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342. China in Latin America: Major Impacts and Avenues for Constructive Engagement
- Author:
- Margaret Myers and Rebecca Ray
- Publication Date:
- 06-2019
- Content Type:
- Working Paper
- Institution:
- The Carter Center
- Abstract:
- Over the past two years, U.S. officials have sought to highlight China’s negative effects on the Latin American and Caribbean (LAC) region’s development and stability, whether to U.S. or Latin American audiences. As U.S. Secretary of State Mike Pompeo said during a trip to Mexico City in October 2018, "China has invested in ways that have left other countries worse off." Pompeo and other U.S. officials have also taken this message elsewhere in the region, cautioning against the effects of Chinese engagement on LAC governance, security, regulatory capacity, and financial stability, and in a rage of other areas. For Latin Americans, though, relations with China aren’t so black and white. China may be an imperfect partner for LAC, as many in the region will attest, but it is an increasingly important one. After nearly two decades of enhanced Chinese economic engagement with the region, LAC governments and economic sectors rely heavily on China’s economic partnership and inputs. China is LAC’s second most important trading partner, second most important source of mergers and acquisitions foreign direct investment, and top source of development finance. For South America, China’s importance is even more pronounced: It became the top export destination for South American goods in 2010. China’s effects on regional development are also mixed, as we demonstrate below. China’s contributions to the region’s economic growth are well-documented, but Chinese demand for raw materials has also accentuated regional dependence on these commodities, in a process of “re- primarization” in South American economies, with troubling implications for the region’s long-term development prospects. Chinese investments have transformed the energy sectors in some countries, but the environmental effects of hydroelectric and other projects will be long-lasting in certain cases. To achieve a wide range of development objectives—economic, environmental, and social—LAC must depend on increasingly well-planned and coordinated engagement from all of its major economic partners and donor nations, including China. This is especially true in times of growing uncertainty, as the region grapples with humanitarian and migration crises, growing populist tendencies, relentless corruption, and climate change, among other factors.
- Topic:
- Security, Corruption, Imperialism, International Cooperation, Governance, and Regulation
- Political Geography:
- United States, China, Asia, Latin America, and North America
343. China’s Recent Engagement in Latin America and the Caribbean: Current Conditions and Challenges
- Author:
- Enrique Dussel Peters
- Publication Date:
- 06-2019
- Content Type:
- Working Paper
- Institution:
- The Carter Center
- Abstract:
- Since the beginning of the 21st century, China’s presence in Latin America and the Caribbean (LAC) has been substantial in practically all socio-economic fields: cultural, bilateral and multilateral political issues, as well as trade, foreign direct investments, academic exchanges, and other areas. The main objective of this document is to analyze the effects of China’s presence in the region in terms of sustainable and long-term development, as well as its incidence in its relationship with the United States. Thus, the document will include a diagnostic to understand some of the specificities of the LAC-China socio-economic relationship, followed by the conclusion with a series of proposals. The first section of the paper will examine five issues that are relevant to understand general and specific topics about the China-LAC relationship: 1) general geostrategic and diplomatic topics to understand current tensions between the United States and China; 2) China’s proposal of a globalization process; 3) the concept of “new triangular relationships” and LAC’s challenges given increasing tensions between the United States and China; 4) particular developments and structures in trade, foreign direct investment, financing and infrastructure; and 5) the institutional framework between LAC and China. The second part of the paper focuses on a series of recommendations attempting to deepen and extend the China-LAC relationship and integrating the United States in it.
- Topic:
- International Cooperation, Bilateral Relations, Foreign Direct Investment, Culture, and Multilateral Relations
- Political Geography:
- China, Asia, Latin America, North America, and United States of America
344. The Contents of Power: Narrative and Soft Power in the Olympic Games Opening Ceremonies
- Author:
- David Leheny
- Publication Date:
- 08-2019
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper examines debates about soft power and popular culture, with particular attention to the framing and reception of the opening ceremonies at the Olympics. It examines how national narratives, particularly in the oft-noted Beijing 2008 Games and the London 2012 Games, have been analysed, turning then to a discussion of clues regarding the likely framing of the 2020 opening ceremony in Tokyo.
- Topic:
- International Cooperation, Sports, Olympics, and popular culture
- Political Geography:
- Japan, China, United Kingdom, Europe, and Asia
345. The Impact of Economic Globalisation on Firm Performance and the Labour Market: Evidence from Japan
- Author:
- Keiko Ito
- Publication Date:
- 10-2019
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper summarises the major findings and arguments in the literature on the impact of globalisation on firm performance and the labour market, focusing on the case of Japan. Internationalised firms show better performance. Although offshoring has shifted labour demand towards skilled workers, thedirect contribution of globalisation to the widening wage gap is quite limited. The empirical evidence for Japan is more or less consistent with that for other developed countries, but some observations on Japan are worth pointing out. First, several empirical studies confirm a learning-by-exporting effect. Second, there is no strong evidence that increases in imports from China have reduced domestic employment. Increases in imports from China have a positive effect on value added growth in downstream industries, implying that imports from China are likely to be complementary to domestic production in Japan.
- Topic:
- Globalization, Industrial Policy, Labor Issues, Exports, and Imports
- Political Geography:
- Japan, China, and Asia
346. Processing Trade, Trade Liberalisation, and Opening Up China's Miracle of International Trade
- Author:
- Miaojie Yu and Huihuang Zhu
- Publication Date:
- 11-2019
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Understanding the role of international trade is the key to understanding China’s miraculous economic growth. This paper reviews the literature on international trade in the context of China, with a focus on processing trade, trade liberalisation, and firmperformance to provide a better understanding of China’s experience of opening up over the past four decades.
- Topic:
- International Trade and Finance, Economic Growth, and Trade Liberalization
- Political Geography:
- China and Asia
347. Working paper on the relations between Russia and China
- Author:
- Jens Bastian
- Publication Date:
- 05-2019
- Content Type:
- Working Paper
- Institution:
- Hellenic Foundation for European and Foreign Policy (ELIAMEP)
- Abstract:
- Working paper by the independent economic analyst Jens Bastian, focusing on relations between China and Russia is published by ELIAMEP. More specifically, in the text entitled “The Embrace Between the Russian Bear and the Panda Bear: An Emerging Sino-Russian Axis” it is argued that: “The depth and momentum of Sino-Russian strategic cooperation is deepening and accelerating. Defense and security, the various bilateral energy arrangements, the synergies resulting from the combination of the Eurasian Economic Union and the Belt and Road Initiative (BRI), reflect the wider range of joint activities of the two states”.
- Topic:
- Security, Foreign Policy, Defense Policy, Bilateral Relations, and Belt and Road Initiative (BRI)
- Political Geography:
- Russia, China, and Eurasia
348. The Embrace Between a Russian Bear and the Panda Bear. An Emerging Sino-Russian Axis
- Author:
- Jens Bastian
- Publication Date:
- 06-2019
- Content Type:
- Working Paper
- Institution:
- Hellenic Foundation for European and Foreign Policy (ELIAMEP)
- Abstract:
- During a three-day official visit to Moscow in June 2019 the Chinese President Xi Jinping described Russia’s Vladimir Putin as his “best friend”. While China-US relations are deteriorating over bitter trade disputes, the imposition of tit-for-tat tariffs and intellectual property rights, the Sino-Russian partnership is evolving and deepening in areas such as security and defense, bilateral energy cooperation as well as the Kremlin’s expanding participation in China’s Belt and Road Initiative (BRI). Both Beijing and Moscow are building an alliance shaped by shared grievances and based on mutual strategic convenience. Against this background the following report argues that the strategic realignment underway between the Kremlin and Beijing is not one of equal partners. Status matters between the leadership of both countries. Moscow cannot compete with China’s sweeping investment efforts and infrastructure projects in the context of the BRI. What is increasingly emerging in this relationship is a junior role for Moscow and senior status for Beijing. The trade balance is heavily tilted in China’s favor. Chinese banks are key lenders to Russia. The energy cooperation is defined by China being able to command prices from Russia below market rates. Most importantly, China’s BRI is a multi-decade vision, spacing continents and backed up by sheer unlimited financial resources which Russia cannot even contemplate to match. With Russia and China strengthening their cooperation across policy fields, individual countries and sub-regions in continental Europe are faced with new and challenging strategic choices. As Moscow consolidates its economic footprint in Serbia and Montenegro, Beijing expands its presence across Central and Eastern Europe in the context of the 17+1 network. Policy makers are thus faced with daunting options. Some see Beijing as the more promising alternative, while others are tempted to seeking accommodation with both Russia and China.
- Topic:
- Security, International Cooperation, Bilateral Relations, Belt and Road Initiative (BRI), Trade, and Strategic Interests
- Political Geography:
- Russia, China, and United States of America
349. Examining World Bank Lending to China: Graduation or Modulation?
- Author:
- Scott Morris and Gailyn Portelance
- Publication Date:
- 01-2019
- Content Type:
- Working Paper
- Institution:
- Center for Global Development
- Abstract:
- Under the World Bank’s 2018 capital agreement, borrowing countries are expected to gradually reduce their portfolios once a base income threshold—the Graduation Discussion Income (GDI)—is reached. However, the agreement also affirms the case for ongoing lending to these countries. One justification is tied to external value beyond the borrowing country’s borders (global public goods, or GPGs). Another is tied to building capacity within the borrowing country, which can mean a focus on sub-regions where poverty remains high and capacity weak. In this paper, we examine World Bank graduation policies and lending through the lens of China, which maintains a large portfolio of World Bank projects. China currently exceeds the GDI thresholds for IBRD borrowing at the national level, while income inequality within the country leaves many noncoastal provinces below the GDI per capita threshold. Aggregate and provincial-level analysis of World Bank lending in China shows that less than half of China’s portfolio comprises activities clearly linked to GPGs, while a slight majority of projects are based in provinces with per capita income below the GDI threshold. A substantial number of World Bank projects in China focus on climate change mitigation and transportation infrastructure construction, while a smaller number relate to capacity building. Overall, we find evidence that China’s borrowing is broadly consistent with the 2018 principles of institutional capacity strengthening and GPG-related engagement, although significant areas of bank engagement do not appear to fall within the parameters of these principles.
- Topic:
- Poverty, Infrastructure, World Bank, and Inequality
- Political Geography:
- China and Asia
350. US-China Trade Tensions: Impact on Mexico | Estados Unidos-China Tensiones Comerciales: Impacto en Mexico
- Author:
- COMEXI
- Publication Date:
- 06-2019
- Content Type:
- Working Paper
- Institution:
- Mexican Council on Foreign Relations (COMEXI)
- Abstract:
- For the mid- or long-term, no country in the world—and much less Mexico—benefits from a strained environment in which there is no adherence to international trade rules. However, for the short-term, a strained trade environment produces adjustments to the supply chains, which could benefit competitors of those economies that are currently in conflict. Mexico, the second supplier of the United States only behind China, could reassert its position as a credible competitor of the Asian economy in the US. Likewise, in the context of trade friction, or even just the threat of a conflict, Mexico could strengthen its trade positioning in China by replacing part of the US offering. /// En el mediano o largo plazo, a ningún país del mundo, y menos a México, le conviene que exista un clima de tensiones donde no se respeten las reglas del comercio internacional. Ahora bien, en el corto plazo, el clima de tensiones comerciales genera ajustes en las cadenas de suministro, lo cual puede beneficiar a los competidores de las economías en conflicto. México, el segundo proveedor de Estados Unidos sólo después de China, puede reafirmar su posición como competidor creíble de la economía asiática en Estados Unidos, así como fortalecer su posición comercial en China, al sustituir parte de la oferta estadounidense, en un contexto de fricciones comerciales o su amenaza.
- Topic:
- Foreign Policy, Economy, Economic Growth, Trade Wars, Exports, and Trade
- Political Geography:
- China, Mexico, and United States of America
351. The Limits (And Human Costs) of Population Policy: Fertility Decline and Sex Selection in China under Mao
- Author:
- Kimberly Singer Babiarz, Paul Ma, Grant Miller, and Shige Song
- Publication Date:
- 03-2019
- Content Type:
- Working Paper
- Institution:
- Center for Global Development
- Abstract:
- Most of China’s fertility decline predates the famous One Child Policy—and instead occurred under its predecessor, the Later, Longer, Fewer (LLF) policy. Studying LLF’s contribution to fertility and sex selection behavior, we find that it i) reduced China’s total fertility rate by 0.9 births per woman (explaining 28% of China’s modern fertility decline), ii) doubled the use of male-biased fertility stopping rules, and iii) promoted postnatal neglect (implying 210,000 previously unrecognized missing girls). Considering Chinese population policy to be extreme in global experience, our paper demonstrates the limits of population policy—and its potential human costs.
- Topic:
- Population, Sexuality, and Fertility
- Political Geography:
- China and Asia
352. Strategic autonomy for European choices: The key to Europe's shaping power
- Author:
- Giovanni Grevi
- Publication Date:
- 07-2019
- Content Type:
- Working Paper
- Institution:
- European Policy Centre (EPC)
- Abstract:
- Multi-level competition is on the rise in the international system and the standoff between the US and China risks becoming a defining feature of international affairs. However, the future is not predestined: the European Union (EU) will play a major role in the development of the international order, whether through its absence or its engagement. This Discussion Paper follows recent European Policy Centre publications and debates dedicated to revamping Europe’s approach to an increasingly challenging international context, which have delivered recommendations to: equip Europe with the tools to govern interdependence and mitigate confrontation; take a strong stance in defence of Europe while not endorsing a zero-sum interpretation of global affairs; turn the EU into a global shaping power by pursuing a ‘rules-first’ strategy; and frame Europe’s strategic autonomy in comprehensive terms, including the economic, technological and security and defence dimensions.
- Topic:
- Foreign Policy, International Affairs, European Union, and Strategic Autonomy
- Political Geography:
- China, Europe, and United States of America
353. The Kunming-Vientiane Railway: The Economic, Procurement, Labor, and Safeguards Dimensions of a Chinese Belt and Road Project
- Author:
- Scott Morris
- Publication Date:
- 05-2019
- Content Type:
- Working Paper
- Institution:
- Center for Global Development
- Abstract:
- The Kunming-Vientiane (K-V) railway, part of the Kunming-Singapore multi-country rail network (or “Pan-Asia Railway”), is an anchor investment of the Chinese government’s Belt and Road initiative (BRI). This case study will assess the rail project along four dimensions: economic implications; procurement arrangements; labor; and environmental and social safeguards. In each of these areas, evidence from the railway project suggests that Chinese policy and practice could be better aligned with the practices of other sources of multilateral and bilateral development finance. Where the project’s standards are broadly aligned, at least in principle, there is nonetheless reason to believe that China’s approach carries heightened risks given the overall scale of financing. These risks hold for China’s global program of official finance, which has made the country the largest source of official credit in the world. In this regard, BRI policymakers should consider a more rigorous set of “best practices” that align Chinese official finance with leading multilateral standards, even if these practices don’t currently characterize many other bilateral lenders. Such an approach would be consistent with the multilateral vision for BRI espoused by Chinese officials and reflected in the framework of the annual Belt and Road Forum for International Cooperation. This study considers what a stronger set of standards would look like in the context of the four areas of focus.
- Topic:
- Infrastructure, Belt and Road Initiative (BRI), Transportation, and Railways
- Political Geography:
- China and Asia
354. Healing One-fifth of Humanity: Progress and Challenges for China’s Health System
- Author:
- Karen Eggleston
- Publication Date:
- 10-2019
- Content Type:
- Working Paper
- Institution:
- Walter H. Shorenstein Asia-Pacific Research Center
- Abstract:
- China’s national health reforms over the past two decades have brought the system closer to the modern, safe, reliable and accessible health system that is commensurate with China’s dramatic economic growth, improvement in living standards, and high hopes for the next generation. Celebrating a decade this year, China’s national health reforms of 2009 consolidated a system of social health insurance covering the entire population for basic health services, contributing to a surge in healthcare utilization while reducing out-of-pocket costs to patients – which declined from 56% to 28% of total health expenditures between 2003 and 2017. An expanded basic public health service package, funded by per capita government budget allocations that include a higher central government subsidy for lower income provinces, provides basic population health services to all Chinese. A higher percentage of Chinese accessed hospital admissions in 2017 than in the average high-income (OECD) country – a large increase from the turn of the 21st century.i A recent re-shuffle of the governance structure consolidates the purchaser role for social health insurance schemes under the newly created National Healthcare Security Administration, with most other health sector functions under the re-christened National Health Commission, among other changes. China’s world-leading technological prowess in multiple fields spanning digital commerce to artificial intelligence—and accompanying innovative business models such as WeDoctor that have not yet been fully integrated into the health system—hold promise for supporting higher quality and more convenient healthcare for China’s 1.4 billion.
- Topic:
- Health, Science and Technology, Governance, and Health Care Policy
- Political Geography:
- China and Asia
355. The Impact of Intranational Trade Barriers on Exports: Evidence from a Nationwide VAT Rebate Reform in China
- Author:
- Jie Bai and Jiahua Liu
- Publication Date:
- 12-2019
- Content Type:
- Working Paper
- Institution:
- The John F. Kennedy School of Government at Harvard University
- Abstract:
- It is well known that various forms of non-tariff trade barriers exist within a country. Empirically, it is difficult to measure these barriers as they can take many forms. We take advantage of a nationwide VAT rebate policy reform in China as a natural experiment to identify the existence of these intranational barriers due to local protectionism and study the impact on exports and exporting firms. As a result of shifting tax rebate burden, the reform leads to a greater incentive of the provincial governments to block the domestic flow of non-local goods to local export intermediaries. We develop an open-economy heterogenous firm model that incorporates multiple domestic regions and multiple exporting technologies, including the intermediary sector. Consistent with the model’s predictions, we find that rising local protectionism leads to a reduction in interprovincial trade, more “inward-looking” sourcing behavior of local intermediaries, and a reduction in manufacturing exports. Analysis using micro firm-level data further shows that private companies with greater baseline reliance on export intermediaries are more adversely affected.
- Topic:
- International Trade and Finance, Political Economy, Reform, and Tariffs
- Political Geography:
- China and Asia
356. Quid Pro Quo, Knowledge Spillover and Industrial Upgrading
- Author:
- Jie Bai, Panle Barwick, Shengmao Cao, and Shanjun Li
- Publication Date:
- 11-2019
- Content Type:
- Working Paper
- Institution:
- The John F. Kennedy School of Government at Harvard University
- Abstract:
- Are quid pro quo (technology for market access) policies effective in facilitating knowledge spillover to developing countries? We study this question in the context of the Chinese automobile industry where foreign firms are required to set up joint ventures with domestic firms in return for market access. Using a unique dataset of detailed quality measures along multiple dimensions of vehicle performance, we document empirical patterns consistent with knowledge spillovers through both ownership affiliation and geographical proximity: joint ventures and Chinese domestic firms with ownership or location linkage tend to specialize in similar quality dimensions. The identification primarily relies on within-product variation across quality dimensions and the results are robust to a variety of specifications. The pattern is not driven by endogenous joint-venture network formation, overlapping customer base, or learning by doing considerations. Leveraging additional micro datasets on part suppliers and worker flow, we document that supplier network and labor mobility are important channels in mediating knowledge spillovers. However, these channels are not tied to ownership affiliations. Finally, we calibrate a simple learning model and conduct policy counterfactuals to examine the role of quid pro quo. Our findings show that ownership affiliation facilitates learning but quality improvement is primarily driven by the other mechanisms.
- Topic:
- International Trade and Finance, Science and Technology, and Developing World
- Political Geography:
- China and Asia
357. Collective Reputation in Trade: Evidence from the Chinese Dairy Industry
- Author:
- Jie Bai, Ludovica Gazze, and Yukun Wang
- Publication Date:
- 10-2019
- Content Type:
- Working Paper
- Institution:
- The John F. Kennedy School of Government at Harvard University
- Abstract:
- Collective reputation implies an important externality. Among firms trading internationally, quality shocks about one firm’s products could affect the demand of other firms from the same origin country. We study this issue in the context of a large-scale scandal that affected the Chinese dairy industry in 2008. Leveraging rich firm-product level administrative data and official quality inspection reports, we find that the export revenue of contaminated firms dropped by 84% after the scandal, relative to the national industrial trend, and the spillover effect on non-contaminated firms is measured at 64% of the direct effect. Notably, firms deemed innocent by government inspections did not fare any better than noninspected firms. These findings highlight the importance of collective reputation in international trade and the challenges governments might face in signaling quality and restoring trust. Finally, we investigate potential mechanisms that could mediate the strength of the reputation spillover. We find that the spillover effects are smaller in destinations where people have better information about parties involved in the scandal. New firms are more vulnerable to the collective reputation damage than established firms. Supply chain structure matters especially in settings where firms are less vertically integrated and exhibit fragmented upstream-downstream relationships.
- Topic:
- International Trade and Finance, Markets, Business, Global Political Economy, and Accountability
- Political Geography:
- China and Asia
358. From the EMS to the EMU and...to China
- Author:
- Joseph Halevi
- Publication Date:
- 11-2019
- Content Type:
- Working Paper
- Institution:
- Institute for New Economic Thinking (INET)
- Abstract:
- The paper highlights the position of German authorities, showing that they were quite lucid about the fundamental weaknesses inherent in a process that separated monetary from fiscal policies by giving priority to the centralization of the former. Instead of repeating the well known critiques levelled against the EMU – for which readers are referred to the unsurpassed treatment by Stiglitz, the essay highlights the splintering of Europe in the way in which it has unfolded during the 1990s and in the first decade of the present millennium. In particular the early economic and political origins of the terminal crisis of Italy are located between the late 1980s and the 1990s. France is shown to belong increasingly to the so-called European periphery by virtue of a weakening industrial structure and persistent balance of payments deficits. The paper argues that France regains its central role by political means and through its weight as an active nuclear military power centered on maintaining its imperial interests and posture especially in Africa. The first decade of the present millennium is portrayed as the period in which a distinct German economic area had been formed in the midst of Europe with a strong drive to the east with an increasingly powerful gravitational pull towards the People’s Republic of China.
- Topic:
- Economics, International Political Economy, Political Economy, History, and Macroeconomics
- Political Geography:
- Africa, China, Europe, Asia, Germany, and Global Focus
359. China and the World Bank: How Contrasting Development Approaches affect the Stability of African States
- Author:
- Kai Gehring, Lennart C. Kaplan, and Melvin H.L. Wong
- Publication Date:
- 10-2019
- Content Type:
- Working Paper
- Institution:
- Empirical Studies of Conflict Project (ESOC)
- Abstract:
- China’s development model challenges the approaches of traditional Western donors like the World Bank. We argue that both aim at stability, but differ in the norms propagated to achieve that. Using fixed effects and IV estimations, we analyze a broad range of subnational stability measures in Africa. Aid by both the WB and China does not increase outright conflict nor any type of citizen protest, on average. Both even reduce outright conflict by governments against civilians. Still, Chinese aid is associated with more government repression and an increased acceptance of authoritarian norms, while WB projects strengthen democratic values.
- Topic:
- Development, International Political Economy, Political Economy, World Bank, and Developing World
- Political Geography:
- Africa and China
360. Determinants of Developing Countries' Export Upgrading: The Role of China and Productive Investment
- Author:
- Dic Lo and Yue Teng
- Publication Date:
- 09-2019
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- This paper explores the determinants of developing countries' export upgrading measured by export sophistication. In particular, as a response to the recent debate on China's impact on developing countries' industrialisation, we examine a new hypothesis that the considerable growth in developing countries' trade with China may serve as a source of productive investment for their export upgrading. Dynamic panel estimations based on HS 6-digit export data on 62 developing countries during 1995-2014 show the positive effects of human capital, productive investment, and absolute gains from trade with China measured by income terms of trade vis-à-vis China. Mediation analysis finds that the positive effect of trade with China on export upgrading takes effect largely through its enhancing effect on productive investment, which supports our hypothesis. By contrast, China's direct export-downgrading impact is minor. Our findings suggest that, for developing countries, China serves more as a stimulator of capital accumulation for industrial development than a competitor in manufacturing market or a predator of natural resources. This provides an alternative to the widespread argument of China's crowding-out and re- primarisation impact on developing countries. The priority for developing countries is therefore the appropriate use of the gains from trade for productive purposes.
- Topic:
- Development, International Trade and Finance, Hegemony, Investment, Exports, and Foreign Interference
- Political Geography:
- China and Asia