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61. Protectionism under Trump: The China Shock, Intolerance, and the "First White President"

Author:
Marcus Noland
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
In 2016, the United States elected an avowedly protectionist president. This paper uses US county-level electoral data to examine this outcome. The hypothesis that support for protectionism was purely a response to globalization is rejected. Exposure to trade competition encouraged a shift to the Republican candidate, but this effect is mediated by race, diversity, education, and age. If the turn toward protectionism is due to economic dislocation, then public policy interventions could mitigate the impact and support the reestablishment of a political consensus for open trade. If, however, the drivers are identity or cultural values, then the scope for constructive policy intervention is unclear.
Topic:
Economics, Politics, Donald Trump, and Protectionism
Political Geography:
China, Asia, North America, and United States of America

62. The state of China-European Union economic relations

Author:
Uri Dadush, Marta Dominguez-Jimenez, and Tianlang Gao
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
China and the European Union have an extensive and growing economic relationship. The relationship is problematic because of the distortions caused by China’s state capitalist system and the diversity of interests within the EU’s incomplete federation. More can be done to capture the untapped trade and investment opportunities that exist between the parties. China’s size and dynamism, and its recent shift from an export-led to a domestic demand-led growth model, mean that these opportunities are likely to grow with time. As the Chinese economy matures, provided appropriate policy steps are taken, it is likely to become a less disruptive force in world markets than during its extraordinary breakout period.
Topic:
Economics, Governance, European Union, Investment, and Trade
Political Geography:
China, Europe, and Asia

63. How does China fare on the Russian market? Implications for the European Union

Author:
Alicia Garcia-Herrero and Jianwei Xu
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
China’s economic ties with Russia are deepening. Meanwhile, Europe remains Russia’s largest trading partner, lender and investor. An analysis of China’s ties with Russia, indicate that China seems to have become more of a competitor to the European Union on Russia’s market. Competition over investment and lending is more limited, but the situation could change rapidly with China and Russia giving clear signs of a stronger than ever strategic partnership.
Topic:
Economics, Markets, Bilateral Relations, Governance, Investment, and Exports
Political Geography:
Russia, China, Europe, Eurasia, and Asia

64. Insights into China’s Developing Country Status

Author:
Tao Ma
Publication Date:
10-2019
Content Type:
Working Paper
Abstract:
As the international status of China as a rising power has been growing rapidly in the past 40 years, along with remarkable achievements in economic growth, China’s developing country status has been questioned by some Western developed countries. In January 2019, the US submitted to the WTO General Council the proposal An Undifferentiated WTO: Self-Declared Development Status Risks Institutional Irrelevance (WT/GC/W/757), presenting data arguing that China and some other developing countries had advanced to such an extent that they should be limited from being eligible for special and differential treatment and should give up their developing country status. During the WTO General Council meeting at the end of February, China and other developing countries hotly debated this issue with the US. China insisted that developing countries were confronted with mounting external tensions and their legitimate rights and interests in some international organizations and agreements had been constantly challenged. Against this background, it is critical to clarify China’s ongoing status as a developing country. Only after the real divide between China and developed countries has been clarified can China’s status as a developing country be secured.
Topic:
Development, Economics, and Trade
Political Geography:
China, Asia, and United States of America

65. Trade linkages and firm value: evidence from the 2018 US-China "trade war"

Author:
Yi Huang, Chen Lin, Sibo Liu, and Heiwai Tang
Publication Date:
04-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
On March 22, 2018, Trump proposed to impose tariffs on up to $50 billion of Chinese imports leading to a significant concern over the "Trade War" between the US and China. We evaluate the market responses to this event for firms in both countries, depending on their direct and indirect exposures to US-China trade. US firms that are more dependent on exports to and imports from China have lower stock and bond returns but higher default risks in the short time window around the announcement date. We also find that firms' indirect exposure to US-China trade through domestic input-output linkages affects their responses to the announcement. These findings suggest that the structure of US-China trade is much more complex than the simplistic view of global trade that engendered Trump's "Trade War" against China.
Topic:
Economics, International Cooperation, International Trade and Finance, Global Political Economy, Trade Wars, and Exports
Political Geography:
United States, China, and Asia

66. PeSCo – Anything There for European Defence?

Author:
Sandro Knezović
Publication Date:
02-2018
Content Type:
Working Paper
Institution:
Institute for Development and International Relations (IRMO)
Abstract:
The European strategic landscape has changed dramatically over the course of the last decade. The post-Cold War mantra about the obsolescence of conventional threats in the wider European space proved to be short-sighted with developments at its eastern �lanks, while security dysfunctions in the MENA region and their immanent consequences for the safety of European citizens have loaded a heavy burden on compromise-building and decision-making in the �ield of the Common Security and Defence Policy (CSDP) of the EU. Furthermore, the approach of the new US administration to European security and the strategic consequences of Brexit have changed the wider framework in which security of 'the Old Continent' is to be determined, hence stimulating European leaders to rethink European security in a strive for strategic autonomy of their own. The very ambitiously phrased EU Global Strategy that came out in June 2016, served as both catalyst and umbrella document for such an endeavour. However, in order to achieve measurable progress in responding to contemporary security challenges, it was clear that the EU needs to develop a structural way for member states to do jointly what they were not capable of doing at the national level. This is so especially in the environment in which China, Russia and Saudi Arabia are championing the defence spending, right after the US, while European states are signi�icantly trailing behind. The fact that the EU collectively is the second largest military investor and yet far from being among the dominant military powers only emphasises the burning issue of ef�iciency of military spending and the level of interoperability among member states’ armies. High-level fragmentation of the European defence market and the fact that defence industries are kept in national clusters is clearly contributing to that. The reality on the ground is obviously challenging traditional methods of co-operation that operate mainly in ‘national boxes’ and calling for a paradigm change in the wider policy context of CSDP. However, it remains to be seen to which extent will this new security environment actually be able to push the European defence policy context over the strict national boundaries.
Topic:
Security, Economics, Military Strategy, and European Union
Political Geography:
United States, China, Europe, Middle East, Asia, and Saudi Arabia

67. Making Korea Grow Again: Rebalancing the Moon Jae-in Economic Agenda

Author:
Choong Yong Ahn
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The Moon Jae-in administration in South Korea has taken a two-pronged approach to ensure urgently needed job creation and inclusive growth. Although measures towards each set of economic policies have been implemented since Moon took office in May 2017, what’s often referred to as “incomeled growth” has been prioritized over innovative growth. The income-led growth model is largely driven by domestic consumption through pro-labor distributional policies including a wage hike to raise the disposable income of low- and middleincome individuals, thereby triggering equity with growth. Focused more on the supply side, the innovative growth model encourages startups to create jobs and innovate. It is a great challenge for Korea to pursue growth and equity through both sets of policies. After a year in office, the Moon administration’s economic agenda, often referred to as J-nomics, has not fully produced the intended policy objectives in terms of job creation and growth. To mitigate a declining potential growth rate and pursue robust and inclusive growth, the twin policies need to be rebalanced, reprioritized, and interconnected in a mutually reinforcing manner to empower the private sector to play a bigger role. As a mid-sized open economy, Korea requires global market competitiveness on the supply side to create decent jobs by buoying entrepreneurship and innovation. Structural reforms in the labor market combined with deregulations necessary for the advent of disruptive 4th-industrial-revolution technologies must be expedited. Furthermore, a new business ecosystem in which win-win collaborations between globally-oriented conglomerates and small businesses must be encouraged to replace a zero-sum business culture.
Topic:
Economics, Science and Technology, Global Markets, and Economic Growth
Political Geography:
Asia, South Korea, and Korea

68. The Economic Importance of the KORUS FTA: A Case Study of the Korean Beef Market After Renegotiations

Author:
Jin Kyo Suh
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Beef trade was a major sticking point between the United States and South Korea in ratifying the KORUS FTA. The outcome of the renegotiations that led to the March 2018 agreement in principle did not impact sections pertaining to beef in the agreement, though looking at how beef trade would have been affected should the talks have failed highlights the importance of the agreement to both countries, but particularly the United States. This paper estimates the demand for imported beef in South Korea by source and product by using the production version of the Rotterdam demand system and assesses what the potential impact of U.S. withdrawal from the KORUS FTA would have been on beef trade between the U.S. and South Korea. The results suggest U.S. withdrawal from the KORUS FTA would have resulted in a considerable increase in Australian beef exports to South Korea, largely at the expense of U.S. beef. This is because there is significant price competition between beef imports from the United States and Australia. Furthermore, Korean consumers substitute American beef for Australian beef when the relative price of U.S. beef rises.
Topic:
Economics, Treaties and Agreements, Exports, and Trade Policy
Political Geography:
Asia, South Korea, North America, Korea, and United States of America

69. Who Can Win the Possible China-US Trade War?

Author:
Li Chunding
Publication Date:
06-2018
Content Type:
Working Paper
Abstract:
This paper uses a multi-country global general equilibrium (GE) model to numerically simulate the effects of possible China-US trade wars. We introduce an endogenous trade imbalance structure with trade cost into the model which helps to explore both tariff and non-tariff trade war effects. Our simulation results show that China will be significantly hurt by the China-US trade war, but negative impacts are affordable. The US can gain under unilateral sanction measures to China, but will lose if China takes retaliation measures. Comparing the effects under mutual trade war, China will lose more than the US. Introducing non-tariff barrier trade wars will intensify the negative effects, and comparatively negative effects to China are larger than to the US. Mexico’s involvement in trade war with the US will strengthen the negative effects and comparatively hurt the US more. Under non-cooperative and cooperative Nash bargaining equilibrium, the US can gain more than China in trade war negotiation, which means the US has stronger bargaining power than China. Additionally, trade wars between China and the US will hurt most countries and the world especially in GDP and manufacturing employment, but benefit their welfare and trade.
Topic:
Economics, International Trade and Finance, Tariffs, and Trade Wars
Political Geography:
China, Asia, North America, and United States of America

70. Country-Risk Rating of Overseas Investment from China (2018)

Author:
CROIC-IWEP
Publication Date:
01-2018
Content Type:
Working Paper
Abstract:
China's outbound direct investment hit a new high in 2016, reaching $196.15 billion, making the country the world's second-largest overseas investor. The volume of its outbound direct investment increased by 34.7% year-on-year in 2016 and accounted for 13.5% of the world's total — the first time it exceeded 10%. Since 2003, when the Ministry of Commerce joined hands with the National Bureau of Statistics and the State Administration of Foreign Exchange to start releasing authoritative investment data annually, China's outbound direct investment has kept increasing for 14 consecutive years. From 2002 to 2016, the annual average growth of its outbound direct investment reached 35.8%. In 2016, China's outbound direct investment once again exceeded the foreign direct investment it received, making it a net capital exporter for two consecutive years. Meanwhile, its outbound direct investment stock hit $1.35739 trillion at the end of 2016, the 6th largest in the world, two notches up compared with in 2015. In 2016, China had the most overseas M&A deals in history in terms of both number and value of M&A deals. In the future, China is expected to bring out more of its investment potentials and build a win-win cooperative relationship with other countries following its economic transition and upgrading, rising competitiveness of Chinese enterprises in overseas markets and steady advancement of the Belt and Road Initiative.
Topic:
Economics, Foreign Direct Investment, and Investment
Political Geography:
China and Asia

71. The Future of Business: Shaping Inclusive Growth in South-East Asia

Author:
Shubert Ciencia and Alex Maitland
Publication Date:
09-2018
Content Type:
Working Paper
Institution:
Oxfam Publishing
Abstract:
South-East Asia has seen remarkable economic growth over recent decades but also faces serious challenges, especially growing levels of inequality. Solutions are emerging, and the region’s leaders have agreed that inclusive growth is the way forward. Inclusive economies need inclusive businesses. Although at an early stage, we’re witnessing the potential for business to deliver the solutions. This discussion paper reviews the issues faced in the region, how business can be part of the solution through a spectrum of approaches, ways in which social enterprise models can be supported to thrive, and makes recommendations for the region’s businesses.
Topic:
Economics, Regional Cooperation, Innovation, and Inclusion
Political Geography:
Asia and Southeast Asia

72. The Mainstream Economics Interpretation of the Local State and Central-Local Relations in Post-Mao China: a Critical Review

Author:
Alexandre De Podesta Gomes
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
Decentralization and the role of local governments have long been touted as key factors in the Chinese economic miracle. This paper intends to critically assess the chief theories advanced by mainstream economics in its attempt to make sense of these aspects of China’s growth story. Firstly the theoretical underpinnings of fiscal federalism, new institutional economics, and market-preserving federalism approaches will be presented, as these theories offer the bedrock for most of the applied insights in which China is framed through the lenses of the central-local relations debate. Secondly, the idea of ‘market-preserving federalism, Chinese-style’ will be critically appraised, highlighting its shortcomings. Thirdly, the paper proceeds by bringing in the mainstream response to these problems, relying on the notion of political incentives and career concerns faced by local cadres. It will be argued that the continual adherence to some core tenets dear to the new institutional economics literature in all previous explanations prevents this broad camp of knowledge to properly grasp the complex dynamics of China’s decentralization drive and the role of local governments in the process. Finally, and in closing, an alternative approach will be offered.
Topic:
Economics, Local, Decentralization, and Federalism
Political Geography:
China and Asia

73. Social Stability and Resource Allocation within Business Groups

Author:
Haikun Zhu
Publication Date:
08-2018
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Using datasets on transactions within business groups and social sentiment in China, I show that state-owned enterprises (SOEs) use internal funds to address social unrest, complying with the government’s political goals. I use plausibly unexpected shocks to regional stability to analyze the response of SOEs to these events. I find that the government, as the controlling shareholder, adopts a carrot-and-stick approach. The government offers a “carrot” by injecting funds into SOEs located in the affected areas, which are then used to generate benefits to the public, such as larger labor payments and additional capital expenditures. However, if there are severe political conflicts that threaten its authority, the government applies a “stick” by withdrawing resources. The SOEs channel seems effective because local sentiment recovers around shocks when SOEs offer more benefits. Additional tests show that the SOEs channel is significant in economic magnitude compared to fiscal redistribution. As a result of the transfer, SOEs lose value after shocks, but firms in the region improve their performance later. This paper provides new evidence on how the intra-group allocation of resources incorporates political objectives, and has socioeconomic impact.
Topic:
Economics, Political Economy, Business, Capital, and Social Stability
Political Geography:
China and Asia

74. Korean Firms' Sustainability Practices and Their Role in the Green Economy

Author:
Younsung Kim
Publication Date:
11-2017
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Companies in industrialized nations have embraced environmental protection and sustainability as part of their international competitive strategies. The trend toward proactive environmental management has also grown in Korean firms, as consumers, investors, local policy networks, and the Lee Myung-bak administration’s green growth policy initiatives have provided an impetus for the greening of South Korean firms. However, despite heightened firm interest in environmental responsibility, there is little understanding of which types of sustainable activities Korean firms have implemented. Analyzing sustainability reports from 30 large Korean firms, this study finds that Korean firms are more likely to employ lower-order sustainability practices that can help prevent pollution and modify existing processes and products to reduce environmental impact. However, their focus on innovating clean technologies seems to be limited. To transition to a low-carbon, green economy, the Korean government should consider green growth policies that foster firms’ investments in higher-order sustainability strategies and scale up corporate sustainability more broadly in the Korean business community.
Topic:
Economics, Energy Policy, Environment, Renewable Energy, Sustainability, and Domestic Policy
Political Geography:
Asia, South Korea, and Korea

75. The Framework for a U.S.-Japan Free Trade Agreement

Author:
Derek M. Scissors and Dan Blumenthal
Publication Date:
09-2017
Content Type:
Working Paper
Institution:
Project 2049 Institute
Abstract:
The United States and Japan can create a bilateral free trade and investment agreement that both sides will sign and ratify. While the Trans-Pacific Partnership (TPP) initially appeared to qualify as the new approach the U.S., Japan, and East Asia needed. It failed to sufficiently promote free markets and address concerns to generate enough support from traditional protectionist opponents in the United States. Nonetheless, the TPP did clarify the value of a directly relatied initiative: a U.S.-Japan bilateral agreement. This monograph serves to provide a framework for a U.S.-Japan Free Trade Agreement (FTA) and offers an outline for what such an agreement should look like in order to work both economically and in terms of domestic politics.
Topic:
Economics, Treaties and Agreements, Domestic Politics, Investment, and Free Trade
Political Geography:
Japan, Asia, North America, and United States of America

76. Bond Yield Spillovers from Major Advanced Economies to Emerging Asia

Author:
Ansgar Belke, Irina Dubova, and Ulrich Volz
Publication Date:
03-2017
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This paper explores the extent to which changes to long-term interest rates in major advanced economies have influenced long-term government bond yields in Emerging Asia. To gauge long-term interest spillover effects, the paper uses VAR variance decompositions with high frequency data. Our results reveal that sovereign bond yields in Emerging Asia responded significantly to changes to US and Eurozone bond yields, although the magnitudes were heterogeneous across countries. The size of spillovers varied over time. The pattern of these variations can partially be explained by the implementation of different unconventional monetary policy measures in advanced countries.
Topic:
Economics, Emerging Markets, Monetary Policy, Interest Rates, and Bonds
Political Geography:
Asia

77. China and the Middle East: Venturing into the Maelstrom

Author:
James M Dorsey
Publication Date:
03-2016
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
China’s increasingly significant economic and security interests in the Middle East have several impacts. It affects not only its energy security but also its regional posture, relations with regional powers as well as the United States, and efforts to pacify nationalist and Islamist Uighurs in its north-western province of Xinjiang. Those interests are considerably enhanced by China’s One Belt, One Road initiative that seeks to patch together a Eurasian land mass through inter-linked infrastructure, investment and expanded trade relations. Protecting its mushrooming interests is forcing China to realign its policies and relationships in the region. As it takes stock of the Middle East and North Africa’s volatility and tumultuous, often violent political transitions, China feels the pressure to acknowledge that it no longer can remain aloof to the Middle East and North Africa’s multiple conflicts. China’s long-standing insistence on non-interference in the domestic affairs of others, refusal to envision a foreign military presence and its perseverance that its primary focus is the development of mutually beneficial economic and commercial relations, increasingly falls short of what it needs to do to safeguard its vital interests. Increasingly, China will have to become a regional player in competitive cooperation with the United States, the dominant external actor in the region for the foreseeable future. The pressure to revisit long-standing foreign and defence policy principles is also driven by the fact that China’s key interests in the Middle East and North Africa have expanded significantly beyond the narrow focus of energy despite its dependence on the region for half 1 China has signalled its gradual recognition of these new realities with the publication in January 2016 of an Arab Policy Paper, the country’s first articulation of a policy towards the Middle East and North Africa. But, rather than spelling out specific policies, the paper reiterated the generalities of China’s core focus in its relations with the Arab world: economics, energy, counter-terrorism, security, technical cooperation and its One Belt, One Road initiative. Ultimately however, China will have to develop a strategic vision that outlines foreign and defence policies it needs to put in place to protect its expanding strategic, geopolitical, economic, and commercial interests in the Middle East and North Africa; its role and place in the region as a rising superpower in the region; and its relationship and cooperation with the United States in managing, if not resolving conflict.
Topic:
Security, Diplomacy, Economics, Imperialism, and Infrastructure
Political Geography:
Africa, United States, China, Middle East, Asia, and North Africa

78. Export Crops and Civil Conflict

Author:
Joseph Felter and Benjamin Crost
Publication Date:
08-2016
Content Type:
Working Paper
Institution:
Empirical Studies of Conflict Project (ESOC)
Abstract:
Many governments and international experts consider a move towards high-value export crops, such as fruits and vegetables, as an important opportunity for economic growth and poverty reduction. Little is known, however, about the effects of export crops in fragile and conflict- affected countries. We exploit movements in world market prices combined with geographic variation in crop intensity to provide evidence that increases in the value of a major export crop exacerbate conflict violence in the Philippines. We further show that this effect is concentrated in areas with low baseline insurgent control. In areas with high insurgent control, a rise in crop value leads to a decrease in violence but a further expansion of rebel-controlled territory. These results are consistent with the hypothesis that insurgents gain strength from extorting agricultural exporters and that insurgent strength has a non-monotonic effect on conflict violence because strong insurgent groups can establish local monopolies of violence.
Topic:
Agriculture, Development, Economics, International Trade and Finance, Violence, and Exports
Political Geography:
Asia and Philippines

79. One Million Opportunities: The Impact of Mobile Internet on the Economy of Southeast Asia

Author:
Oxford Economics
Publication Date:
06-2016
Content Type:
Working Paper
Institution:
Oxford Economics
Abstract:
This study investigated the economic and social impact of mobile internet technology across the economies of South East Asia. In-house econometric research established the relationship between mobile internet penetration and key enablers of supply side growth including productivity and labour force participation. These results were applied to a group of economies in South East Asia to quantify the economic benefits of observed and forecast future increases in mobile internet penetration. Overall, increased mobile internet penetration is forecast to create an extra $58.1 billion in GDP and one million new job opportunities by 2020.
Topic:
Economics, Science and Technology, Labor Issues, and Internet
Political Geography:
Asia and Southeast Asia

80. At the Crossroads: The TPP, AIIB, and Japan's Foreign Economic Strategy

Author:
Saori N. Katada
Publication Date:
05-2016
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
In 2015, two mega-initiatives took shape that will affect economic relations in the Asia-Pacific region: the US-promoted Trans-Pacific Partnership (TPP) trade agreement and the China-led Asian Infrastructure Investment Bank (AIIB). Although they address different needs, both are expected to have profound effects on Asia's economic governance in the near future, and will shape economic norms in the Asia Pacific and beyond. Japan has joined the TPP but stayed out of the AIIB, decisions that might seem counterintuitive considering its history of resisting trade liberalization and of promoting infrastructure investment. Is Japan simply favoring its US ally over rival China? Or is it that Japan's position on the TPP and AIIB aligns with its own economic priorities, and enhances its geo-economic advantage? With a US-China competition over economic ideas and regional strategies, Japan occupies a unique position that may allow it to influence the direction of Asia-Pacific economic governance, which is now being battled out by the two "titans."
Topic:
Economics, International Trade and Finance, Political Economy, and Treaties and Agreements
Political Geography:
China and Asia