Political Geography: China / Publication Year: within 10 Years / Topic: International Trade and Finance

1. The NewSpace market: Capital, control, and commercialization

Author:: Robert Murray
Publication Date:: 04-2023
Content Type:: Working Paper
Institution:: Atlantic Council
Abstract:: Commercial opportunities in space-based technologies are expanding rapidly. From satellite communications and Earth observation to space tourism and asteroid mining, the potential for businesses to capitalize on these emerging technologies is vast and known as “NewSpace.”1 The NewSpace model is important for governments to understand because the dual-use nature of space, specifically its growing commercialization, will influence the types of space-based technologies that nations may leverage, and consequently, impact their national security paradigms. By capitalizing on the private sector’s agility and combining it with the essential research efforts and customer role played by the public sector, the NewSpace industry can play a critical function in addressing current and future national security challenges through public-private codevelopment. As the NewSpace industry expands, the role of government is evolving from being the primary developer and operator of space assets to facilitating their commercialization, while still prioritizing key advancements. US and allied governments can capitalize on this competitive landscape by strategically investing in areas that align with their national security objectives. However, it is crucial for them to first understand and adapt to their changing roles within this dynamic environment. Indeed, the benefits of the burgeoning NewSpace industry extend beyond the United States. International collaboration and competition in this area can lead to faster technological advancements and economic gains. The global NewSpace landscape is driving down costs, increasing access to space, and fostering innovation that can improve not only economic well-being, but also impact national security models. To that end, this memo will examine the broad state of the space market, discuss the industry drivers, and propose recommendations for US and allied policymakers as they consider future government investments in those enabling space-based activities that support wider national security ambitions.
Topic:: Defense Policy, International Trade and Finance, National Security, Science and Technology, European Union, Space, and Defense Industry
Political Geography:: Russia, China, Eurasia, Canada, Asia, and United States of America

2. Impact of economic sanctions on net commodity-producing and net commodity-consuming countries

Author:: Sergio R. Vale and Eduardo Viola
Publication Date:: 01-2023
Content Type:: Journal Article
Journal:: Revista Brasileira de Política Internacional (RBPI)
Institution:: Instituto Brasileiro de Relações Internacionais (IBRI)
Abstract:: The war in Ukraine has had a marked economic impact. However, since Russia is a net producer of important commodities, the impact of sanctions on its economy was less than expected. But what would happen if there was a war involving a country that was a net importer of commodities? In the case of a possible China-US conflict over Taiwan, the impact on the world economy would be different, with a deeper recession around the world, but the impact on the Brazilian economy would still be positive on account of the possibility that would remain of agricultural exports to China.
Topic:: Agriculture, Economics, International Trade and Finance, Sanctions, Commodities, and Exports
Political Geography:: Russia, China, Europe, Ukraine, Taiwan, Asia, North America, and United States of America

3. Trade Balances and International Competitiveness in Cyber-physical, Digital Task-intensive, ICT Capital-intensive and Traditional Industries

Author:: Alexandra Bykova and Roman Stöllinger
Publication Date:: 05-2023
Content Type:: Special Report
Institution:: The Vienna Institute for International Economic Studies (WIIW)
Abstract:: In this report, we analyse the international competitiveness of the EU in four industry groups over the period 1995-2018. The groups are delineated by specific factor intensities, where these intensities are assessed from digital tasks performed by labour services and ICT capital stocks. The EU’s positions relating to trade balances, revealed comparative advantages and unit value ratios are assessed relative to its main competitors, such as the US, China, Japan and South Korea. The trade specialisation patterns confirm EU advantages in traditional industries, which still represent the largest part of global trade, and in the group of digital task-intensive industries. In the cyber-physical group of industries, which are characterised by both high digital task and ICT capital intensities, the EU records a trade deficit, although this has been receding in recent years. Competitiveness indicators depict heterogeneity among EU countries. The loss of international competitiveness for some technology front-runners is a worrying sign. On the positive side, however, a reduction in trade deficits or an improvement in product quality and market shares is evident for certain EU countries, especially in the Central European region.
Topic:: International Trade and Finance, European Union, Trade, Digitalization, and International Competition
Political Geography:: Japan, China, Europe, Asia, South Korea, and United States of America

4. China as an International Lender of Last Resort

Author:: Sebastian Horn, Bradley C. Parks, Carmen M. Reinhart, and Christoph Trebesch
Publication Date:: 03-2023
Content Type:: Working Paper
Institution:: Kiel Institute for the World Economy (IfW)
Abstract:: This paper shows that China has launched a new global system for cross-border rescue lending to countries in debt distress. We build the first comprehensive dataset on China’s overseas bailouts between 2000 and 2021 and provide new insights into China’s growing role in the global financial system. A key finding is that the global swap line network put in place by the People’s Bank of China is increasingly used as a financial rescue mechanism, with more than USD 170 billion in liquidity support extended to crisis countries, including repeated rollovers of swaps coming due. The swaps bolster gross reserves and are mostly drawn by distressed countries with low liquidity ratios. In addition, we show that Chinese state-owned banks and enterprises have given out an additional USD 70 billion in rescue loans for balance of payments support. Taken together, China’s overseas bailouts correspond to more than 20 percent of total IMF lending over the past decade and bailout amounts are growing fast. However, China’s rescue loans differ from those of established international lenders of last resort in that they (i) are opaque, (ii) carry relatively high interest rates, and (iii) are almost exclusively targeted to debtors of China's Belt and Road Initiative. These findings have implications for the international financial and monetary architecture, which is becoming more multipolar, less institutionalized, and less transparent.
Topic:: Debt, Emerging Markets, International Trade and Finance, Financial Crisis, Belt and Road Initiative (BRI), and Sovereign Debt
Political Geography:: Africa, China, and Asia

5. Rewriting the Future of America’s Maritime Industry to Compete with China

Author:: Michael Roberts
Publication Date:: 10-2023
Content Type:: Special Report
Institution:: Hudson Institute
Abstract:: For decades, companies outside the United States have dominated the international commercial shipping and shipbuilding industries. At various times since World War II, Japan, Korea, and certain European countries have been able to leverage their export-driven manufacturing economies and government support to become world leaders in commercial shipbuilding and major players in international shipping. The People’s Republic of China (PRC) has taken that strategy to a new level and now produces more than half the large commercial ships delivered annually, controls scores of seaports in dozens of foreign countries, and owns almost one-fifth of the global commercial fleet. American commercial shipbuilders and US flag shipping companies have long faced fierce headwinds in international markets and have seen support from the US government dwindle. The US reset its maritime policies in the 1990s when America was the sole superpower and the security benefits of a robust commercial maritime industry were in doubt. By the end of 2022, Americans owned only 3 percent of the 55,000 ships in the global commercial fleet, including just 178 large US flag cargo ships, 85 of which are committed to international trade (see tables 1 and 2 below for a breakdown of US and global commercial fleets). The emergence of the PRC as a challenger to America’s global leadership has forced sweeping changes in US policy and spending priorities to boost America’s economic and military security. This report recommends that the US reform its policies governing America’s commercial maritime industries because shipping and shipbuilding are core components of national power. These industries remain especially crucial in the twenty-first century, as international trade is more important to a healthy American economy today than ever before. Yet Americans have almost no control over the maritime logistics systems that feed the US economy. The pandemic-induced supply chain crisis showed how much damage can be done when those systems break down.
Topic:: International Trade and Finance, National Security, Maritime, Industry, Domestic Policy, and Supply Chains
Political Geography:: China, Asia, North America, and United States of America

6. The power of control: How the EU can shape the new era of strategic export restrictions

Author:: Tobias Gehrke and Julian Ringhof
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: European Council on Foreign Relations (ECFR)
Abstract:: Technology is increasingly a battleground in the strategic competition between the US and China. Western technology contributes to China’s military modernisation as well as the development of Russian weapon systems. The US is restricting trade in key technologies with China and pushing EU member states to follow its lead. To better defend its interests, the EU needs to develop clearer policies on China and security, including pursuing the ‘de-risking’ of its relations with Beijing. The EU must develop a new strategic technology doctrine and upgrade its export control policy. This more coherent stance will enable the EU both to act where necessary but also to defend itself and its member states from future pressure from China – and the US.
Topic:: Security, International Trade and Finance, European Union, and Exports
Political Geography:: China, Europe, and United States of America

7. China/United States: Europe off Balance

Author:: Thomas Gomart and Marc Hecker
Publication Date:: 04-2023
Content Type:: Special Report
Institution:: Institut français des relations internationales (IFRI)
Abstract:: As French President Emmanuel Macron (accompanied by Ursula von der Leyen) is on a state visit to China, some twenty Ifri researchers decipher the stakes of the U.S./China/Europe strategic triangle. This 16-text study follows Olaf Scholz’s visit to Beijing (November 2022) and precedes that of Emmanuel Macron (April 2023). It comes especially one year after the beginning of a geopolitical and geoeconomic shock of a rare magnitude: the invasion of Ukraine by Russia. The War in Ukraine or the Return of Bloc Geopolitics? The war in Ukraine has broken ties between the European Union (EU) and Russia for the foreseeable future, particularly in the field of energy, though not without consequences in the Middle East, Africa, and the Indo-Pacific. Furthermore, this war has become the main show of active indirect confrontation between the United States—which has provided military support to Ukrainians, with help from its European allies—and China, which has supported Russia politically and economically. In February 2022, Moscow and Beijing declared their “no limits friendship”; in March 2023, Xi Jinping offered his personal support to Vladimir Putin after the International Criminal Court issued a warrant for his arrest. In its position on the political settlement of the Ukraine crisis, presented in February 2023, China stated: “All parties should oppose the pursuit of one’s own security at the cost of others’ security, prevent bloc confrontation, and work together for peace and stability on the Eurasian Continent”. China is no more of a mediator than the United States: it would be unrealistic to believe so. We appear to be witnessing a return of bloc geopolitics, albeit in a starkly different context than that of the Cold War (1947-1991). Globalization has produced strong economic and technological interdependencies that make any prospect of decoupling very costly, if not impossible. Economic partners are no longer necessarily military allies, and vice versa. In other words, a gap is opening up between geopolitical perceptions and geoeconomic realities. The term “decoupling” is popular in the United States, though much less so elsewhere. The rejection of bloc geopolitics is particularly acute outside of the West, where a “pragmatic” approach to foreign policy is often promoted. The Saudi foreign minister summed this up during the World Policy Conference in December 2022: “Polarization is the last thing we need right now. […] We need to build bridges, strengthen connections, and find areas of cooperation”. A few months later, China pulled off an extraordinary diplomatic coup by brokering a deal to restore relations between Riyadh and Tehran. For the EU, the situation is particularly delicate: Europe is in the Western camp, but a severing of ties with Beijing would cause a crushing economic blow. In 2022, China accounted for more than 20% of the EU’s imports, while the United States accounted for around 12%. By 2030, the EU’s GDP is expected to rise to $20.5 trillion, compared to $30.5 trillion for the United States and $33.7 trillion for China. In January 2023, the President of the European Commission declared at Davos: “We still need to work and trade with China, especially when it comes to this transition. So, we need to refocus our approach on de-risking, rather than decoupling”. For its part, Beijing has encouraged European aspirations of “strategic autonomy”, understood in China as a form of detachment from the United States. At the same time, the EU is constantly strengthening its military, technological, financial and energy ties with the U.S. This collective study notes a hypothetical search for balance on the part of the Europeans, faced with a war on their territory (the Western peninsula of the heartland), who cannot escape Sino-American mechanisms, and who do not form a monolithic whole. It also analyzes the strategy of several important actors outside our continent, and shows that, from Ukraine to Taiwan, via Africa and the Middle East, Europeans have little room for maneuver. This is why the study proposes recommendations to try, at a crucial moment, to reinforce their positioning.
Topic:: Foreign Policy, Climate Change, International Trade and Finance, Science and Technology, European Union, and Industry
Political Geography:: China, Europe, and United States of America

8. Digitalization of Special Economic Zones in China

Author:: Jie (Jeanne) Huang
Publication Date:: 01-2022
Content Type:: Working Paper
Institution:: China Studies Centre, The University of Sydney
Abstract:: Special Economic Zones (SEZ) have become the forefront in China to test legal and technological reforms for digital trade. This chapter explores three cutting-edge case studies in China’s SEZs: the Beijing blockchain-based Single Window deposit box; newly established big data exchanges in Beijing, Tianjin, and Shanghai SEZs; and pilot projects in financial, medical care and automobile industries to flow data across the border in the Shanghai SEZ. It scrutinizes China's experiments in the context of its applications to join CPTPP and DEPA. It argues that the development of Chinese domestic law for digital trade is shifting away from the traditional paradigm that uses international commitments to push domestic reform or make domestic law according to international law. The development of Chinese domestic law for digital trade relies much more on China’s domestic needs than what FTAs negotiations require. FTAs are increasingly becoming a tool for China to shape international law rather than a benchmark for legislating domestic Chinese law.
Topic:: Development, Economics, International Trade and Finance, Hegemony, and Digitalization
Political Geography:: China and Asia

9. China's CPTPP bid spurs South Korea to act on Asia-Pacific trade pacts

Author:: Jeffrey J. Schott
Publication Date:: 06-2022
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: China’s sudden application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in September 2021 has broad implications for South Korea’s economic relations with China, Japan, and the United States. In the past, Korea frequently debated but invariably postponed deciding whether to participate in negotiations on the CPTPP, despite the substantial benefits to be gained from doing so. However, China’s application has prompted Korean officials to get off the fence and apply as well. As China moves to deepen its ties to regional partners, Korea needs to follow suit, complementing the ongoing implementation of the Regional Comprehensive Economic Partnership (RCEP) with expedited negotiations to join the CPTPP and participation in the US-led Indo-Pacific Economic Framework for Prosperity (IPEF). Korean participation in the RCEP, CPTPP, and IPEF is desirable and mutually reinforcing and should allow Korea to sustain its strong commercial interests in both the US and Chinese markets.
Topic:: Economics, International Trade and Finance, Treaties and Agreements, and Trade
Political Geography:: China, South Korea, and Asia-Pacific

10. Public responses to foreign protectionism: Evidence from the US-China trade war

Author:: David Steinberg and Yeling Tan
Publication Date:: 06-2022
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: America's recent turn toward protectionism has raised concerns about the future viability of the liberal international trading system. This study examines how and why public attitudes toward international trade change when one's country is targeted by protectionist measures from abroad. To address this question, the authors fielded three original survey experiments in the country most affected by US protectionism: China. First, they find consistent evidence that US protectionism reduces Chinese citizens' support for trade. This finding is replicated in parallel experiments on technology cooperation, and further validated outside of the China context with a survey experiment in Argentina. Second, they show that responses to US protectionism reflect both a "direct reciprocity" logic—citizens want to retaliate against the United States specifically—and a "generalized reciprocity" logic that reduces support for trade on a broader, systemic basis.
Topic:: Economics, International Trade and Finance, Protectionism, and Competition
Political Geography:: China, Asia, North America, and United States of America

11. Brothers in arms: The value of coalitions in sanctions regimes

Author:: Sonali Chowdhry, Julian Hinz, Katrin Kamin, and Joschka Wanner
Publication Date:: 10-2022
Content Type:: Working Paper
Institution:: Kiel Institute for the World Economy (IfW)
Abstract:: This paper examines the impact of coalitions on the economic costs of the 2012 Iran and 2014 Russia sanctions. By estimating and simulating a quantitative general equilibrium trade model under different coalition set-ups, we (i) dissect welfare losses for sanction-senders and target; (ii) compare prospective coalition partners and; (iii) provide bounds for the sanctions potential — the maximum welfare change attainable — when sanctions are scaled vertically, i.e. across sectors up to an embargo, or horizontally, i.e. across countries up to a global regime. To gauge the significance of simulation outcomes, we implement a Bayesian bootstrap procedure that generates confidence bands. We find that the implemented measures against Iran and Russia inflicted considerable economic harm, yielding 32 – 37% of the vertical sanctions potential. Our key finding is that coalitions lower the average welfare loss incurred from sanctions relative to unilateral implementation. They also increase the welfare loss imposed on Iran and Russia. Adding China to the coalition further amplifies the welfare loss by 79% for Iran and 22% for Russia. Finally, we quantify transfers that would equalize losses across coalition members. These hypothetical transfers can be seen as a sanctions-equivalent of NATO spending goals and provide a measure of the relative burden borne by coalition countries.
Topic:: Globalization, International Trade and Finance, Markets, Sanctions, Alliance, and Embargo
Political Geography:: Russia, China, Europe, Asia, North America, and United States of America

12. China’s Belt and Road Initiative: Successful economic strategy or failed soft-power tool?

Author:: Jyrki Kallio
Publication Date:: 09-2022
Content Type:: Policy Brief
Institution:: Finnish Institute of International Affairs
Abstract:: The Belt and Road Initiative (BRI) is part of China’s efforts to integrate its neighbouring countries into its economic sphere, thus increasing China’s security in its immediate neighbourhood while facing an increasingly hostile international environment due to its rivalry with the US. In reality, the BRI has evolved into an umbrella term for various infrastructure and development projects with no unified object or strategy. The projects should, in principle, increase goodwill towards China, and correspondingly boost its influence, but in practice they are mainly aimed at economic benefit. The results of the BRI, especially as a soft-power tool, are ambiguous. Its ideational basis is thin, consisting mainly of China’s critique towards the “hegemony of the West”. This reduces the BRI to a hollow slogan with little appeal apart from the pragmatic gains. However, the BRI is here to stay for the duration of Xi Jinping’s rule because China’s foreign policy is often driven by prestige. The BRI is enshrined in the Communist Party’s Constitution in order to both add weight to the initiative and to increase the Party’s prestige with its success, modest as it may be.
Topic:: Economics, International Trade and Finance, Infrastructure, Hegemony, and Belt and Road Initiative (BRI)
Political Geography:: China and Asia

13. Securing Asia’s Subsea Network U.S. Interests and Strategic Options

Author:: Matthew Goodman and Matthew Wayland
Publication Date:: 04-2022
Content Type:: Policy Brief
Institution:: Center for Strategic and International Studies
Abstract:: More than 1 million kilometers of submarine cables traversing the ocean floor, each about as wide as a garden hose, transmit up to 99 percent of international data, underpinning global trade and communication. This vital digital infrastructure faces myriad threats, from earthquakes and typhoons to fishing nets and saboteurs. The United States derives significant advantages from its centrality in Asia’s subsea cables, which contribute up to $169 billion to the U.S. economy annually and could benefit more U.S. workers and businesses as demand for digital products and services grows globally. But realizing those benefits will require the United States to step up its policy engagement on Asia’s cable networks, which are changing with China’s rise, the emergence of new regional hubs, and new transpacific routes designed to reduce risks and increase network resiliency.
Topic:: Security, International Trade and Finance, Communications, Maritime, and Commerce
Political Geography:: China and Asia

14. Beyond Geopolitics: A Geoeconomic Perspective of China-Iran Belt and Road Initiative Relations

Author:: Seyedashkan Madani
Publication Date:: 06-2022
Content Type:: Journal Article
Journal:: Uluslararasi Iliskiler
Institution:: International Relations Council of Turkey (UİK-IRCT)
Abstract:: The Belt and Road Initiative (BRI) is the largest regional development project in the history of global development. It is estimated that Chinese companies will invest up to $1.2 trillion in infrastructure development in Asia and elsewhere in the coming years. However, there are many obstacles to the successful implementation of this initiative in the host countries, including geographical factors, local culture, geopolitical contestation, public attitudes, institutional capacity, and governance quality. These challenges can substantially diminish the coherence of the BRI and prevent its effective implementation. This study aims to develop an analytical framework for exploring the risks associated with and challenges of executing BRI projects in Iran. To this end, all risks are categorized into three broad groups: operational, financial, and geopolitical. The results show that Iran generally faces many internal and external challenges in attracting foreign investment. The critical question is: Why is Iran receiving substantial investment from Chinese companies despite its unfavorable business environment? A geoeconomic approach is used to develop a theoretical framework to explain Iran-China BRI relations. In this context, Iran’s geoeconomic significance is the main factor encouraging the flow of Chinese investment into the country. The BRI comprises mostly functional cooperation between China and countries along the Silk Road based on a specific geospatial environment. Iran’s geospatial environment encourages Chinese investments in infrastructure, which is the main content of functional cooperation.
Topic:: Development, International Trade and Finance, Infrastructure, and Belt and Road Initiative (BRI)
Political Geography:: China and Asia

15. Economic Equidistance is Not an Option: Germany and the US-Chinese Geo-Economic Conflict

Author:: Markus Jaeger
Publication Date:: 01-2022
Content Type:: Policy Brief
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: Intensifying US-Chinese rivalry will increase pressure on Germany to support a more hawkish US geo-economic policy. The new German government should give Washington support in as far as US policies seek to create an economic level playing field vis-à-vis China. Given its dependence on international trade and investment, Germany should seek to resist a broader politicization of international economic relations.
Topic:: Economics, International Trade and Finance, Geopolitics, and Rivalry
Political Geography:: China, Germany, and United States of America

16. China's Geo-Economic Interest in Africa: A Short Overview

Author:: Jajati K. Pattnaik and Chandan K. Panda
Publication Date:: 06-2022
Content Type:: Journal Article
Journal:: Journal of Liberty and International Affairs
Institution:: Institute for Research and European Studies (IRES)
Abstract:: The article examines China’s geo-economic interest in Africa. China intends to exercise its leverage over both coastal frontiers for trade and defense and its hinterland for rich mineral, metal, and fossil deposits. Furthermore, the debt trap seems to be one of the methods through which China intended to bargain with Africa to bag as much advantage as it could gain. The question that emerges from this critical engagement with China-Africa relations is to look into how the reality of Africa’s narrative of development is projected both from outside and within and the contradiction embodied in that projection. China used the narrative of development to set its feet on African soil. This paper discusses China’s penetration into Africa by offering interest-free loans and its gradual emergence as a neocolonial power through expanding its network. The method used in the study to establish China’s monopoly and interfering streak in African affairs through BRI is the analysis of available data based on which the objectives and the conclusions are drawn.
Topic:: International Trade and Finance, Infrastructure, Hegemony, Belt and Road Initiative (BRI), and Strategic Interests
Political Geography:: China and Asia

17. Cutting through the Value Chain: The Long-Run Effects of Decoupling the East from the West

Author:: Gabriel Felbermayr, Alexander Sandkamp, and Hendrik Mahlkow
Publication Date:: 03-2022
Content Type:: Working Paper
Institution:: Kiel Institute for the World Economy (IfW)
Abstract:: With ever-increasing political tensions between China and Russia on one side and the EU and the US on the other, it only seems a matter of time until protectionist policies cause a decoupling of global value chains. This paper uses a computable general equilibrium trade model calibrated with the latest version of the GTAP database to simulate the effect of doubling non-tariff barriers - both unilateral and reciprocal - between the two blocks on trade and welfare. Imposing trade barriers almost completely eliminates bilateral imports. In addition, changes in price levels lead to higher imports and lower exports of the imposing country group from and to the rest of the world. The targeted country group increases exports to the rest of the world and reduces imports. Welfare falls in all countries involved, suggesting that governments should strive to cooperate rather than turning away from each other. By imposing a trade war on Russia, the political West could inflict severe damage on the Russian economy because of the latter’s smaller relative size.
Topic:: International Cooperation, International Trade and Finance, European Union, Conflict, Trade Wars, Protectionism, and Rivalry
Political Geography:: Russia, China, Europe, Asia, North America, and United States of America

18. Biden, Israel, and China: Making a Difficult Threesome Work

Author:: Steven R. David
Publication Date:: 05-2022
Content Type:: Working Paper
Institution:: Jerusalem Institute for Strategy and Security (JISS)
Abstract:: It is wrong to expect Israel, a middle-level economy, to decouple from China when far wealthier countries (including the United States) show no signs of following suit. Israeli companies should not be subject to restrictions not placed on companies elsewhere, including the United States itself.
Topic:: Diplomacy, International Trade and Finance, Hegemony, and Conflict
Political Geography:: China, Middle East, Israel, Asia, North America, and United States of America

19. Trade and Supply Chain Issues for Taiwan and Australia

Author:: Bryce Wakefield
Publication Date:: 12-2021
Content Type:: Special Report
Institution:: Australian Institute of International Affairs
Abstract:: Covid-19 has disrupted supply chains around the world, while political movements in the United States and Europe that predate the pandemic have raised the prospect that we are once more living in a world where regionalism and nationalism trump global integration of trade. China, meanwhile, has made it clear that it sees trade as a tool in its political statecraft, a factor that has been keenly felt in the region. Nervous actors in the Indo-Pacific are looking to diversify their trade away from China, but do nations in the region have many choices? What does this mean for Taiwan-Australia trade relations? How does Taiwan’s ambiguous position in the international system relate to recent trade agreements? Where do Taiwan and Australia, as mid-level powers, sit within the global trading order?
Topic:: International Trade and Finance, Public Health, Pandemic, and COVID-19
Political Geography:: China, Taiwan, Asia, and Australia

20. China's Belt and Road: Implications for the United States

Author:: Jennifer A. Hillman and David Sacks
Publication Date:: 03-2021
Content Type:: Special Report
Institution:: Council on Foreign Relations
Abstract:: The Belt and Road Initiative (BRI), Chinese President Xi Jinping’s signature foreign policy undertaking and the world’s largest infrastructure program, poses a significant challenge to U.S. economic, political, climate change, security, and global health interests. Since BRI’s launch in 2013, Chinese banks and companies have financed and built everything from power plants, railways, highways, and ports to telecommunications infrastructure, fiber-optic cables, and smart cities around the world. If implemented sustainably and responsibly, BRI has the potential to meet long-standing developing country needs and spur global economic growth. To date, however, the risks for both the United States and recipient countries raised by BRI’s implementation considerably outweigh its benefits. BRI was initially designed to connect China’s modern coastal cities to its underdeveloped interior and to its Southeast, Central, and South Asian neighbors, cementing China’s position at the center of a more connected world. The initiative has since outgrown its original regional corridors, expanding to all corners of the globe. Its scope now includes a Digital Silk Road intended to improve recipients’ telecommunications networks, artificial intelligence capabilities, cloud computing, e-commerce and mobile payment systems, surveillance technology, and other high-tech areas, along with a Health Silk Road designed to operationalize China’s vision of global health governance.1 Hundreds of projects around the world now fall under the BRI umbrella.
Topic:: International Trade and Finance, Infrastructure, Hegemony, Conflict, Belt and Road Initiative (BRI), and Regionalism
Political Geography:: China, Asia, North America, and United States of America

21. ‘Community of Common Destiny’ as Post-Western Regionalism: Rethinking China’s Belt and Road Initiative from a Confucian Perspective

Author:: Raoul Bunskoek and Chih-yu Shih
Publication Date:: 06-2021
Content Type:: Journal Article
Journal:: Uluslararasi Iliskiler
Institution:: International Relations Council of Turkey (UİK-IRCT)
Abstract:: Conventional explanations of China’s Belt and Road Initiative (BRI) focus on how the BRI will be in China’s interest, how it will strengthen China’s geopolitical position, or a combination of the two. We argue that such views are limited because they merely interpret the BRI through ‘Western’ IR lenses. This paper ‘re-worlds’ China by using the BRI as a case study to illustrate how in the discursive field(s) of China’s elite, China as a Westphalian nation state, and China as amorphous Tianxia under Confucianism coexist, struggle for recognition, and are interrelated. Consequently, we argue that China, because of the economic miracle it created domestically over the last few decades, is now convinced of its own ‘moral superiority’, and ready to export its self-perceived ‘benevolence’ abroad. In this light, we read the BRI to be undergirded by a combination of ‘Western’ and Confucian values, suggesting a post-Western/post-Chinese form of regionalism.
Topic:: International Trade and Finance, Infrastructure, Hegemony, Belt and Road Initiative (BRI), and Regionalism
Political Geography:: China and Asia

22. The Clash of Japan’s FOIP and China’s BRI?

Author:: Daisuke Akimoto
Publication Date:: 06-2021
Content Type:: Journal Article
Journal:: The Rest: Journal of Politics and Development
Institution:: Centre for Strategic Research and Analysis (CESRAN)
Abstract:: Since the late 2010s, the concept of the “Indo-Pacific” has been becoming increasingly significant in the international political arena. In August 2016, Japanese Prime Minister Shinzo Abe proposed a policy of “Free and Open Indo- Pacific” (FOIP) as Japan’s new diplomatic vision at the Tokyo International Conference on African Development (TICAD) VI held in Kenya. The FOIP strategy was supported by the Donald Trump administration followed by the renaming of the United States Indo-Pacific Command. However, China has viewed the FOIP as a containment strategy against the Chinese Belt and Road Initiative (BRI). The FOIP vision is unclear for general observers, and it might cause a security dilemma with the Chinese BRI. Is it possible for the FOIP vision to coexist with China’s BRI, or are these two strategic visions destined to clash with each other? In an attempt to answer these questions, the article aims to provide multiple perspectives of the FOIP concept by applying international relations (IR) theory. This article warns that the FOIP and the BRI are likely to bring about diplomatic tension that could be escalated into a military skirmish over the territorial dispute. In order to avoid the possible military clash, it finally seeks to explore possible future pathways of the peaceful coexistence of the two visions in the Indo-Pacific region.
Topic:: International Trade and Finance, Infrastructure, Belt and Road Initiative (BRI), and Rivalry
Political Geography:: Japan, China, and Asia

23. The Impact of Intellectual Property Protection through FTA on International Trade

Author:: Hyunsoo Kim, Sangjun Yea, Hyeyoon Keum, and Min Ji Kang
Publication Date:: 08-2021
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: The importance of intellectual property rights (IPRs) for innovation has grown and the protection of intellectual property in international trade has also been strengthened. AI-related patent applications have been increasing rapidly and many AI patents are being filed in various industries. Intellectual property also represents one of the main controversies of U.S.-China trade relations in the past three decades and remains one of the core issues behind the two countries’ recent trade conflicts. As a result, global protection for IPRs has been expanded in recent decades. This article investigates changes in the trend regarding the IP protection level in FTA and how the IP protection through FTAs has affected the composition of aggregate trade flows of member countries in order to provide basic findings necessary to formulate the FTA policies regarding the protection of IPRs in Korea.
Topic:: International Trade and Finance, Intellectual Property/Copyright, Economy, and Artificial Intelligence
Political Geography:: China, South Korea, and United States of America

24. Economic Cracks in the Great Wall of China: Is China's Current Economic Model Sustainable?

Author:: Thomas J. Duesterberg
Publication Date:: 12-2021
Content Type:: Special Report
Institution:: Hudson Institute
Abstract:: Since Deng Xiaoping changed the trajectory of Chinese economic policy in 1978, the People’s Republic of China (PRC) has amassed an impressive record of economic growth. Many economists and political analysts, however, have come to question whether the top-down, mercantilist economic system in the PRC is sustainable in the medium to long term. This report explores the long-term structural and short-term economic problems in contemporary China, and in particular considers whether the Xi Jinping regime can avoid a financial crisis and effectively manage a transition to a stable new equilibrium. Structural issues include a looming downturn in the population and in the workforce; associated problems with an underdeveloped and underfinanced social safety and welfare net; income and regional inequality; environmental degradation; and domestic shortages of raw materials, agricultural production, and energy resources. The acute economic problems analyzed in the paper are a real estate bubble, the accumulation of dangerous levels of debt, dependence on external markets and financing, a difficult transition to a more consumer-oriented and less investment-driven economy, a crackdown on dynamic digital and financial sectors, a return to dominance of low-productivity state-owned enterprises and manufacturing firms, and weak governance from an increasingly authoritarian and unaccountable regime. Many of these acute issues result from Xi’s changes in policy since 2013. Xi’s turn toward greater economic self-reliance while maintaining mercantilist trade relations signals an effective decoupling from the US and allied economies. Some historical examples of bubble economies and financial crises are discussed as possible analogies to the current situation in China. One conclusion is that the Middle Kingdom will see a much slower-growing economy, which makes addressing the structural issues much more difficult. Inability or lack of determination to address the large array of issues may also undermine the political legitimacy of the current regime, which has been buttressed since 1978 by a rapid growth model based on debt, real estate, and investment, including infrastructure. The concluding section of this report offers policy tools that the United States and its allies could deploy to induce China to be a more responsible stakeholder in the world economy and a more reliable contributor to global sustainability. The tools considered in the study include trade policy and export controls, expanded oversight of foreign investment (both direct and portfolio investment), cooperation with allies on China policy, and defense-related sanctions. The paper also suggests that deployment of these tools could be a factor in weakening China’s economy as well as a means to convince its leadership to pursue less mercantilist and authoritarian global strategies, which are harmful to the US economy and to global stability.
Topic:: Foreign Policy, International Trade and Finance, Finance, Economy, and Economic Growth
Political Geography:: China and Asia

25. Revisiting the Us-china Trade War: A Strategic Assessment

Author:: Zaeem Hassan Mehmood
Publication Date:: 01-2021
Content Type:: Journal Article
Journal:: AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:: Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:: The relations among United States of America and People’s Republic of China have historically survived several bouts and rounds however the approach employed by the Trump Administration for a program involving reprisal hefty tariff-trade war against China has given a new face to the bilateral relations between the two states. The paper demonstrates that domestic and international agents played a vital role in initiating and nurturing the trade clash between Washington and Beijing since 2018 to date. The aim of the study is to ascertain that how the political climate and past pursuits of one country conditions policy outcomes in another, and how domestic political pressures on politician’s conditions their relations with foreign counterparts. The paradigm of rational choice theory is adopted to provide a conceptual understanding to the triggering of the trade war between the economic giants.
Topic:: Cold War, International Trade and Finance, Hegemony, Conflict, Trade Wars, and Rivalry
Political Geography:: China, Asia, North America, and United States of America

26. Revitalization of Maritime Silk Road Based on the Security Implications and Cooperation

Author:: Hamsu Abdul Gani
Publication Date:: 07-2021
Content Type:: Journal Article
Journal:: AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:: Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:: The revitalization of the Silk Road as a trade route, cultural exchange, religion, science and civilization based on the “Maritime Silk Road” (MSR) is the focus of strategic studies and international relations. ASEAN countries, including Indonesia in the MSR route and the contestation of the United States and China who are fighting for dominance in the Indo-Pacific region, face challenges and opportunities. The results of this research, which uses a normative approach, show that the revitalization of the MSR may give positive impacts to China’s foreign affairs for the good interaction and communication among people by economic trade.
Topic:: Globalization, International Trade and Finance, Maritime, and Silk Road
Political Geography:: China and Asia

27. Can the Biggest Emitters Set Up a Climate Club? A Review of International Carbon Pricing Debates

Author:: Carole Mathieu
Publication Date:: 06-2021
Content Type:: Special Report
Institution:: Institut français des relations internationales (IFRI)
Abstract:: The world’s largest emitting countries are reconsidering the role of carbon pricing instruments and increasingly looking at carbon border adjustment mechanisms (CBAMs) to address leakage concerns. This renewed momentum should trigger a broader discussion on how to make trade policies compatible with the climate agenda. With the Glasgow climate conference (COP26) approaching, the concept of putting a price on carbon is generating unprecedented interest in Canada and the United States (US), China and Japan. But the European Union (EU) still stands as an exception; it is the only regional trading bloc that is determined to leverage the full potential of its emissions trading system (ETS). To date, others have lacked the political backing to deploy nation-wide carbon pricing initiatives with a design sturdy enough to drive meaningful emission reductions. Canada has made significant progress with the adoption of a national framework for carbon pricing in 2018. The country’s draft regulations foresee the introduction of a federal ETS as of 2022 and a gradual increase in carbon prices, but its ambitions risk being upset by the lack of consistent efforts in the US, its largest trading partner. Given US political divides, a federal carbon pricing scheme is unlikely to materialize in the short run. In China, the long-delayed national ETS has finally been launched. However, its scope is restricted to the power sector for now, and it is likely to only have a modest impact on coal use with its current design. Several arguments may discourage China from fully extending its ETS as planned and rather argue in favor of introducing a complementary carbon tax. Japan has also engaged an expert debate on the benefits of introducing carbon pricing at the national level, but the government is struggling to find a balance between the risk of worsening competitiveness and the need to mobilize investment in clean technologies. For the EU, the upcoming reform of the EU ETS is an opportunity to introduce a truly demanding cap reduction for the 2023-2030 period and make this flagship instrument more robust, predictable, and fair. To initiate in-depth decarbonization of its industry, the EU will need to phase out free allowances. Therefore, other measures addressing unfair competition will have to be introduced and CBAM could be part of the solution. A unilateral application is however no panacea. The EU should move cautiously and start implementing the CBAM to a small set of sectors. This also means that the challenge of leveling the playing field with non-EU producers will remain largely unresolved. There is little chance that an international alliance on carbon pricing or “climate club” can be set up within a timeframe compatible with the climate emergency. Yet, the EU’s CBAM proposal can encourage trading partners to accelerate decision-making on carbon pricing, at least to obtain partial exemption. In addition, having a concrete anti-leakage proposal on the table leads to a sense of the inevitable mismatches between the global trade and climate agendas. Large emitters are starting to acknowledge the need for a multilateral discussion on how to decarbonize industries while maintaining a level playing field. The next step should be to kickstart an open discussion in all possible multilateral fora (G20, International Energy Agency, global industry associations, etc.) and mandate the World Trade Organization (WTO) to develop guidance on a wide range of instruments (including CBAM, but also eco-design labelling and standards, differentiated tariffs based on CO2 intensity, etc.) and including a common exemption approach for Least Developed Countries. Exploring a set of workable solutions should be more attractive to trade partners than pushing for a uniform solution, but results would still take time to materialize. Hence, establishing a level playing field with imports will likely require the EU – and all countries with an aggressive decarbonization agenda for their industries – to strengthen their financial and regulatory support to the deployment of innovative low-carbon manufacturing processes. Again, this almost-unavoidable resort to State aid would strongly benefit from a multilateral discussion.
Topic:: Climate Change, International Trade and Finance, European Union, Carbon Tax, and Carbon Emissions
Political Geography:: Japan, China, Europe, and Canada

28. The China-Pakistan Economic Corridor

Author:: Ali Haider Saleem and Arhama Siddiqa
Publication Date:: 08-2021
Content Type:: Journal Article
Journal:: Baku Dialogues
Institution:: ADA University
Abstract:: The term Silk Road is used by scholars to describe a network of trading posts and markets linking East Asia to the Mediterranean. In terms of geographical context, the editors of Baku Dialogues define the region as the “geographic space looking west past Anatolia to the warm seas beyond; north across the Caspian towards the Great Plain and the Great Steppe; east to the peaks of the Altai and the arid sands of the Taklamakan; and south towards the Hindu Kush and the Indus valley, looping down around in the direction of the Persian Gulf and across the Fertile Crescent.” States falling under this parasol include China, Pakistan, Iran, Turkey, the five Central Asian republics, Azerbaijan, and Russia. China’s Belt and Road Initiative (BRI), which traverses several continents, is a long‑term, strategic investment plan with the objective of facilitating economic integration of countries in line with the historic Silk Road. In April 2015, China’s President, Xi Jinping announced the China‑Pakistan Economic Corridor (CPEC), which amounts to BRI’s flagship project. This enterprise, which encompasses road, rail, and oil pipeline links, will help Beijing advance its influence across South and Central Asia.
Topic:: Economics, International Cooperation, International Trade and Finance, Bilateral Relations, Infrastructure, and Silk Road
Political Geography:: Pakistan, China, and Asia

29. Beijing’s Long Way to the Gulf Region Oil, Security, Geopolitics

Author:: Fuad Shahbazov
Publication Date:: 04-2021
Content Type:: Journal Article
Journal:: Baku Dialogues
Institution:: ADA University
Abstract:: Energy cooperation has been a key aspect of growing bilateral cooperation between China and the Arab states of the Gulf region for the past several years. Since 1996, China has become a net importer of crude oil and, as the second‑largest energy consumer in the world after the United States, is now the third‑largest importer of oil after the United States and Japan. Therefore, it should not come as a surprise that China is eying a deep and strategic partnership with the states of a region that sits on top of the world’s largest proven crude oil and natural gas reserves. The deepening political and economic cooperation between China and the member states of the Gulf Cooperation Council (GCC) has received increasing attention from the region’s more established strategic players: foremost the United States, but also the UK as well as the EU and some of its member states. Indeed, the region’s apparent geopolitical challenges— such as the American withdrawal from the Middle East, the escalation of sectarian wars in the region, the outbreak and development of the Syrian conflict followed by the spread of Islamic radicalism and similar threats—have encouraged the Arab states in the Gulf (as well as Iran) to look more to the East for new reliable partners. This has provided China with an opportunity to obtain a foothold in the region, which sits adjacent to the Silk Road region and is therefore of significant and lasting interest to readers of Baku Dialogues. With the rapid growth of its economy and consequent heightened energy demands, China is viewed as a potential investor by the oil rich GCC states, each of which needs to diversify its economy. Ongoing Western sanctions directed against Iran also make China an attractive proposition for Tehran. Although the Chinese interest in, and policy towards, the region is increasingly complex, this new axis between the Gulf region (especially the Arab half) and China has not received much attention from the think tank and academic communities—at least in the West.
Topic:: Security, International Cooperation, International Trade and Finance, Oil, Natural Resources, Hegemony, and Energy
Political Geography:: China, Asia, and Gulf Nations

30. East Asian Integration and Its Main Challenge: NTMs in Australia, China, India, Japan, Republic of Korea, and New Zealand

Author:: Yan Lili Ing and Grace Hadiwidjaja
Publication Date:: 07-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: While East Asia has been moving forward with its regional integration agenda, one main challenge remains and is growing – non-tariff measures (NTMs). Animal, vegetable, and food products tend to be more regulated than other products, largely due to quality and safety standards. NTMs affect 66%–98% of total trade in those sectors. Our paper presents the frequency index, coverage ratio, and prevalence score to measure NTMs in the region. They are highest amongst food, vegetable, and animal products; and vary amongst other products, depending on the economy. We find that the high frequency index of NTMs does not necessarily translate to a high value of coverage ratio for trade. One explanation could be that countries tend to regulate imported goods which compete with the domestic products more than imported goods which they need.
Topic:: Globalization, International Trade and Finance, Regional Cooperation, Tariffs, Non-Tariff Measures, and Economic Integration
Political Geography:: Japan, China, India, Asia, South Korea, Australia, Southeast Asia, and New Zealand

31. The EU–China Comprehensive Agreement on Investment: Lessons Learnt for Indonesia

Author:: Yan Lili Ing and Junianto James Losarili
Publication Date:: 08-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: The European Union (EU) and China have recently reached an agreement: the EU–China Comprehensive Agreement on Investment (CAI). As one of the most recent investment agreements concluded by the EU, the paper aims to assess specific concessions made in the agreement, and provides lessons learnt for Indonesia on the ongoing negotiations of the Indonesia–EU free trade agreement, the Comprehensive Economic Partnership Agreement (IEU CEPA). The paper will present an overview of the main areas covered under the CAI, assess the potential impacts of the CAI on EU investment into Indonesia, and set out lessons that can be learnt from the CAI.
Topic:: Economics, International Cooperation, International Trade and Finance, European Union, and Investment
Political Geography:: China, Europe, Indonesia, and Asia

32. China's Ties with Southeast Asia : From Green Shoots to Sustained Recovery

Author:: Kensuke Tanaka
Publication Date:: 01-2021
Content Type:: Policy Brief
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: China's rebound happened relatively quickly owing to a large extent to timely macroeconomic policy responses to the crisis. Lagging somewhat behind China, most Southeast Asian countries have now entered the transition from recession to recovery. Some export-dependent Southeast Asian countries shifted their export destination to China to benefit from its early recovery. This switch of export destination to China illustrates China's important role in leading the recovery of the region. Enhancing regional macroeconomic co-operation would help reduce vulnerability of the region and ensure a sustained recovery. Regional macroeconomic co-operation remains at an early stage in Southeast Asia, but possibilities for further co-operation should be explored.
Topic:: Development, Economics, International Cooperation, International Trade and Finance, and Economic Recovery
Political Geography:: China, Asia, and Southeast Asia

33. What Is Drawing Xi’s China and Lukashenko’s Belarus Closer?

Author:: Solomiya Kharchuk
Publication Date:: 01-2021
Content Type:: Journal Article
Journal:: Polish Political Science Yearbook
Institution:: Polish Political Science Association (PPSA)
Abstract:: What are the primary drivers of the relationship between Xi’s China and Lukashenko’s Belarus? The present research paper uses the historical process-tracing method to provide an answer to this question. Furthermore, it uses quantitative data analysis regarding the economic intercourse between Belarus and China. It examines whether China’s opposition regarding the unipolar American-led world order and Belarus’s security concerns are the primary drivers of the relationship between Minsk and Beijing. The present article concludes that the congruence of beliefs and Minsk’s desire to ensure survival are drawing the two countries closer together. China’s new strategy encompasses Beijing’s increasing participation in world affairs. China opposes the world order led by a single hegemon, the United States of America. In the interim, Belarus, a relatively weak state insignificant in the global balance of power, shares Beijing’s beliefs about the desired nature of the contemporary world order. However, the Belarusian economy’s condition, which relies heavily on external funding, does not allow the economic cooperation between Minsk and Beijing to thrive. China gradually increases its engagement with Belarus, yet it obscures its ambitions, for Minsk lies in Moscow’s sphere of influence.
Topic:: International Cooperation, International Trade and Finance, Infrastructure, Hegemony, and Belt and Road Initiative (BRI)
Political Geography:: China and Asia

34. Gains Associated with Linking the EU and Chinese ETS under Different Assumptions on Restrictions, Allowance Endowments, and international Trade

Author:: Malte Winkler, Sonja Peterson, and Sneha Thube
Publication Date:: 05-2021
Content Type:: Working Paper
Institution:: Kiel Institute for the World Economy (IfW)
Abstract:: Linking the EU and Chinese Emission Trading Systems (ETS) increases the cost-efficiency of reaching greenhouse gas mitigation targets, but both partners will benefit – if at all – to different degrees. Using the global computable-general equilibrium (CGE) model DART Kiel, we evaluate the effects of linking ETS in combination with 1) restricted allowances trading, 2) adjusted allowance endowments to compensate China, and 3) altered Armington elasticities when Nationally Determined Contribution (NDC) targets are met. We find that generally, both partners benefit from linking their respective trading systems. Yet, while the EU prefers full linking, China favors restricted allowance trading. Transfer payments through adjusted allowance endowments cannot sufficiently compensate China so as to make full linking as attractive as restricted trading. Gains associated with linking increase with higher Armington elasticities for China, but decrease for the EU. Overall, the EU and China favor differing options of linking ETS. Moreover, heterogeneous impacts across EU countries could cause dissent among EU regions, potentially increasing the difficulty of finding a linking solution favorable for all trading partners.
Topic:: Climate Change, Environment, International Trade and Finance, Regional Cooperation, and European Union
Political Geography:: China, Europe, and Asia

35. EU-China Investment Agreement: the EU’s Balancing Act between Values and Economic Interests

Author:: Saila Turtiainen
Publication Date:: 03-2021
Content Type:: Commentary and Analysis
Institution:: Finnish Institute of International Affairs
Abstract:: The ratification process for the EU’s new investment agreement with China is expected to be very difficult. Although the aim is to improve EU-China relations, the process of getting the agreement approved in the EU will end up causing further tensions with China as the EU tries to strike a balance between promoting its values and economic interests.
Topic:: International Cooperation, International Trade and Finance, European Union, Conflict, and Economic Cooperation
Political Geography:: China, Europe, and Asia

36. China and Geoeconomic Dynamics in Central Asia: Balancing Global Strategies, Local Interests and Multiple Partners

Author:: Aliya Tskhay
Publication Date:: 10-2021
Content Type:: Working Paper
Institution:: Finnish Institute of International Affairs
Abstract:: Central Asia is at the core of China’s ambitious Belt and Road Initiative (BRI), which promises to bring connectivity, trade, and improved infrastructure, as well as overall economic development to the states of the region. Yet beyond the official rhetoric, China is promoting its power through geoeconomic means. This paper looks at areas of cooperation (energy, infrastructure, trade, and finance) and identifies the ways in which China is involved with the region. Through a combination of loans, investments, and infrastructure projects, the research shows how China ‘binds’ the region closer to itself and ‘wedges’ out alternative partners. It also shows how Central Asian states utilise the funding within the BRI framework for national development programmes, whilst navigating avenues for mitigating the establishment of a dependent relationship with China. The paper concludes with some policy implications for China, Central Asia, and the wider region.
Topic:: Development, International Trade and Finance, Infrastructure, Hegemony, Belt and Road Initiative (BRI), and Strategic Interests
Political Geography:: China and Asia

37. China and the Persian Gulf in the Aftermath of a U.S. Withdrawal

Author:: Steven Simon
Publication Date:: 09-2021
Content Type:: Policy Brief
Institution:: Quincy Institute for Responsible Statecraft
Abstract:: • Given longstanding U.S. economic ties to the Arab Gulf states, the withdrawal of the U.S. military would not mean the United States is departing from the region. Even if it did signify that, however, China would be unlikely to fill the vacuum. A U.S. decision to maintain a military presence in the region should therefore not be based on fear of a strategic vacuum that China will fill to America’s disadvantage. • The United States should leverage China’s interest in stable cross–Gulf relations by working in tandem with Beijing to encourage dialogue and confidence-building measures. • The United States should monitor Chinese military deployments to the Indian Ocean and work with Gulf partners to set limits on China’s military use of air and naval bases. This would serve as a confidence-building measure and ensure that the Gulf does not become an arena for competition amid heightened Sino–American tensions.
Topic:: Foreign Policy, International Trade and Finance, Military Affairs, and Strategic Engagement
Political Geography:: China, Middle East, Persian Gulf, and United States of America

38. Estimating the Arms Sales of Chinese Companies

Author:: Nan Tian and Fei Su
Publication Date:: 01-2020
Content Type:: Working Paper
Institution:: Stockholm International Peace Research Institute
Abstract:: Quantitative research on the finances of the Chinese arms industry has been limited by the scarcity of available data. A scoping study to estimate the financial value of the arms sales of companies in the Chinese arms industry—using a new methodology—found information on four companies: the Aviation Industry Corporation of China (AVIC), the China Electronics Technology Group Corporation (CETC), the China South Industries Group Corporation (CSGC) and the China North Industries Group Corporation (NORINCO). These four companies cover three main sectors of conventional arms production: aircraft, electronics and land systems. The estimates suggest that China is the second-largest arms producer in the world, behind the United States and ahead of Russia. All four of the profiled companies would be ranked among the 20 largest arms-producing and military services companies globally in 2017, with three—AVIC, NORINCO and CETC—in the top 10. The new methodology improves the understanding of the structure, size and evolution of the global arms industry.
Topic:: International Trade and Finance, Weapons, Arms Trade, and Military Spending
Political Geography:: China and Asia

39. Labour Market Impacts of Import Penetration from China and Regional Trade Agreement Partners: The Case of Japan

Author:: Kazunobu Hayakawa, Tadashi Ito, and Shujiro Urata
Publication Date:: 04-2020
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: The impacts of imports on the domestic labour market have been hotly debated recently. The purpose of this paper is to empirically examine the effects of not only imports from China but also those under regional trade agreements (RTAs) on employment in Japan. As in previous studies in the literature, we found that the rise in import penetration from China significantly decreases employment in Japan. However, import penetration under RTA regimes is found to have insignificant effects on employment. The finding suggests that the increase in imports under RTA regimes might not be harmful to the domestic labour market. In addition, we did not find significant effects of import penetration via input–output linkages. This insignificant result may be because imports by Japanese manufacturing firms are mostly conducted in the form of intra-firm trade, enabling them to avoid negative impacts on employment.
Topic:: International Trade and Finance, Regional Cooperation, Labor Issues, Employment, and Manufacturing
Political Geography:: Japan, China, and Asia

40. 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

41. The Importance of the Western Balkans in China’s Foreign Policy

Author:: Marcin Przychodniak
Publication Date:: 06-2020
Content Type:: Special Report
Institution:: The Polish Institute of International Affairs
Abstract:: China’s cooperation with the Western Balkans through the “17+1” format and Belt and Road Initiative (BRI), among others, is primarily political. In the economic sphere, Chinese investments are to a large extent only declarations, and trade is marginal in comparison to cooperation with the EU or others. China’s goals are to gain political influence in future EU countries and limit their cooperation with the U.S. Competition with China in the region requires more intense EU-U.S. cooperation, made more difficult by the pandemic.
Topic:: Foreign Policy, International Trade and Finance, Belt and Road Initiative (BRI), Investment, and Strategic Competition
Political Geography:: China, Europe, Asia, and Balkans

42. U.S. Policy in the Arctic

Author:: Paweł Markiewicz
Publication Date:: 06-2020
Content Type:: Special Report
Institution:: The Polish Institute of International Affairs
Abstract:: The Arctic has become another contested area between the U.S., Russia, and China. The region’s growing importance for global trade and American security means the U.S. goal is largely to maintain freedom of navigation in the Arctic. For this reason, the Trump administration strives to increase American capacities to operate in the Arctic. The effects of the COVID-19 pandemic will delay implementing these plans; nevertheless, they will be achieved in the long term and the U.S. will also expect support in the Arctic from NATO allies.
Topic:: Security, Foreign Policy, NATO, and International Trade and Finance
Political Geography:: Russia, China, Arctic, and United States of America

43. Tariffs and Monetary Policy: A Toxic Mix

Author:: Michael D Bordo and Mickey D. Levy
Publication Date:: 01-2020
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The ratcheting up of tariffs and the Fed’s discretionary conduct of monetary policy are a toxic mix for economic performance. Escalating tariffs and President Trump’s erratic and unpredictable trade policy and threats are harming global economic performance, distorting monetary policy, and undermining the Fed’s credibility and independence. President Trump’s objectives to force China to open access to its markets for international trade, reduce capital controls, modify unfair treatment of intellectual property, and address cybersecurity issues and other U.S. national security issues are laudable goals with sizable benefits. However, the costs of escalating tariffs are mounting, and the tactic of relying exclusively on barriers to trade and protectionism is misguided and potentially dangerous. The economic costs to the United States so far have been relatively modest, dampening exports, industrial production, and business investment. However, the tariffs and policy uncertainties have had a significantly larger impact on China, accentuating its structural economic slowdown, and are disrupting and distorting global supply chains. This is harming other nations that have significant exposure to international trade and investment overseas, particularly Japan, South Korea, and Germany. As a result, global trade volumes and industrial production are falling. Weaker global growth is reflected in a combination of a reduction in aggregate demand and constraints on aggregate supply.
Topic:: International Trade and Finance, Monetary Policy, Economic Growth, Tariffs, and Industry
Political Geography:: Japan, China, Europe, Asia, South Korea, Germany, North America, and United States of America

44. The U.S.-China Trade War: Is There an End in Sight?

Author:: Simon Lester and Huan Zhu
Publication Date:: 01-2020
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Donald Trump was a trade “hawk” long before he became president. In the late 1980s, he went on the Oprah Winfrey show and complained about Japan “beating the hell out of this country” on trade (Real Clear Politics 2019). As president, he has continued with the same rhetoric, using it against a wide range of U.S. trading partners, and he has followed it up with action (often in the form of tariffs). While many countries have found themselves threatened by Trump’s aggressive trade policy, his main focus has been China. As a result, the United States and China have been engaged in an escalating tariff, trade, and national security conflict since July 2018, when the first set of U.S. tariffs on China went into effect and China retaliated with tariffs of its own. In this article, we explore the U.S.-China economic conflict, from its origins to the trade war as it stands today. We then offer our thoughts on where this conflict is heading and when it might end.
Topic:: Economics, International Trade and Finance, Tariffs, Trade Wars, and Donald Trump
Political Geography:: China, Asia, North America, and United States of America

45. The Impact Of Covid-19 On Sino-African Trade Activities

Author:: Egoh Aziz
Publication Date:: 06-2020
Content Type:: Special Report
Institution:: The Nkafu Policy Institute
Abstract:: The recent outbreak of COVID-19 has caused waves of horror and anxiety across many nations in the world. Considering the intense unravelling of the pandemic, no exact figure as per the number of confirmed and death cases worldwide is definite because the situation changes almost every hour. However, on April 14, 2020 3:40 GMT, Worldometer reported 210 countries and territories across the globe having a total of 1,925,179 confirmed cases, and a dead toll of 119,699 deaths. The impact of the pandemic is disastrous globally affecting a variety of sectors including the service and supply chain, as well as trade, manufacturing, and tourism. This article aims to provide a synoptic assessment of the impact of COVID-19 on Sino-African trade activities. It stresses that, if African policymakers revamp their efforts to quickly address COVID-19, the human casualty will be less and African economic growth may experience lesser shock as previewed by the IMF. On the other hand, if they relent their efforts, the human casualty will soar while the growth rate may decline. The effect of COVID-19’s outbreak in China has caused a slowdown on exports and services directed towards China.According to statistics from the General Administration of Customs of China, in 2018, China’s total import and export volume with Africa was US$204.19 billion, a yearly increase of 19.7%, surpassing the total growth rate of foreign trade in the same period by 7.1 percentage points. Among these, China’s exports to Africa were US$104.91 billion, up 10.8% and China’s imports from Africa were US$99.28 billion, up 30.8%; the surplus was US$5.63 billion, down 70.0% every year. The growth rate of Sino African trade was the highest in the world in 2018. This shows that Sino-African trade has a significant contribution to the growth of African economies.
Topic:: Economics, Health, International Cooperation, International Trade and Finance, Trade, Coronavirus, Pandemic, and COVID-19
Political Geography:: Africa, China, Asia, and Cameroon

46. GEOGRAPHY, INTERNATIONAL TRADE AND INSTITUTIONS: AN ECONOMETRIC ANALYSIS OF THE BRICS

Author:: Marcelo Corrêa, Luiz Michelo, and Carlos Schonerwald
Publication Date:: 01-2020
Content Type:: Journal Article
Journal:: Conjuntura Austral: Journal of the Global South
Institution:: Conjuntura Austral: Journal of the Global South
Abstract:: After two decades of intense debate about the determinants of economic development, with authors examining the variables that characterize geography, institutions and international trade, BRICS countries were left behind. Thus, in order to fill this gap, this paper uses econometrics of panel data to analyze the economic performance of these developing nations. Mainstream economists have run into serious problems to deal with these particular determinants within the traditional endogenous growth model, and they have not come up with an agreement, so they keep trying to figure out who is the “winner of this competition”. Empirical evidence shows that there is not a unique explanatorydeterminant, and recognizing which of them can provide the best understandingdepends on the particularities of each case (ROS, 2013).Examining BRICS as a group of countries demonstrates that these specific developing nations share some remarkable features. They are rapidly-growing nations with a vast amount of land and growing participation in international trade. So, empirical tests are feasible and desirable in order to understand their recent development. However, they are also different in many aspects, mostly in terms of institutional characteristics. Thus, our goal is to find out if the econometrics of panel data can shed some light on this ongoing debate.
Topic:: International Political Economy, International Trade and Finance, Trade, Trade Policy, Economic Cooperation, and Geography
Political Geography:: Russia, China, India, South Africa, and Brazil

47. Curbing State-Driven Trade Policies: How to Craft New & Effective Approaches to Counter Distortive Practices

Author:: Wendy Cutler
Publication Date:: 07-2020
Content Type:: Policy Brief
Institution:: Asia Society
Abstract:: Much attention has been focused on China’s unfair intellectual property practices and the imbalance in the U.S.-China trade relationship, but equally troubling are large-scale Chinese industrial subsidies, the behavior of state-owned enterprises (SOEs), and in general, the oversized and opaque role of the Chinese state in the economy. While the U.S-China phase one trade deal tackled some important sources of bilateral tension and aimed to boost Chinese purchases of U.S. goods and services, it was silent on industrial subsidies and related matters, leaving them for the next phase of negotiations, the fate of which is now in question. U.S. concerns on these matters are shared by other trading partners including the European Union (EU) and Japan. Yet despite widespread disapproval of such practices, building new global rules to combat subsidies has proven challenging. This is due to several factors, ranging from gridlock at the WTO, differences of views among like-minded countries on the required level of ambition, and uncertainty as to how best to approach the enormous complexities in China’s subsidies and related policies. The Organization for Economic Cooperation and Development (OECD) has sought to unpack this complexity, conducting recent studies of Chinese subsidies in two key sectors: aluminum and semiconductors. Both studies illustrate how Chinese subsidies are not simple cash handouts from the state to protected firms so that they can sell at favorable and distorting prices. The OECD finds subsidies can take various forms, including downstream or upstream help that trickles up or down to the firm that’s intended to benefit. They can take the form of favorable equity or debt purchases or bonds provided at below-market rates. And with interconnected global value chains, subsidies can effectively be granted covertly, intended to benefit one firm that might be several links away along the chain. In China, the problem is compounded by an opaque “party-state” structure that obscures not only the recipients of subsidies, but also the source. According to Mark Wu, a Harvard Law School professor who previously served as the Director for Intellectual Property in the Office of the U.S. Trade Representative, subsidies not only flow directly from government bodies in Beijing, but also indirectly through informal responses to directives — sometimes even left unsaid, but understood — from the Chinese Communist Party. Against this backdrop, the Asia Society Policy Institute (ASPI) convened two roundtables in the fall of 2019 and the spring of 2020 to discuss how best to build a new rules-based infrastructure that might combat such subsidies and prevent trade-distorting results such as unfair competition, market access barriers, and, above all, overcapacity in global markets. Experts from the private sector, think tanks, governments, and academia weighed in with possible solutions, which included: Negotiating new rules in the WTO; Using the WTO dispute settlement system, despite its often-discussed flaws; Forming ad hoc rules-based approaches, where possible, like the U.S-EU-Japan trilateral initiative; Plurilateral negotiations conducted on a sector-by-sector basis; Forming coalitions of like-minded trading partners to establish an alternative model, much in the way that the Trans-Pacific Partnership (TPP) was framed. During the roundtables, most experts agreed that there is no silver bullet that solves the subsidy and related issues on its own. And most agree that, left unaddressed, the problem is likely to deepen. The COVID-19 pandemic might even exacerbate it by leading to more state involvement in economies around the world and making it hard to discipline Beijing’s practices. Recognizing all of these real challenges that the international trade community faces, the roundtables reached the following key conclusions: Transparency on the scope, level, and nature of industrial subsidies is vital; Efforts to publicize the ongoing work in these areas, particularly that being done by the OECD, should accelerate; Turning research into tangible new policies is a key step; and Persuading China to agree to updated rules will be necessary, given that China is a singular contributor to overcapacity.
Topic:: International Trade and Finance, Treaties and Agreements, Trade, Industry, and WTO
Political Geography:: China, Asia, North America, and United States of America

48. The cross-border impacts of China’s official rate shocks on stock returns of Chinese concepts shares listed on U.S. market

Author:: Dong Weijia
Publication Date:: 02-2020
Content Type:: Working Paper
Abstract:: This paper examines a new cross-border effect of an emerging country’s interest rate changes on the stock returns of its domestic firms listed overseas. First, we discover that the increase in China’s official interest rate greatly affects the NYSE-listed Chinese stocks, thereby suggesting that similar to Chinese domestic investors, the institutional investors in a mature market sometimes exhibit irrational sentiment driven by an emerging economy’s unexpected monetary policy shocks. Second, we highlight some novel asymmetric impacts of China’s official rate changes on Chinese concepts stock prices and reveal that these effects differ from the conventional nonlinear effects of monetary policies. For instance, a bull and bear regime has no statistically significant asymmetric effect on NYSE, whereas interest rate rise has different cross-border impact on Nasdaq and NYSE markets. These interesting findings are mainly driven by the smart investors in the U.S. stock market who are knowledgeable about the differences between NYSE- and Nasdaq-listed stocks and carefully analyze the different impacts of China’s official interest rate changes on the fundamentals of different types of Chinese concepts stocks.
Topic:: International Trade and Finance, Bilateral Relations, and Investment
Political Geography:: China, Asia, North America, and United States of America

49. Work for Others, not Yourself: Globalization, Protectionism and Europe’s Quest for Strategic Autonomy

Author:: Fredrik Erixon
Publication Date:: 10-2020
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: Protectionism and mercantilism are yet again at the centre of global economic policy. “America First” is the guiding ethos in a good part of US international economic policy. Beijing is taking a larger stake in China’s economy and hand out privileges to domestic firms. Europe is increasingly occupied by achieving “strategic autonomy” and to create European champions at the expense of competition. Old and disreputed economic doctrines are getting a new lease on life. Behind this new orientation in international economic policy stands the old idea that a strong economy is an economy not dependent on others. Human prosperity – our story of rags to riches – tells a very different story. Prosperity is generated when people collaborate and improve our collective intelligence. Open economies are much better at creating wealth because they operate by the principle that people should work for others, not themselves. They specialize – and in the process, they get far more dependent on others. Dependency is a factor of success; economic sovereignty is a sure way of depriving people of opportunity and prosperity.
Topic:: International Political Economy, International Trade and Finance, Global Markets, and Strategic Competition
Political Geography:: United States, China, and Europe

50. Learning to Love Trade Again

Author:: Frank Lavin and Oscar Guinea
Publication Date:: 06-2020
Content Type:: Research Paper
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: We are at the moment, the first in seventy-five years, where there is no international consensus in support of trade. Indeed, trade is unloved, unsupported, and even unwanted. There is no shortage of topics in the rhetoric of trade complaints: from the rapid rise of China to Coronavirus as a metaphor for the evils of greater connectivity. Regardless of the validity of these complaints, none of them negate the central truth of trade: countries that engage in trade move ahead, and those that do not, stagnate. Our political leaders disagree. Anti-trade positions are held by leaders across the political spectrum, from Donald Trump to Bernie Sanders. And yet, the public is increasingly warm to the idea of trade. When Gallup asks Americans, “Do you see foreign trade more as an opportunity for economic growth through increased U.S. exports or a threat to the economy from foreign imports?” a record high of 79% see trade as an opportunity, with 18% viewing it as a threat. How did the world arrive at this moment where the benefits of trade are clearly evidenced while trade has become politically toxic? We identify four main factors: (i) U.S. absenteeism from the leadership role; (ii) detachment between trade and security architecture; (iii) no alternative leadership in Europe or elsewhere; and (iv) the cumbersome WTO process. Against this background we put forward five initiatives that will be big enough to count but unobjectionable enough to be adopted. The Big Three. The U.S., EU, and Japan, should establish a consultative body on trade to forge a new approach that allows trade to move ahead in the absence of universal consensus. No harm, no foul. Each of the Big Three should commit to zero tariffs on any item not produced in each particular market. A de minimis strategy. Tariffs should be eliminated on all products where the current tariff is less than 2%. At that level tariffs are simply a nuisance fee. Mind the social costs. Expand the Nairobi Protocols to include health products and green tech. Scrapping import tariffs on medical and green goods would not only encourage additional trade but will also provide health and environmental benefits. Harmonize down. The Big Three should commit that on every tariff line each of the three will be no worse than the next worse. In other words, each of the Big Three will agree to reduce its tariff on every product where it has the highest tariff of the three. These actions will spur the WTO, not undermine it. The measures we propose can be set up on a plurilateral basis that would allow other trading powers to participate. By breaking away from the tyranny of universal consensus, these actions will encourage the trading community – including the WTO – to get back in forward motion. In some respect, convergence between the Big Three is already happening. The EU and Japan signed an FTA that lowers import tariffs between these two economies, while the U.S. and Japan agreed to negotiate a comprehensive FTA. And if China is willing to step up? China should be welcomed into this group if it supports the four initiatives, changing the Big Three to the Big Four.
Topic:: International Political Economy, International Trade and Finance, Global Markets, Trade, and WTO
Political Geography:: United States, Japan, China, Europe, and Global Focus

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COLUMBIA UNIVERSITY PRESS