in infrastructure; and governance. The study finds few differences between the positions of Alaska and the United States, notwithstanding often-hostile rhetoric from leaders in the United States' farthest north frontier. In general terms, both Alaska and the United States have historically sought trade and investment ties with East Asian nations. China has now replaced Japan as Alaska's major trading partner, followed by South Korea and Taiwan.
Topic:
Economics, Food, and Infrastructure
Political Geography:
United States, China, Taiwan, East Asia, South Korea, Alaska, and Arctic

35. A Policy Mismatch: Canada and the United States in the Asia-Pacific Region

Author:
James Manicom
Publication Date:
11-2012
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The United States and Canada have simultaneously re- invigorated their diplomatic and military postures toward the Asia-Pacific region. As two of the world's closest allies, it is worth exploring the possible synergies and tensions between their efforts to identify areas of possible policy coordination. Canada has considerable assets that could support US diplomacy in the region, including the legacy of its good offices and its close ties with the US military; however, these assets are outweighed by three liabilities. First, Canada's diplomacy to the Asia-Pacific is driven by its desire to diversify away from the US market. Although relatively innocuous in isolation, the politics of this shift, driven by growing concern in Canada about whether the United States remains a reliable market for energy exports, adds a layer of complexity. Second, Canada's closer economic ties with China could undermine its willingness to support the United States on tough regional security issues in the Asia-Pacific. Third, and related, Canadian silence about navigational freedoms, the primary security issue between the United States and China in East Asia, has not gone unnoticed. This paper argues that, on balance, Canada may not be an ideal Pacific partner for the United States.
Topic:
Defense Policy, Arms Control and Proliferation, Diplomacy, International Trade and Finance, and Bilateral Relations
Political Geography:
United States, China, Canada, East Asia, Asia, Australia/Pacific, and Asia-Pacific

36. A Flop and a Debacle: Inside the IMF's Global Rebalancing Acts

Author:
Paul Blustein
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Cooperation among major countries to shrink global imbalances in trade and capital flows is highly desirable for the sake of promoting a sustainable recovery from the financial crisis that erupted in 2008. The story that unfolds in this paper does not bode well for such cooperation. It is a detailed account of the initiatives, led by the IMF, to address imbalances prior to the 2008 global financial crisis.
Topic:
Economics, International Trade and Finance, and International Monetary Fund
Political Geography:
China

37. Perspectives on the G20: The Los Cabos Summit and Beyond

Author:
James A. Haley
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The G20 leaders meeting in Los Cabos confront a number of challenges. Most prominent among these is the state of the global economy, which remains dangerously unbalanced, and in which the balance of risks is clearly weighted on the downside. These risks emanate from several sources.
Topic:
Economics, International Cooperation, International Organization, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
China

38. The Obama Administration and Latin America: Towards a New Partnership?

Author:
Daniel P. Erikson
Publication Date:
04-2010
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The presidency of Barack Obama ushered in a welcome honeymoon period in US-Latin American relations following eight years of the Bush administration's polarizing policies towards the region. Early optimism has been tempered by the reappearance of tensions in hemispheric relations. They include the rise of Brazil as a regional power, the role of Venezuela and the continued strain in US-Cuban relations. Regional relations are further complicated by China's growing economic presence in Latin America, increased ties with Iran and Russia, different US and Latin reactions to the June 2009 coup in Honduras, and the crisis response to the January 2010 earthquake in Haiti. Still, the US has potential to advance a strategy of substantive, issue oriented engagement designed to rekindle the early goodwill that resulted from Obama's election to the White House.
Topic:
International Relations and Diplomacy
Political Geography:
Russia, United States, China, Latin America, and Haiti

39. Approaches to Fostering Productivity Growth in Brazil, China and India

Author:
John Whalley, Manmohan Agarwal, and Yao Li
Publication Date:
04-2010
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Productivity growth is a significant contributor to GDP growth, particularly to increases in per capita income. However, there is considerable ambiguity regarding how to measure the concept of technical progress, and consequently on policies that would foster productivity growth. Brazil, China and India, three important emerging economies, are seeking to foster productivity growth through encouraging innovation and technology transfers from the more developed economies. But given the ambiguities about how to encourage innovation and technology transfers, governments in these countries adopted a plethora of policies in the hope that the combination will be effective. This ambiguity can also be seen in the much slower growth of productivity in Brazil than China, even though Brazil has scored higher on the World Bank's Knowledge Assessment Methodology.
Topic:
Development, Emerging Markets, Markets, Science and Technology, and Foreign Direct Investment
Political Geography:
China, India, and Brazil

40. The BRICSAM Countries and Changing World Economic Power: Scenarios to 2050

Author:
Manmohan Agarwal
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Rapid economic growth in the large developing countries collectively known as BRICSAM (Brazil, Russia, India, China, South Africa and Mexico) has the potential to change the balance of economic power in the world. This paper analyzes this potential building on developments in these economies over the past four decades in the context of the evolution of the world economy. This evolution has two significant features: increasing economic integration and a hiatus in growth. Increasing integration can be observed in the almost universal rise in the share of the exports of goods and services in GDP, and the increase in private capital flows. There has been a hiatus in growth since the 1973-1974 increase in the price of oil.
Topic:
Economics, Globalization, International Political Economy, and International Affairs
Political Geography:
Russia, China, India, South Africa, Brazil, and Mexico

41. The Implications of China's Ascendancy for Africa

Author:
Hany Besada
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
China's spectacular economic progress has led some security analysts and policy makers in the North and the South to question Beijing's intentions in other parts of the world. This paper examines the extent to which China's engagement with Africa has produced mutual benefits for both and whether Africa is reaping the necessary benefits required for poverty alleviation and economic development. Chinese state-owned enterprises have invested billions of dollars in foreign reserves, construction, and engineering resources assisting African oil-producing exporters. While many in the west have started to question China's extraordinary level of interest in Africa – in particular, its economic engagement with perceived repressive regimes – African leaders view China's entry as a means of pulling Africa onto the path of globalization. It is thus important that African leaders and policy makers ensure that Chinese trade and investment bring reciprocal and tangible benefits for Africans, and contribute to economic stability and good governance.
Topic:
Foreign Policy, International Cooperation, International Trade and Finance, Treaties and Agreements, and International Affairs
Political Geography:
Africa and China

42. China's Role as a Trade Bridge for Expanding Regional and World Trade

Author:
Min Gong and Wenpu Li
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
To understand China's trade relations with the US, Japan, and South Korea, we estimate a vector autoregressive model (VAR) model to investigate the trade interactions among these four countries using data from the period of the first quarter of 1993 to the fourth quarter of 2005. We find substantial Foreign Direct Investment (FDI)-induced indirect trade from Japan and Korea to the US through China, and between Japan and Korea through China. These indirect trade flows lead to increases in China's trade deficit with Japan and Korea as well as China's trade surplus with the US. The indirect trade flows through China also indicate the importance of China's role as a trade bridge. From the viewpoint of world trade growth, as a trade bridge, China contributes to the stable growth of the regional and world economies. However, China's role as a trade bridge may negatively affect its long-run economic growth.
Topic:
Globalization, International Political Economy, and International Trade and Finance
Political Geography:
United States, Japan, China, Asia, South Korea, and Korea

43. Regional Monetary Arrangements in ASEAN+3 as Insurance through Reserve Accumulation and Swaps

Author:
O.G. Dayaratna-Banda and John Whalley
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
East Asia is witnessing the emergence of an informal monetary system which focuses on self-insurance through own reserve accumulation and co-insurance through swaps. The former is concentrated in a small number of large countries (China, Japan, and Korea), while the latter involves informal monetary cooperation among monetary authorities in a large number of countries. The origins of this system lie in the Asian financial crises, and reflect concerns both to avoid repetition of similar events and any spread of further crises through contagion effects. This paper first characterizes and documents this emerging system describing how it works and what its objectives are, and then discusses its performance, its incompleteness, and assesses the system's ability to move towards deeper integration without adopting a single monetary authority as well as the impediments it faces. What is clear is that this type of system among individual countries is incomplete and falls well short of complete monetary integration, but at present it performs well even if it experiences a number of deficiencies. Most countries seem better off with partial reserve pooling, while incremental gains from higher degrees of pooling in the region tend to be small.
Topic:
Development, Economics, and Regional Cooperation
Political Geography:
Japan, China, Asia, and Korea

44. EU Commercial Policy in a Multipolar Trading System

Author:
Simon Evenett
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
In recent years, the bipolar multilateral trading system of the post-war years has given way to a multipolar alternative. Although many specifics have yet to be determined, some contours of this new trade policy landscape are coming into focus and in this short paper I examine their implications for the European Union's external commercial policy. Particular attention is given to both the state of business-government relations and the propensity to liberalise under the auspices of reciprocal trade agreements by Brazil, India, and China; the potential new poles of the world trading system. I consider the likely consequences of these developments, plus factors internal to both the European Union and the United States, for the possible con-tent of future multilateral trade initiatives.
Topic:
Development, Government, and International Trade and Finance
Political Geography:
United States, China, Europe, India, and Brazil

45. After the MFA, the CCAs (China Containment Agreements)

Author:
O.G. Dayaratna-Banda and John Whalley
Publication Date:
05-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The post-Multi Fiber Agreement (MFA) trade regime in textile and apparel appears to be emerging in ways which are quite different from what had been widely anticipated before the termination of Agreement on Textiles and Clothing (ATC). Since the end of ATC, there has been growing and spreading set of trade restrictions targeted primarily at China, the largest shipper of textile and apparel, through a series of agreements that we term China Containment Agreements. We discuss the evolution of these agreements, their behavioural responses, and then draw their parallels to those under the older MFA. We argue that there is potential for these restrictions to prolong and grow, as well as spread to other products through the product-specific safeguards mechanism included in the conditions of China's World Trade Organization accession.
Topic:
International Relations, Economics, and Treaties and Agreements
Political Geography:
China and Asia

46. Technology Upgrading and China's Growth Strategy to 2020

Author:
John Whalley and Weimin Zhou
Publication Date:
03-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
It is widely believed in China that in order to meet the target of tripling gross domestic product (GDP) per capita between 2005 and 2020, as set out in China's 11th five-year plan in 2005, a change in China's growth strategy from FDI promotion and export-led growth towards technology upgrading and higher productivity growth in manufacturing needs to occur. This paper seeks to evaluate the potential effectiveness of recent government initiatives to be taken to achieve these ends. In particular, plans these include increased educational spending, tax incentives, large research and development (R) projects, and changes to the regulatory environment. In measuring China's economic growth potential towards 2020, this paper employs an economic analysis of Total Factor Productivity and identifies the importance of continued domestic technical innovation.
Topic:
International Relations, Development, and Science and Technology
Political Geography:
China and Asia

47. Consequences of an Emerging China: Is Development Space Disappearing for Latin America and the Caribbean?

Author:
Nicola Phillips
Publication Date:
01-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The economic rise of China has caused a redrawing of global production and value chains, a restructuring of the global division of labour, and a restructuring of patterns of global demand and of the terms of trade. This paper examines the nature of the emerging economic relationship between Latin America and the Caribbean and China, and seeks to offer some reflections on the significance of this relationship for Latin American and Caribbean development. It begins with an overview of trade and investment relationships between Latin American countries and China, and examines the significance of the emergence of China for the region's development strategies and developmental prospects in greater detail. This paper reflects on the early impact of these emerging arrangements on the existing economic relationship between Latin America and the United States, and seeks in some ways to challenge understandings of this sort based on national economies and instead argues for a focus on global production and value chains, as well the new transnational division of labour.
Topic:
Development
Political Geography:
United States, China, America, Asia, Latin America, Central America, and Caribbean

48. Economic Size Trumps All Else? Lessons from BRICSAM

Author:
Timothy Shaw, Andrew F. Cooper, and Agata Antkiewicz
Publication Date:
12-2006
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Continuing CIGI's BRICSAM research, this paper questions whether size (economic or population) of emerging economies alone is enough to warrant accommodation in the rules and structures of the international system. The global realignment of states following the resulting power vacuum brought on by the end of the Cold War is finally materializing, as a new triangular formation has taken shape: the 'first world' club of the OECD; the 'second world' of emerging economies; and, a heterogeneous 'third world' of the rest. The interplay between and mobility among these groups of states deserves in-depth analysis. The core of this paper observes the economic and social trends of countries in the second tier, and their upwards aspirations towards the top-tier of the global architecture. Traced through a variety of indices, the growth of the BRICSAM group of countries (Brazil, Russia, India, China, South Africa, ASEAN-4 and Mexico) is demonstrated to be a powerful force in international economics and political economy. For the inclusion of these states, a change in the key aspects of global economic governance, the international architecture and geopolitics seems inevitable, and with it, new challenges arise for decision-makers and scholars alike.
Topic:
Cold War, Development, Economics, and Globalization
Political Geography:
Russia, China, India, South Africa, Brazil, and Mexico

49. Recent Regional Agreements: Why so many, so fast, so different and where are they headed?

Author:
John Whalley
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Recent years have witnessed a sharp increase in the number of regional trade agreements (RTAs) both concluded and under negotiation. This paper attempts to document and discuss this growth focusing on the United States (US), the European Union (EU), China, India and the agreements of other countries. The form, coverage, and content of these agreements vary considerably from case to case. This paper poses the following questions: why so many, why the variation, and why the recent increase in RTAs? Implications for the trading system are discussed in a final section.
Topic:
Development, International Trade and Finance, Regional Cooperation, and Treaties and Agreements
Political Geography:
United States, China, and India

50. The Asian Economic Revolution and Canadian Trade Policy

Author:
John Whalley
Publication Date:
08-2006
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper discusses the broad orientation of Canada's trade policy relative to two major historical phases of development based on a secure national market behind the National Policy from 1879 until the 1930s, and progressive integration with the United States (US) through Bilateral Agreements (1930s), the Auto Pact (1965), the Canada-US Free Trade Agreement (1987) and the North American Free Trade Agreement (NAFTA) (1994). Currently, Canada exports approximately 85% to the US, but imports from China account for 8% and are growing at over 20% a year. Sharply unbalanced (surplus) trade with the US is counterbalanced by unbalanced deficit trade with China. A scenario of elevated growth in Asia (principally China, India, and the Association of Southeast Asian Nations or ASEAN) poses challenges of relative disintegration from North America and growing global integration centered on Asia. Seemingly a series of implications follow; including positioning Canada within the emerging network of regional agreements in Asia, more resourcebased and Western Canada focused trade and infrastructure development, and responding to capital market integration with Asia. Broader issues include the potential adjustments facing Central Canada as Asian imports of manufactures displace both imported manufactures from the US and domestic production are raised.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, China, Canada, Asia, and North America