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22. China's Political-Economy, Foreign and Security Policy: 2023
- Author:
- Center for China Analysis
- Publication Date:
- 01-2023
- Content Type:
- Working Paper
- Institution:
- Asia Society
- Abstract:
- It has now been three months since the 20th Party Congress convened in Beijing on October 15. While the Congress set Xi Jinping’s ideological, strategic, and economic direction for the next five years, much has happened since then that the Chinese leadership did not anticipate. Principal among these surprises was the spontaneous eruption in late November of public protests across multiple Chinese cities against the economic and social impact of the Chinese Communist Party’s “dynamic zero-COVID” policy. These protests resulted in an unprecedented U-turn on December 8 from China’s relentless pursuit of its three-year-long national pandemic containment strategy to the Party now seeking desperately to restore economic growth and social calm. This shift has in turn generated major public pressures on the Chinese health system as hospitals struggle to cope with surging caseloads and mortalities. All of these developments stand in stark contrast to the political, ideological, and nationalist self-confidence on display at the 20th Party Congress. In October, Xi Jinping swept the board by removing any would-be opponents from the Politburo and replacing them with long-standing personal loyalists. Xi also proclaimed China’s total victory over COVID-19, contrasting the Party’s success with the disarray its propaganda apparatus had depicted across the United States and the collective West. Despite faltering economic growth, Xi had doubled down in his embrace of a new, more Marxist approach to economic policy which prioritized planning over the market, national self-sufficiency over global economic integration, the centrality of the public sector over private enterprise, and a new approach to wealth distribution under the rubric of the Common Prosperity doctrine. At the same time, Xi’s 2022 Work Report, delivered at the Congress, abandoned Deng Xiaoping’s long-standing foreign policy framework that “peace and development are the principal themes of the time” and instead warned of growing strategic threats and the need for the military to be prepared for war. As part of a continuing series on China’s evolving political economy and foreign policy, this paper’s purpose is threefold: to examine the political and economic implications of this dramatic change in China’s COVID-19 strategy; to analyze what, if any, impact it may have on China’s current international posture; and to assess whether this represents a significant departure from the Party’s strategic direction set at the 20th Party Congress last October. The paper concludes that the Party changed course on COVID-19 for two reasons: (1) it feared that not doing so would threaten its unofficial social contract with the Chinese people based on long-term improvements in jobs and living standards; and (2) that a structural slowdown in growth could also undermine China’s long-term strategic competition against the United States. This paper also concludes that the stark nature of the December 8 policy backflip, together with the Chinese health system’s lack of preparedness for it, has dented Xi Jinping’s political armor for the medium term. This setback comes on top of internal criticism of Xi’s broader ideological assault on the Deng-Jiang-Hu historical economic growth formula that Xi has prosecuted since 2017, as well as Xi’s departure from Deng’s less confrontational foreign policy posture that characterized previous decades. Nonetheless, these policy errors remain manageable within Chinese elite politics, where Xi still controls the hard levers of power. Furthermore, many of these changes on both the economy and external policy are more likely to be short-to-medium term and therefore tactical in nature, rather than representing a strategic departure from the deep ideological direction laid out for the long-term in Xi’s October 2022 Work Report. While these changes to current economic and foreign policy settings are significant in their own right, there is no evidence to date that Xi Jinping’s ideological fundamentals have changed.
- Topic:
- Security, Foreign Policy, Political Economy, and COVID-19
- Political Geography:
- China and Asia
23. Taiwan Strait Crises: Island Seizure Contingencies
- Author:
- Andrew Chubb
- Publication Date:
- 02-2023
- Content Type:
- Working Paper
- Institution:
- Asia Society
- Abstract:
- Conflict across the Taiwan Strait could disrupt East Asia’s extensive trade links, sever global production chains, generate serious shocks to regional economies, upend Asia’s security architecture, and, potentially, escalate into a catastrophic superpower war. Many regional states — including U.S. allies — are beginning to seriously consider how they would respond to a potential use of force by the People’s Republic of China (PRC). But analytic attention has focused overwhelmingly on the worst-case scenario of a PRC invasion, largely ignoring more likely contingencies calculated to stay below the threshold of lethal force. It is in this “gray zone” that the PRC has made strategic advances in the East and South China Seas in recent years. This paper argues that, compared with an invasion or blockade of Taiwan’s main island, an operation to capture one or more offshore islands currently controlled by the Republic of China (ROC or Taiwan) would offer Beijing considerable advantages. In an immediate tactical sense, it would offer Beijing greater flexibility and escalation control, lower risk of civilian casualties, and less likelihood of sparking a strong Taiwanese response or U.S. intervention. Strategically, such an operation could open up an array of options for further probes, faits accomplis, information gathering, and coercive pressure on ROC forces—and, in the case of the Penghu (Pescadores) Islands, substantial opportunities for enhanced surveillance, reconnaissance, and logistical support for a future invasion of the main island. Domestically, in contrast with a bloody and potentially catastrophic all-out invasion or a blockade that would risk conflict with the United States, outlying island seizure could offer Beijing a low-risk yet highly symbolic rallying point in a period of likely economic struggles and rising social dissatisfaction. Policymakers and strategists on all sides of politics in Taiwan, the United States and elsewhere need to carefully consider how they would respond to such contingencies, in order to enable an effective international response.
- Topic:
- Foreign Policy, Territorial Disputes, Geopolitics, and Regional Politics
- Political Geography:
- China, Taiwan, and Asia
24. General Equilibrium Analysis of Cost-Effectiveness and Distributional Impacts of China’s Nationwide CO2 Emissions Trading System
- Author:
- Xianling Long, Da Zhang, Lawrence Goulder, and Chenfei Qu
- Publication Date:
- 03-2023
- Content Type:
- Special Report
- Institution:
- Asia Society
- Abstract:
- China introduced the world's largest emissions trading system in 2021 which is intended to help cost-effectively achieve its pledges of reaching a peak in CO2 emissions before 2030 and carbon neutrality before 2060. The system is a tradable performance standard (TPS) with a bottom-up intensity-based emissions cap, unlike a top-down absolute cap approach commonly used globally. General Equilibrium Analysis of Cost-Effectiveness and Distributional Impacts of China’s Nationwide CO2 Emissions Trading System developed and applied a multi-sector, multi-period general equilibrium model to assess the emissions, energy mix, and economic impacts of a series of options for the future development of this policy. These included cap-setting, benchmark design, auction design, and sectoral expansion, with valuable insights provided on the potential future evolution of this policy.
- Topic:
- Climate Change, Economy, Trade, and Carbon Emissions
- Political Geography:
- China and Asia
25. The Transition From an Intensity to an Absolute Emissions Cap in China’s National Emissions Trading System
- Author:
- Duan Maosheng
- Publication Date:
- 03-2023
- Content Type:
- Working Paper
- Institution:
- Asia Society
- Abstract:
- The unique characteristics of China's economic development and electricity marketization have resulted in the implementation of a bottom-up intensity-based emissions cap in China’s national emissions trading system (ETS) in its early stages. However, the efficacy of the bottom-up cap-setting approach remains controversial, particularly with regard to achieving emission reduction goals and cost-effectiveness. In response to China's "dual carbon" targets and updated Nationally Determined Contributions (NDC), China’s national ETS shall gradually shift towards a real cap-and-trade system, with a transition period when a hybrid system, which has an absolute control cap beside the intensity cap, is implemented. The Transition from an Intensity to an Absolute Emissions Cap in China’s National Emissions Trading System examines the cap-setting approaches used in ETSs in China, the underlying reasons for choosing intensity caps in China, and major issues related to the transition from an intensity cap to an absolute cap in China’s national ETS.
- Topic:
- Climate Change, Economy, Trade, and Carbon Emissions
- Political Geography:
- China and Asia
26. Economic and Environmental Impacts of China’s New Nationwide CO2 Emissions Trading System
- Author:
- Lawrence Goulder, Xianling Long, Chenfei Qu, and Da Zhang
- Publication Date:
- 05-2023
- Content Type:
- Working Paper
- Institution:
- Asia Society
- Abstract:
- China’s National Emissions Trading System (ETS) has already become the world’s largest ETS and is expected to contribute substantially toward meeting China’s pledge to peak its carbon emissions before 2030 and achieve carbon neutrality before 2060. The new system is based on a tradable performance standard (TPS), a rate-based system under which each covered facility receives from the government in each compliance period a certain number of emissions allowances based on its output and the government’s assigned “benchmark” ratio of emissions per unit of output. Economic and Environmental Impacts of China’s New Nationwide CO2 Emissions Trading System describes the results from a multi-sector multi-period general equilibrium model designed to assess the potential economic, energy mix, and emissions impacts of different future policy options under China’s National ETS over the period 2020–2035, by sector and province and in the aggregate
- Topic:
- Environment, Economy, Trade, and Carbon Emissions
- Political Geography:
- China and Asia
27. De-risking authoritarian AI: A balanced approach to protecting our digital ecosystems
- Author:
- Simeon Gilding
- Publication Date:
- 07-2023
- Content Type:
- Special Report
- Institution:
- Australian Strategic Policy Institute (ASPI)
- Abstract:
- Artificial intelligence (AI)–enabled systems make many invisible decisions affecting our health, safety and wealth. They shape what we see, think, feel and choose, they calculate our access to financial benefits as well as our transgressions, and now they can generate complex text, images and code just as a human can, but much faster. So it’s unsurprising that moves are afoot across democracies to regulate AI’s impact on our individual rights and economic security, notably in the European Union (EU). But, if we’re wary about AI, we should be even more circumspect about AI-enabled products and services from authoritarian countries that share neither our values nor our interests. And, for the foreseeable future, that means the People’s Republic of China (PRC)—a revisionist authoritarian power demonstrably hostile to democracy and the rules-based international order, which routinely uses AI to strengthen its own political and social stability at the expense of individual human rights. In contrast to other authoritarian countries such as Russia, Iran and North Korea, China is a technology superpower with global capacity and ambitions and is a major exporter of effective, cost-competitive AI-enabled technology into democracies.
- Topic:
- Security, Science and Technology, Authoritarianism, Cybersecurity, and Artificial Intelligence
- Political Geography:
- China and Asia-Pacific
28. Countering China’s coercive diplomacy: Prioritising economic security, sovereignty and the rules-based order
- Author:
- Fergus Hunter, Daria Impiombato, Yvonne Lau, Adam Triggs, Albert Zhang, and Urmika Deb
- Publication Date:
- 02-2023
- Content Type:
- Special Report
- Institution:
- Australian Strategic Policy Institute (ASPI)
- Abstract:
- The People’s Republic of China (PRC) is increasingly using a range of economic and non-economic tools to punish, influence and deter foreign governments in its foreign relations. Coercive actions have become a key part of the PRC’s toolkit as it takes a more assertive position in international disputes and seeks to reshape the global order in its favour. This research finds that the PRC’s use of coercive tactics is now sitting at levels well above those seen a decade ago, or even five years ago. The year 2020 marked a peak, and the use of trade restrictions and state-issued threats have become favoured methods. The tactics have been used in disputes over governments’ decisions on human rights, national security and diplomatic relations.
- Topic:
- Diplomacy, Sovereignty, Economic Security, and Coercion
- Political Geography:
- China and Asia
29. Seeking to undermine democracy and partnerships: How the CCP is influencing the Pacific islands information environment
- Author:
- Blake Johnson and Joshua Dunne
- Publication Date:
- 03-2023
- Content Type:
- Policy Brief
- Institution:
- Australian Strategic Policy Institute (ASPI)
- Abstract:
- The Chinese Communist Party (CCP) is conducting coordinated information operations in Pacific island countries (PICs). Those operations are designed to influence political elites, public discourse and political sentiment regarding existing partnerships with Western democracies. Our research shows how the CCP frequently seeks to capitalise on regional events, announcements and engagements to push its own narratives, many of which are aimed at undermining some of the region’s key partnerships. This report examines three significant events and developments: the establishment of AUKUS in 2021 the CCP’s recent efforts to sign a region-wide security agreement the 2022 Pacific Islands Forum held in Fiji. This research, including these three case studies, shows how the CCP uses tailored, reactive messaging in response to regional events and analyses the effectiveness of that messaging in shifting public discourse online. This report also highlights a series of information channels used by the CCP to push narratives in support of the party’s regional objectives in the Pacific. Those information channels include Chinese state media, CCP publications and statements in local media, and publications by local journalists connected to CCP-linked groups.1
- Topic:
- Science and Technology, Partnerships, Democracy, Social Media, Disinformation, and Chinese Communist Party (CCP)
- Political Geography:
- China, Asia, and South Pacific
30. China, climate change and the energy transition
- Author:
- Professor Xu Yi-Chong
- Publication Date:
- 03-2023
- Content Type:
- Working Paper
- Institution:
- Australian Strategic Policy Institute (ASPI)
- Abstract:
- This report surveys China’s enormous energy transition to renewables. It begins by sketching the energy challenges China faces and its climate-change-related energy policies, in the context of the global geopolitics of the energy transformation. Next the report focuses on conventional energy sources (oil and natural gas), followed by electricity, and energy technologies. Although the report is intended primarily to survey developments to date, it concludes with some brief observations about the considerable energy challenges China faces in the years ahead.
- Topic:
- Security, Climate Change, Development, Energy Policy, and Energy Transition
- Political Geography:
- China and Asia