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422. Can a Chinese-Iranian Deal be Averted?
- Author:
- Eran Lerman
- Publication Date:
- 10-2019
- Content Type:
- Working Paper
- Institution:
- Jerusalem Institute for Strategy and Security (JISS)
- Abstract:
- Chinese investment in Iran would help Tehran withstand US economic pressures, and exacerbate the Western crisis with Iran
- Topic:
- International Cooperation, Investment, Economic Diplomacy, and Foreign Interference
- Political Geography:
- China, Iran, Middle East, Israel, Asia, North America, and United States of America
423. China’s Pursuit of Semiconductor Independence
- Author:
- James Andrew Lewis
- Publication Date:
- 02-2019
- Content Type:
- Working Paper
- Institution:
- Center for Strategic and International Studies
- Abstract:
- While China has made immense investments in science and technology, and while these are producing results, it is still dependent on Western technology. This is particularly true for semiconductors. China’s dependence on foreign semiconductors has worried Beijing for decades. China suspects that Western semiconductors contain “backdoors,” intentional vulnerabilities that can be exploited for intelligence and military purposes. In 2016, President Xi Jinping said, “the fact that core technology is controlled by others is our greatest hidden danger.” Vice Premier Ma Kai said at the 2018 National People’s Congress, “We cannot be reliant on foreign chips.”1 China intends to end this dependence, but despite 40 years of investment and espionage, it is unable to make advanced semiconductors. Along the way, there have been embarrassing frauds and expensive failures.
- Topic:
- Science and Technology, Hegemony, Investment, and Emerging Technology
- Political Geography:
- China and Asia
424. Innocent Bystanders
- Author:
- Judd Devermont and Catherine Chiang
- Publication Date:
- 04-2019
- Content Type:
- Working Paper
- Institution:
- Center for Strategic and International Studies
- Abstract:
- Speaking at the United Nations General Assembly, President Nana Akufo-Addo of Ghana warned of the repercussions of escalating U.S.-China trade tensions on African nations. Although largely absent from the discourse surrounding the so-called “trade war,” sub-Saharan Africa has suffered from its impacts. Uncertainty hovering over global and African markets has already undermined investor confidence, triggering drops in commodity prices and local currencies. A slowdown in Chinese production and global growth could threaten to throw African markets further off balance. U.S. protectionist measures stand out for their repercussions on African economies and U.S.-Africa relations. Tariff tensions risk indirectly undercutting U.S. goals of promoting African self-reliance, increasing U.S.-Africa trade and investment, and countering China’s expanding influence on the continent.
- Topic:
- Development, Hegemony, Conflict, and Trade Wars
- Political Geography:
- Africa, China, Asia, North America, and United States of America
425. China should address downward pressure in 2018
- Author:
- Qiyuan Xu
- Publication Date:
- 01-2018
- Content Type:
- Working Paper
- Abstract:
- In 2017, the Chinese economy rebounded more significantly than expected. There is now general anticipation that growth in 2018 will fall slightly compared with that of 2017, but that it will remain stable at 6.5 percent or above. However, there are some factors that could lead to downward pressure on investment and consumption in 2018
- Topic:
- International Political Economy and International Affairs
- Political Geography:
- China
426. From Deng to Xi: Economic Reform, the Silk Road, and the Return of the Middle Kingdom
- Author:
- LSE Ideas
- Publication Date:
- 01-2018
- Content Type:
- Working Paper
- Institution:
- LSE IDEAS
- Abstract:
- This LSE IDEAS Special Report - with senior contributors from politics, journalism, and academia - looks at the internal causes and consequences of the return of the 'Middle Kingdom'. It explores the extent to which Deng's momentous economic reforms in 1978 have shaped modern China, what the country's expanded international role under Xi means, and who really makes Chinese foreign policy.
- Topic:
- International Affairs and Global Political Economy
- Political Geography:
- China
427. The Rise of China and the Rebound in Korea’s Manufacturing Employment
- Author:
- Kyong Hyun Koo and Unjung Whang
- Publication Date:
- 12-2018
- Content Type:
- Working Paper
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- Over the last three decades, the world has experienced a substantial in-crease in Chinese import penetration due to the rapid improvement in Chi-na’s supply productivity, which is often called the “China shock” or “China syndrome.” The existing literature have shown that the increase in imports from China due to the China shock adversely affected the manufacturing employment of a number of advanced countries such as the U.S., Norway, Denmark, and Spain. Unlike those advanced countries, South Korea has shown a pronounced increase in exports to China as well as imports from China since the 1990s. Over the same time, furthermore, Korea’s manufactur-ing employment has shown a stagnated downward trend compared to other advanced economies and even rebounded since the mid-2000s. Given these motivations, this study investigates both import and export channels to ex-plore how the China trade shocks affected the exceptional trend in Korea’s manufacturing employment from 1993 through 2015. To capture the overall employment effects of the China shocks, specifically, we consider not only how a Korean manufacturing industry employment is affected by the change in its direct exposure to China trade shocks (direct effects), but also how other industries’ changes in exposure to China trade shocks affect the industry through domestic industrial linkages (indirect ef-fects), largely following the empirical approach employed by Acemoglu et al. (2016). Mainly using firm-level data for almost all Korean manufacturing firms with more than four employees and the 2SLS estimation method, we find that during the period 1993-2015 the increase in Chinese import expo-sure had statistically insignificant direct effects on Korea’s manufacturing em-ployment on average, while 1% point increase in Chinese export exposure directly caused 0.18% increase in employment across Korean manufacturing industries. For the indirect effects of China shocks, in contrast, 1% point in-crease in Chinese import exposures of downstream industries (intermediate goods buyers) led to 3.00% decrease in employment of upstream industries (intermediate goods sellers) on average, while 1% point increase in Chinese export exposures of downstream industries brought 1.70% increase in em-ployment of upstream industries on average. The relatively moderate direct effects compared to the indirect ones are partly explained by two factors: First, Korea has gone through a substantial change in the structure of its trade with China since 2000s, so that within-industry supply chains between China and Korea have become more intertwined for some industries. Second, the Korean industries whose main downstream industries were substantially exposed to the Chinese imports (exports) tended to have a relatively low di-rect Chinese import (export) exposure during the period 1993-2015. Based on the 2SLS estimates above, the increased Chinese import expo-sure turns out to have decreased Korea manufacturing employment by 1,210,000 during the period 1993-2015, mainly through the indirect channel. In contrast, the increased Chinese export exposure appears to have increased Korea manufacturing employment by 1,090,000 during the same period, through the direct channel (210,000) and indirect channel (880,000). In the case of Korea’s manufacturing industry, therefore, most of the job reduction attributable to the China shocks has been also offset by job creation caused by the China shocks. Such a considerable increase in manufacturing jobs due to the rise of China, which has not been reported yet in other advanced economies, appear to have played an important role in generating the re-bounding trend in Korea’s manufacturing employment.
- Topic:
- Globalization, Labor Issues, Economic Policy, and Trade Shocks
- Political Geography:
- China, Asia, and South Korea
428. A Quantitative Trade Model with Unemployment
- Author:
- Kyu Yub Lee
- Publication Date:
- 10-2018
- Content Type:
- Working Paper
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- Over the last decade, quantifying the welfare effects from tariff changes has become one of the main challenges among international trade economists. There are a number of quantitative trade models with micro-foundations which emphasize demand-side (Anderson and Van Wincoop 2003), supply-side (Eaton and Kortum 2002), Bertrand competition (Bernard et al. 2003), extensive and intensive margin (Chaney 2008), etc, and conclude that trade liberalization with tariff reductions leads an economy to reach a higher level of welfare compared to pre-liberalization (Costinot and Rodriguez-Clare 2014). While elegant, these models inducing gravity equations share the common assumption, a perfect labor market. Quantitative trade models with full-employment developed so far have not taken account of labor market frictions when evaluating the welfare effects from tariff changes. This paper aims to fill the gap in the trade literature by explicitly considering labor market frictions. I employ search-and-matching to a multi-country and multi-sector Ricardian model with input-output linkages, trade in intermediate goods, and sectoral heterogeneity, in order to quantify the welfare effects from tariff changes. The paper shows that labor market frictions can be a source of comparative advantage in the sense that better labor market conditions contribute to lower cost in production. Labor market frictions play a critical role in determining the probability of exporting goods to trading partners, and interact with bilateral trade share, price, expenditures, etc. Unemployment and changes in unemployment rates due to tariff reductions contribute welfare changes across countries, implying that welfare effects based on quantitative trade models with full-employment are likely to be biased. I confirm the biased welfare effects by revisiting Caliendo and Parro (2015), who conduct an analysis of the welfare effects from the NAFTA from 1993 to 2005. I show that the welfare gap between theirs and mine has a positive correlation with changes in observed unemployment rates across countries. With the constructed model, I further conduct counterfactual exercises by asking what would happen if China’s tariffs remain unchanged from 2006 to 2015. It turns out that there are mild welfare effects to trading partners in the world trading system.
- Topic:
- Tariffs, Economic Policy, Trade, Unemployment, and Welfare
- Political Geography:
- China and Asia
429. Trade Policy Options for ASEAN Countries and Their Regional Dialogue Partners: “Preference Ordering” Using CGE Analysis
- Author:
- Pradumna B. Rana, Xianbai Ji, Wai-Mun Chia, and Chang Tai Li
- Publication Date:
- 03-2018
- Content Type:
- Working Paper
- Institution:
- Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
- Abstract:
- The withdrawal of the United States from the Trans-Pacific Partnership (TPP) and Trump’s “America First” agenda have ignited a second round of interest in mega-free trade agreements in the Asia Pacific region. Countries have been motivated to explore alternative trade policy options. Using national real gross domestic output gains estimated by the GTAP model to construct “preference ordering” for 10 Association of Southeast Asian Nations (ASEAN) members and their six regional dialogue partners, this paper comes up with several findings. First, when multilateral agreements are not possible, countries are better off with a narrower regional trading agreement than without one. Second, in the region, Regional Comprehensive Economic Partnership (RCEP) has higher beneficial impacts than the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Third, for dual-track countries, that is countries that are negotiating both the CPTPP and the RCEP, implementing both agreements is better than each separately. Fourth, as expected, economic impacts of the CPPTP are lower than those of the original TPP12, but all CPPTP members will benefit although to different degrees. Fifth, economic impacts of open regionalism are higher than those of a closed and reciprocal one. Going forward, the paper argues that ASEAN countries and their regional dialogue partners need to adopt a “multi-track, multi- stage” approach to trade policy.
- Topic:
- Regional Cooperation, Trans-Pacific Partnership, Free Trade, and Economic Cooperation
- Political Geography:
- United States, China, Asia, and Asia-Pacific
430. Indonesian Muslims in a Globalising World: Westernisation, Arabisation and Indigenising Responses
- Author:
- Martin van Bruinessen
- Publication Date:
- 05-2018
- Content Type:
- Working Paper
- Institution:
- Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
- Abstract:
- In the two decades since the fall of the Suharto regime, one of the most conspicuous developments has been the rapidly increasing influence of religious interpretations and practices emanating from the Middle East and more specifically the Gulf states, leading observers to speak of the “Arabisation” of Indonesian Islam. In the preceding decades, the state had strongly endorsed liberal and development-oriented Muslim discourses widely perceived as “Westernised” and associated with secularism and Western education. Indonesia’s unique Muslim traditions have in fact been shaped by many centuries of global flows of people and ideas, connecting the region not just with the Arab heartlands of Islam and Europe but South Asia and China. What is relatively new, however, is the presence of transnational Islamist and fundamentalist movements, which weakened the established nation-wide Muslim organisations (Muhammadiyah, NU) that had been providing religious guidance for most of the 20th century. The perceived threat of transnational radical Islam has led to renewed reflection on, and efforts to rejuvenate, indigenous Muslim traditions.
- Topic:
- Islam, Religion, transnationalism, and Secularism
- Political Geography:
- United States, China, Indonesia, Asia, and Southeast Asia