Political Geography: China / Publication Year: within 5 Years / Topic: Economics

1. ASEAN's medium- to long-term trade strategies and the direction of RoK-ASEAN cooperation

Author:: Sungil Kwak, Seungjin Cho, Jaewan Cheong, Jaeho Lee, Mingeum Shin, Nayoun Park, and So Eun Kim
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: In recent years, the U.S.-China hegemony competition has intensified, dividing the world into two blocs. ASEAN has long culti-vated its position on the international stage by maintaining a certain distance between the United States and China. In that sense, ASEAN is the best partner for Korea to ef-fectively respond to the divided world. Therefore, this study seeks the directions of cooperation with ASEAN in supply chain, digital trade, climate change response, and health and development cooperation in line with changes in the international order.
Topic:: Climate Change, Development, Economics, International Cooperation, Trade, and ASEAN
Political Geography:: China, Asia, North America, and United States of America

2. Strategies of Multinational Companies Entering China in the Era of U.S.-China Competition and Implications for Korea

Author:: Sang Baek Hyun, Ji Young Moon, Min-suk Park, Jonghyuk Oh, and Yunmi Oh
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: With the integration of resources and markets around the world sparked by the trend of globalization, multinational companies have continued to grow at a rapid pace. In particular, global manufacturers have maintained their competitiveness by distributing resources more efficiently while establishing a global value chain with China as their main production hub. However, measures taken by the U.S. to block China’s access to technology and supply chains in some high-tech industries have prompted discussions on reorganization of the global supply chain, placing these multinational companies in an uncertain situation concerning their operations in China. At a time when competition between the U.S. and China is intensifying, it is necessary to look at the response strategies of global companies that have entered China and seek effective countermeasures for Korean companies.
Topic:: Economics, Multinational Corporations, Manufacturing, and Competition
Political Geography:: China, Asia, South Korea, North America, and United States of America

3. Why the proposed Brussels buyers club to procure critical minerals is a bad idea

Author:: Cullen Hendrix
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: Concerned about critical mineral supply chains and its own strategic vulnerabilities, the European Union is advancing a buyers club to procure minerals critical to the clean energy transition, such as bauxite, cobalt, lithium, and nickel. The European Union is deeply dependent on imports of both raw and processed critical minerals and materials and thus highly exposed to global price volatility. The door appears to be open for the United States or other EU trading partners and like-minded countries to join this club. Decarbonization is not the only impetus behind the proposed Brussels buyers club. Both the European Union and United States view China’s dominance of critical mineral supply chains as a national security issue, because these minerals are key inputs to modern military technology. Hendrix agrees that supply chains for critical minerals desperately need widening to meet projected global demand and tackle climate change mitigation, but he warns that a purchasers club would not be a step in the right direction. A buyers club would be prone to free riding, set up distributive conflicts within the European Union, and reduce the share of climate mitigation benefits accruing to critical mineral–producing countries, many of which are developing and middle-income economies.
Topic:: Economics, National Security, European Union, Supply Chains, and Minerals
Political Geography:: China and Europe

4. Will China's impending overhaul of its financial regulatory system make a difference?

Author:: Martin Chorzempa and Nicolas Véron
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: China's reshuffle of its financial supervisory architecture announced in March, like previous changes, appears incremental rather than radical. It will not, however, resolve the main challenge hobbling China’s financial system, which is not linked to specific choices of supervisory architecture but rather to the unfinished transition from a state-directed to a market-based financial system and the way the Chinese Communist Party's pervasive role creates obstacles to good corporate governance of individual financial firms and to the independence of supervisory authorities. Too often, political authorities and sometimes the supervisors themselves intervene directly in financial firms’ decisions to allocate capital and credit, occasionally resulting in failures of risk control and risk management. The authors argue that Chinese reformers should aim at a clearer and more rigorous division of responsibilities, in which financial firms manage financial opportunities and risks, and supervisors are exclusively focused on their respective public policy mandates.
Topic:: Economics, Regulation, Finance, and Corporate Governance
Political Geography:: China and Asia

5. 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

6. US-China Effort to Set “Guardrails” Fizzles with Balloon Incident

Author:: Sourabh Gupta
Publication Date:: 05-2023
Content Type:: Journal Article
Journal:: Comparative Connections
Institution:: Pacific Forum
Abstract:: The proposed “guardrail” that Joe Biden and Xi Jinping sought to erect last fall in Bali failed to emerge in the bitter aftermath of a wayward Chinese surveillance balloon that overflew the United States and violated its sovereignty. Though Antony Blinken and Wang Yi met on the sidelines of the Munich Security Conference afterward, aspersions cast by each side against the other, including a series of disparaging Chinese government reports, fed the chill in ties. Taiwan President Tsai Ing-wen’s meeting with House Speaker Kevin McCarthy during the return leg of her US transit added to bilateral and cross-strait tensions and were met with Chinese sanctions. Issues pertaining to Taiwan, be it arms sales or a speculated Chinese invasion date of the island, remained contentious. The administration’s attempt to restart constructive economic reengagement with China, including via an important speech by US Treasury Secretary Janet Yellen, appears to have fallen on deaf ears in Beijing. Following the Biden-Xi meeting on Nov. 14 on the sidelines of the G20 Leaders Summit in Bali, Indonesia, US-People’s Republic of China relations were transitioning to an improving track—or so it seemed. US Defense Secretary Lloyd Austin met with his Chinese counterpart, Defense Minister Wei Fenghe, on the sidelines of the ASEAN Defense Ministers” Meeting-Plus meeting in Cambodia on Nov. 22. On Dec. 11-12, US Assistant Secretary of State for East Asian and Pacific Affairs Daniel Kritenbrink held “candid, in-depth and constructive” talks in Beijing. On Jan. 18, Secretary Yellen had a “candid, substantive, and constructive conversation” with departing Vice-Premier Liu He in Zurich ahead of the World Economic Forum in Davos. Hours before Secretary Blinken was due to board a flight to Beijing on Feb. 3, which would have been the highest-ranking contact between the two sides since the Bali meeting, the budding rapprochement came to a screeching halt.
Topic:: Security, Foreign Policy, Economics, and Bilateral Relations
Political Geography:: China, Asia, North America, and United States of America

7. Japan-China Relations: A Period of Cold Peace?

Author:: June Teufel Dreyer
Publication Date:: 01-2023
Content Type:: Journal Article
Journal:: Comparative Connections
Institution:: Pacific Forum
Abstract:: In the sole high-level meeting in the reporting period, on the sidelines of the APEC meeting in Bangkok in November, General Secretary/President Xi Jinping and Prime Minister Kishida Fumio essentially talked past each other. At an earlier ASEAN+3 meeting in Phnom Penh, Premier Li Keqiang and Kishida not only talked past each other but pointedly walked past each other. There was no resolution of major issues: the Chinese position is and remains that Taiwan is a core interest of the PRC in which Japan must not interfere. Japan counters that a Chinese invasion would be an emergency for Japan. On the islands known to the Chinese as the Diaoyu and to the Japanese as the Senkaku, Tokyo considers them an integral part of Japan on the basis of history and international law while China says the islands are part of China. On jurisdiction in the East China Sea, Japan says that demarcation should be based on the median line and that China’s efforts at unilateral development of oil and gas resources on its side of the median are illegal. Beijing does not recognize the validity of the median line. Economically, a number of Japanese industries have been decoupling from China out of concern for the integrity of their supply chains and for security reasons while others are planning to expand operations there. Both sides continued their respective defense buildups while accusing the other of military expansionism.
Topic:: Security, Defense Policy, Diplomacy, Economics, Politics, and Bilateral Relations
Political Geography:: Japan, China, and Asia

8. US Trade Policy Options for Pacific Islands States Require Washington’s Political Commitment

Author:: Marcus Noland
Publication Date:: 07-2023
Content Type:: Special Report
Institution:: East-West Center
Abstract:: The Pacific Islands have emerged as a zone of contestation in the ongoing rivalry between China and the United States. While the US has long been the dominant military power in the region, China is raising its profile through activities like port visits, military exercises, and establishing diplomatic and security ties with regional states like Kiribati and the Solomon Islands. In 2018, Chinese leader Xi Jinping visited Papua New Guinea for the Asia Pacific Economic Cooperation (APEC) summit. President Biden was supposed to visit PNG in May 2023, in the first ever visit of a sitting US president to the Pacific Islands, but that trip was scuttled due to the debt ceiling fiasco in Washington. In the economics sphere, the US has attempted to counter China’s Belt and Road Initiative (BRI) together with Japan and Australia through the Blue Dot Network and the Indo-Pacific Infrastructure Trilateral to promote high-quality, transparent, and sustainable infrastructure development. The region contains considerable natural resources, and the US has been working with Pacific Island nations to promote sustainable resource management, in contrast to China’s alleged illegal, unreported, and unregulated fishing in the Pacific. What has been missing, however, is a trade policy component to the US strategy to counterbalance China’s exploration of a free trade agreement with the Pacific Islands Forum (PIF).
Topic:: Foreign Policy, Economics, Politics, and Trade Policy
Political Geography:: China, North America, United States of America, and Pacific Islands

9. China Is Finally Making Progress on the China-Kyrgyzstan-Uzbekistan Railway

Author:: Niva Yau
Publication Date:: 03-2023
Content Type:: Commentary and Analysis
Institution:: Foreign Policy Research Institute
Abstract:: Since the 1990s, China has tried to build the China-Kyrgyzstan-Uzbekistan (CKU) railway. The railway would advance China’s geopolitical and economic interests in Central Asia. Until recently, China has been unable to overcome opposition to the project in Kyrgyzstan and Uzbekistan. However, local concerns about the railway may be giving way since Russia’s war in Ukraine has made new trade routes bypassing Russia more profitable, and a new Uzbek government is looking to expand regional and international engagement.
Topic:: Economics, Infrastructure, Geopolitics, and Russia-Ukraine War
Political Geography:: China, Central Asia, Asia, Kyrgyzstan, and Uzbekistan

10. The “Odious” Legacy of Chinese Development Assistance in Africa: The Case of Angola

Author:: Rafael Marques de Morais and Thomas J. Duesterberg
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Hudson Institute
Abstract:: Within days of taking office, China’s new foreign minister, Qin Gang, was on a plane to his country’s main African client: Angola. Landing in Luanda on January 12, Qin Gang was ostensibly bringing a gift—a $250 million loan to help Angola expand high-speed broadband. Some gifts, however, are not what they seem, and some of the recent financial gifts from Chinese sources have been toxic. Soon after Qin visited Angola, US Treasury Secretary Janet Yellen traveled to three African countries but skipped Angola, possibly because of its checkered history with Chinese development assistance. The case of Angola raises questions about the extent and nature of Chinese loans and infrastructure aid to a growing number of African nations, as well as the consequences of such loans on those countries’ relations with the US.
Topic:: Foreign Policy, Economics, Infrastructure, Trade, Development Assistance, and Loans
Political Geography:: Africa, China, Angola, and United States of America

11. Campaigning to Dissuade: Applying Emerging Technologies to Engage and Succeed in the Information Age Security Competition

Author:: Bryan Clark and Dan Patt
Publication Date:: 07-2023
Content Type:: Special Report
Institution:: Hudson Institute
Abstract:: The People’s Republic of China (PRC) presents the United States with its most comprehensive economic and security rival since Great Britain during the nineteenth century. Starting in 2018, US defense strategies have highlighted the threat that the PRC poses to US allies, and successive presidential administrations and Congresses responded by increasing defense budgets to expand US military capability and capacity. Despite these efforts, numerous assessments now show that modernization of the People’s Liberation Army (PLA) has eroded—and in some missions overcome—US military superiority. Absent large and politically fraught increases in defense spending, continued expansion and improvement of today’s US force are unlikely to regain broad overmatch against the PLA in the Western Pacific. Instead, the United States will need new strategies and operational concepts to deter PRC aggression. Recognizing this imperative, the 2022 US National Defense Strategy (NDS) attempted to move in a different direction from its predecessors through two new lines of effort called “campaigning” and “integrated deterrence.” However, in unclassified documents and speeches by defense officials, both the essence of integrated deterrence and the mechanism of campaigning remain unclear. 1 Emerging technologies offer the US military a way to put these new concepts into action, sustaining its ability to prevent conflict and gaining an upper hand in the strategic competition with China despite the PLA’s “home team” advantages. The United States remains the world leader in operational and technological innovation, as evidenced by decades of advancements in networking and computing—marked recently by the rapid commercialization of artificial intelligence (AI). Building on the 2022 NDS, this report proposes a strategy for campaigning that would exploit information technologies to dissuade China from pursuing acts of aggression against allies such as Taiwan. The primary objective of the proposed campaigning model is to shape PRC government decision-making, especially that of the PRC military, in ways that are conducive to long-term regional stability and prosperity. A whole-of-government effort like that implied by the 2022 NDS would be the most effective form of campaigning because it could exploit the PRC government’s numerous vulnerabilities, from its appalling record on human rights to its loss of economic momentum and its growing demographic challenges. However, this report focuses on actions the US military can take by itself or with allied militaries to dissuade future PRC aggression. In the proposed approach, campaigning is an ongoing sequence of probing, signaling, adapting, and acting by the US military and intelligence community, coupled with and informed by instrumentation of the information environment. In addition to demonstrating US resolve, campaigning should enable the US to estimate competitor habits, preferences, and fears. These estimates would guide future campaigning activities and inform US force planners regarding a competitor’s uncertainty and areas of concern. Armed with increasing insight about adversary beliefs, campaigning actions would aim to shape an opponent’s preferences and priorities away from violent paths to their goals and toward scenarios that are more aligned with US interests. In offering an approach to dissuasion, this report diverges from the strategy of deterring war primarily through threats of denial or punishment. This construct has dominated US defense strategy since the Soviet Union collapsed because conventional dominance enabled the US military to credibly stop or reverse an act of aggression and nuclear weapons provided the capability to impose existential punishment. Today, the PRC’s status as a peer competitor makes denial and punishment less credible. The US government will instead need to prevent conflict before it becomes imminent.
Topic:: Security, Defense Policy, Economics, Science and Technology, Strategic Competition, and Emerging Technology
Political Geography:: China, North America, Asia-Pacific, and United States of America

12. Continuismo, contra reacción y triangulación: el desembarco de China en América Latina y la coexistencia de líneas de acción exterior de España hacia la región

Author:: Javier Martín Merchán
Publication Date:: 01-2023
Content Type:: Journal Article
Journal:: Revista UNISCI/UNISCI Journal
Institution:: Unidad de investigación sobre seguridad y cooperación (UNISCI)
Abstract:: Las relaciones entre España y América Latina siempre han conformado un pilar en la estrategia de integración internacional del país ibérico. No obstante, ante la singular coyuntura que supone el auge exponencial de China en la región latinoamericana, ¿qué riesgos afronta hoy España en América Latina? ¿Ha influido dicha coyuntura en las líneas maestras de acción exterior de España hacia la región? Este artículo arroja algo de luz en torno a tales preguntas, y su conclusión es doble. Por un lado, sugiere que el desembarco chino supone un serio desafío para España. Por otro, se sostiene que la política exterior española ha hecho coexistir tres tipos de actitudes como respuesta: una más continuista, otra que capitaliza esta nueva coyuntura y busca aprovechar sus oportunidades, y una última más reactiva a las amenazas que suscitaría la pujanza china en América Latina.
Topic:: International Relations, Foreign Policy, Economics, Politics, and Trade
Political Geography:: China, Latin America, and Spain

13. Perú entre Estados Unidos y China: Adaptación de la política exterior peruana de cara a las divergencias chino-estadounidenses

Author:: Bruno Macciotta Pulisci and Pablo Biderbost
Publication Date:: 01-2023
Content Type:: Journal Article
Journal:: Revista UNISCI/UNISCI Journal
Institution:: Unidad de investigación sobre seguridad y cooperación (UNISCI)
Abstract:: Desde hace un tiempo China viene compitiendo con Estados Unidos por una posición dominante en el mundo. La competencia es, sobre todo económica, aunque implica, por supuesto, aspectos también políticos, sociales y militares. Una de las regiones más disputadas es, sin duda, América Latina, en la que Estados Unidos pierde cada vez más terreno y China se posiciona como el mayor socio comercial. En este contexto, los países latinoamericanos han tenido que reconfigurar sus políticas exteriores para poder satisfacer sus expectativas de la mano de quien le ofrezca mejores posibilidades. Perú no ha sido una excepción y, de hecho, se ha acercado en los últimos años más a China como principal socio comercial, aunque no ha soltado la mano de Estados Unidos del todo. El presente artículo explora cómo se ha reconfigurado la política exterior peruana de cara a la competencia entre China y Estados Unidos.
Topic:: Foreign Policy, Economics, Trade, and Strategic Competition
Political Geography:: China, South America, Peru, and United States of America

14. Exploring the Interplay between Trade and Industrial Policies and the Impact of Geopolitics on the Transformation of Taiwan’s Economy

Author:: Ying-Jun Lin
Publication Date:: 10-2023
Content Type:: Journal Article
Journal:: Revista UNISCI/UNISCI Journal
Institution:: Unidad de investigación sobre seguridad y cooperación (UNISCI)
Abstract:: Over the past five decades, Taiwan's economy has shifted from inward-oriented to outward-oriented, from an import-substitution policy to an export-expansion policy. This evolution in economic structure has also brought about changes in the industrial landscape. While there is an ongoing debate about the respective roles of the market and the government in promoting Taiwan's economic growth, this article argues that the history of Taiwan's economy demonstrates a mutually beneficial relationship between trade and industrial policies. The integration of market forces and government intervention has played a crucial role in Taiwan's economic success story. However, the dynamics between the United States and China, as well as the emergence of new Asian regionalism, pose challenges to Taiwanese industries and enterprises. In conclusion, this article emphasises the importance of refining trade and industrial policies in line with the geopolitical context in order to maintain the momentum of Taiwan's economy.
Topic:: Economics, Bilateral Relations, Trade, and Dependency
Political Geography:: China, Taiwan, Asia, and United States of America

15. Resisting China’s Gray Zone Military Pressure on Taiwan

Author:: Jacob Stokes
Publication Date:: 12-2023
Content Type:: Special Report
Institution:: Center for a New American Security (CNAS)
Abstract:: The People’s Republic of China (PRC or China) has sharply escalated its pressure campaign targeting the Republic of China (ROC or Taiwan) in recent years. Beijing appears likely to use Taiwan’s upcoming presidential election in January 2024 as a pretext to apply more pressure on the self-governing island, particularly in the “gray zone” using China’s military, the People’s Liberation Army (PLA), along with other tools of state power. There is no precise and commonly agreed upon definition of what gray zone activities are and are not. In general, though, the concept refers to actions that fall into the space between, on one side, peace and, on the other, full-scale kinetic war.1 Gray zone activities are coercive and aggressive but designed to stay below the threshold of triggering major conflict. China uses gray zone operations as part of a comprehensive strategy to pressure Taiwan that spans the areas of diplomacy, information, economics, and security. This policy brief examines one major component of that campaign: gray zone military and security operations. It starts by detailing the capabilities and tactics China uses to put security pressure on Taiwan. Then, it explains what Beijing seeks to achieve with those actions. The paper concludes with recommendations for how U.S. and Taiwan policymakers can resist and counter China’s gray zone operations.
Topic:: Security, Foreign Policy, Defense Policy, Diplomacy, Economics, Military Affairs, and Information
Political Geography:: China, Taiwan, and Asia

16. Is there Eurasian Connectivity without Europe?

Author:: Niva Yau
Publication Date:: 12-2023
Content Type:: Journal Article
Journal:: Fletcher Security Review
Institution:: The Fletcher School, Tufts University
Abstract:: Tucked between Russia, Iran, and China, Central Asia is now desperately looking for solutions to cushion the impacts of global tension on its fragile economies, which are deeply tied to sanctions against Russia and a local production slowdown as China recovers from its zero COVID policy. While European diplomacy has come at a crucial time, its Central Asian policy is ambiguous, and commitments misplaced. Central Asia is continuously perceived by the EU as a region in need of developmental assistance, which leads to European regional policies that focus on digitalization and climate issues. What Central Asia needs is the establishment of concrete logistical connectivity that will enable efficient flow of products across Eurasia.
Topic:: Climate Change, Diplomacy, Economics, European Union, Connectivity, and Digitalization
Political Geography:: Russia, China, Europe, Iran, Central Asia, Eurasia, and Asia

17. Decoding China’s Dilemma: The Difficulties Of Economic Reform

Author:: Sunny Cheung
Publication Date:: 12-2023
Content Type:: Journal Article
Journal:: China Brief
Institution:: The Jamestown Foundation
Abstract:: On November 27, the State Council of the People’s Republic of China (PRC) unveiled a new policy, titled “Notice on Strengthening Financial Support Measures for the Private Economy (关于强化金融支持举措助力民营经济发展壮大的通知)” (People’s Bank of China, November 27). The notice introduces a set of 25 measures crafted to reinvigorate the private sector. These prioritize key areas such as technological innovation, green initiatives, and primary support for small to medium-sized enterprises. The package includes increasing financial assistance and gradually enhancing the proportion of loans to private businesses. It underscores the importance of facilitating credit, lowering interest rates, issuing bonds, and other kinds of financial instruments to meet the varied financing needs of private enterprises. This policy measure echoes mandates put forth during the 20th Party Congress in October 2022 and Central Financial Work Conference held at the end of October 2023 in response to China’s deepening economic woes (Xinhua, November 1). This backdrop has prompted policies aimed at addressing the challenges facing the Chinese economy. In October, the PRC National Bureau of Statistics announced that the Consumer Price Index (CPI) fell by 0.2 percent year-on-year—worse than expected and marking a contraction since July (RTHK, November 9). This ominous data, which includes price deflation for both July and October this year, is indicative of significant weakness in domestic demand, particularly due to the underperforming real estate market, which affects citizens’ expectations for asset prices. The ongoing economic downturn in China also refutes the notion that economic chaos would clear up after the abandonment of the Zero-Covid policy. This situation is also similar to the Japan-style recession in the 90s in which consumption and investment are further repressed in favor of paying down debt. China’s recent response has been to implement a series of economic stimulus measures in an attempt to revive its weakening national economy.
Topic:: Economics, Reform, Business, and Banking
Political Geography:: China and Asia

18. The Chinese Debate on Economic Reform

Author:: Arran Hope
Publication Date:: 09-2023
Content Type:: Journal Article
Journal:: China Brief
Institution:: The Jamestown Foundation
Abstract:: A steady drumbeat of ominous data and troubling commentary on the state of China’s economy has punctuated the summer months. Reports from the commentariat in the anglosphere have provided diagnostic analysis and detailed potential policy solutions that the Chinese government might pursue. However, China’s central decision makers in the Politburo or in the National Development and Reform Commission (NDRC), are more likely to take their cues from internal advisors and domestic experts within the PRC than from those outside. As such, one fruitful exercise is to take the temperature of voices within the system to determine the extent to which their perceptions align or diverge from those in the West, and to ascertain which views carry weight with the final arbiters of economic policy in Beijing. By doing so, analysts outside of China may better comprehend the future (mis)steps that China will take as it struggles to achieve its aim of “basically realizing socialist modernization.” In July, the Chinese government held several meetings and released documents pertaining the economy. On July 24 the Politburo met to discuss the economy as it usually does this time of year. But on the same day, a 17-point plan was issued by the NDRC, following on from a 31-point plan co-issued by the State Council and the Central Committee ten days prior. These send a clear message about the concern in government over China’s straitened circumstances. Indeed, just this week, the NDRC announced a new “private economy development bureau” to further support private industry (NDRC, September 4). The assessment of the situation is put bluntly in the Politburo readout: “the current economic system is facing new challenges… insufficient domestic demand, difficulties in some enterprise’s operations, multiple risks in key areas, and a complex and severe external environment.”
Topic:: Development, Economics, and Reform
Political Geography:: China and Asia

19. A Belt and Road to Nowhere? Italy on the Frontlines of Europe’s Changing Strategy Toward China

Author:: Andrew R. Novo
Publication Date:: 08-2023
Content Type:: Journal Article
Journal:: China Brief
Institution:: The Jamestown Foundation
Abstract:: During her tenure as Prime Minister, Giorgia Meloni has been far more active on the international scene than most observers predicted. Within the first ten months of her tenure, she has traveled to capitals across Europe, Asia, and North Africa and has hosted numerous foreign leaders on official visits. In July, Meloni visited Washington, D.C. where she and President Biden affirmed their commitment to deepening collaboration across various areas of shared interests. Meloni’s foreign policy agenda has touched on a range of issues including, but not limited to, European security, migration, energy policy, and international trade. It is on this last issue that Italy’s decision-making might be most impactful. As the Meloni administration reassesses its economic partnerships around the world, Italy’s relations—and by extension the European Union’s (EU) overarching position—towards the People’s Republic of China (PRC) could witness lasting changes. At the heart of the new government’s economic policy lies its choice of whether to withdraw from China’s Belt and Road Initiative (BRI). Meloni—along with many members of her cabinet—have voiced skepticism towards the agreement. As such, everything is on the table in the run-up to the decision at the end of the year.
Topic:: Foreign Policy, Economics, Infrastructure, and Belt and Road Initiative (BRI)
Political Geography:: China, Europe, Asia, and Italy

20. The Demise of Diplomatic Ambiguity: Parsing South Korea’s Estrangement From China

Author:: Matthew Fulco
Publication Date:: 08-2023
Content Type:: Journal Article
Journal:: China Brief
Institution:: The Jamestown Foundation
Abstract:: In July, the US Ohio-class ballistic-missile submarine (SSBN) visited South Korea for the first time since 1981. Not one, but two of the 560-foot-long warships—which carried a payload of 24 long-range Trident ballistic missiles—surfaced in South Korean waters (Korea JoongAn Daily, July 24, 2023). From Washington and Seoul’s perspective, the SSBN deployment was a pointed reminder to the mercurial North Korean regime to exercise restraint, but the symbolism of the SSBN visit was not lost on China—Pyongyang’s closest ally. For all its military modernization efforts, Beijing has no effective defense against the Ohio-class sub. That South Korea would support the deployment of the SSBNs to its territory illustrates both its concern about rising North Korean brinkmanship and newfound willingness to risk Beijing’s ire. Indeed, after three decades of stable ties anchored in economic interdependence, major changes are afoot in the South Korea-China relationship. Compared to Japan, which also counts China as its largest trading partner, South Korea has historically been less willing to stand its ground in the face of political pressure from Beijing. On the one hand, Seoul and Beijing have no major territorial disputes, but more importantly, South Korea had previously calculated that its political deference—especially on China’s “core interests” like Taiwan—would encourage Beijing to support denuclearization of the Korean Peninsula, the Republic of Korea’s (ROK) top foreign policy objective. For many years, South Korea handled Beijing with kid gloves, irrespective of who was in the Blue House. While the left-leaning Democratic Party of Korea (DPK) is traditionally more China-friendly, it was the conservative President Park Geun-hye who attended China’s jingoistic September 2015 military parade. After a summit between Xi Jinping and Park, both leaders made a commitment to oppose any unilateral actions that could lead to tension on the Korean Peninsula. The following day, President Park joined Xi and Russian President Vladimir Putin in China’s military parade. South Korea was the only US ally to attend the event (The Korea Herald, September 3, 2015). Since then, however, the two countries have drifted apart. The catalyst for this change was Seoul’s decision to deploy the THAAD missile defense system in 2017, which China views as a security threat and South Korea deems essential for self-defense. China has repeatedly demanded that South Korea dismantle its THAAD system (Xinhua, September 21, 2017). When those demands failed to bear fruit, it resorted to sanctions against South Korea (The Korea Herald, March 8, 2017). Furthermore, both China’s imposition of a draconian national security law in Hong Kong and its mismanagement of the coronavirus pandemic have hurt its reputation in South Korea (The South China Morning Post, October 20, 2020). It is against this backdrop that the ROK’s anti-China sentiment has surged to an all-time high—a development that will inevitably spill over into Seoul’s foreign policy. According to a 2021 survey conducted by SisaIN, for the first time since the ROK and the PRC normalized relations in 1992, South Koreans view China even more negatively than they do Japan (SisaIN, November 29, 2021). China’s ruling Communist Party seems oblivious to the existential threat that South Korea feels in the face of surging missile tests by North Korea. The JoongAng Daily noted in June that it takes just two minutes for a North Korean missile to hit Seoul. According to the editorial, “South Korea is technically still at war with North Korea. The government and people must not forget that” (Yonhap News Agency, June 1, 2023). Concluding that political appeasement and economic engagement with China have failed to pay off, South Korea is taking two significant steps: strengthening its ties with its top security partner, the US, and mending fences with its former rival, Japan. The implications of Seoul’s estrangement from Beijing could have far-reaching implications for geopolitics in the broader Indo Pacific region.
Topic:: International Relations, Diplomacy, Economics, and Regional Security
Political Geography:: China, Asia, and South Korea

21. China-Pakistan Economic Corridor: Socio-Cultural and Political Implications for Pakistan Amid Covid19 and the Way Forward

Author:: Mubeen Adnan and Reema Murad
Publication Date:: 07-2023
Content Type:: Journal Article
Journal:: Journal of Political Studies
Institution:: Department of Political Science, University of the Punjab
Abstract:: Through the ‘game changer’ project of China Pakistan Economic Corridor, China is aiming to stabilize its western part by promoting investment and economic development in its neighbour to the West, Pakistan, which will lead to a boost in the Pakistani economy through investments in infrastructure and construction of gas and oil pipeline. There is also the aim of reducing extremism in the Xinjiang region. However, there are several social, cultural and political changes that the project has the potential to bring about in Pakistan. This research work has made an attempt to understand the variousimplications of the China Pakistan Economic Corridor on Pakistan as well as how the COVID-19 pandemic impacted CPEC and the path ahead as the world slowly transitions out of COVID-19. This research paper has used secondary sources in order to answer these pertinent topics. Major opportunities which Pakistan and China have gained through this ChinaPakistan economic Corridor as well as some challenges are also discussed.
Topic:: Economics, Bilateral Relations, Investment, Economic Development, COVID-19, and Opportunity
Political Geography:: Pakistan, China, South Asia, and Asia

22. Deciphering Pakistan Navy’s Role in CPEC Security: A Comprehensive Security Approach

Author:: Shabana Fayyaz and Nabeel Hussain
Publication Date:: 07-2023
Content Type:: Journal Article
Journal:: Journal of Political Studies
Institution:: Department of Political Science, University of the Punjab
Abstract:: Contemporary geo-political and geo-economics potentialities creates new horizons for the bilateral relations between states. These potential arrangements require security as a pre-requisite, both traditional and nontraditional domain. Pakistan Navy is dealing with these security threats from a comprehensive security approach. Through Task Force-88 and Task Force-150 as well as the Force Protection Battalion (FPB) for the security of CPEC from foreign actors, it has made enormous efforts to protect the China Pakistan Economic Corridor (CPEC) from new challenges and threats. This demonstrates that the People's Liberation Army Navy (PLAN) and the Pakistan Navy might accomplish compressive security through joint efforts. The protection and defence of sea lanes of communication (SLOCs) and the maritime-based economy are also enshrined in Pakistan's maritime doctrine. The Pakistan Navy's active engagement in Pakistan's security sector has also opened doors for the improvement of bilateral ties between various countries through the AMAN Exercises, a global collaboration of 45 nations to combat rising security threats.
Topic:: Security, Economics, Bilateral Relations, Geopolitics, Non-Traditional Threats, and CPEC
Political Geography:: Pakistan, China, and South Asia

23. Strategic Competition in the Financial Gray Zone

Author:: Heather A Conley, James Andrew Lewis, Eugenia Lostri, and Donatienne Ruy
Publication Date:: 04-2022
Content Type:: Special Report
Institution:: Center for Strategic and International Studies
Abstract:: Over the past 10 years, the U.S. government has slowly reoriented its foreign and security policy from the fight against global terrorism toward strategic competition with Russia and China. This reorientation has been accompanied by a new examination of how strategic competition will impact the integrity and future stability of the U.S. economy and financial system. One of the most important elements of strategic competition is sub-threshold warfare (also called asymmetric, hybrid, or gray zone warfare), wherein strategic competitors seek to shape the geostrategic environment in their favor, from information operations to economic warfare—which includes such tools as illicit finance and strategic corruption. Strategic competitors present a clear economic and financial threat to the United States when they operate in the emerging financial gray zone, in which malign actors can take advantage of the U.S. financial system to further their aims and disarm the country internally. The U.S. government, along with its allies, has only begun to acknowledge the sweeping nature of the financial gray zone and to reposition itself to compete within it. Because adversaries exploit the seams between the internal and external policies and authorities, Washington must have greater insights into a complex operating system and better integrate data across the many relevant agencies—in a way, connecting the financial dots. As it develops this comprehensive picture, the U.S. government should develop stronger defensive and offensive policy tools to counter this emerging threat.
Topic:: Economics, Finance, Strategic Competition, and Rivalry
Political Geography:: China, Asia, North America, and United States of America

24. Trump ended WTO dispute settlement. Trade remedies are needed to fix it.

Author:: Chad P. Bown
Publication Date:: 01-2022
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: Unhappy with the rulings of the WTO dispute settlement system, which disproportionately targeted US use of trade remedies, the United States ended the entire system in 2019. There are multiple hurdles to agreeing to new terms of trade remedy use and thus potentially restoring some form of binding dispute settlement. First, a change would affect access to policy flexibility by the now large number of users of trade remedies. Second, although China’s exports are the overwhelming target of trade remedies, exporters in other countries increasingly find themselves caught up in trade remedy actions linked to China. Third, critical differences posed by China’s economic model may call for new rules for trade remedies, but no consensus on those rules has emerged. Even some of the most promising reforms have practical limitations, create additional challenges, or may be politically unviable.
Topic:: Economics, Trade, Donald Trump, and WTO
Political Geography:: China and United States of America

25. 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, Political Economy, Public Opinion, Trade, and Protectionism
Political Geography:: China, Asia, North America, and United States of America

26. South Korea's Critical Moment in Digital Currency Policymaking: Between Regulating Cryptocurrencies and Launching a Central Bank Digital Currency (CBDC)

Author:: June Park
Publication Date:: 03-2022
Content Type:: Working Paper
Institution:: Korea Economic Institute of America (KEI)
Abstract:: Why is South Korea pilot-testing its Central Bank Digital Currency (CBDC), and what made it shift from non-issuance to consideration? This paper investigates the Bank of Korea (BOK)’s CBDC-related developments amid the geopolitical contest between the U.S. and China. It examines the Moon Jae-in administration’s defiance of decentralized finance (DeFi) and the BOK’s sudden shift from non-issuance to potential issuance, which led to expedited research, development, and pilot-testing of CBDCs. As in the case of the digital yuan, the BOK envisions a hybrid architecture for the digital won, wherein central banks and associated partner institutions are CBDC distributors, though they are distinguished by placing the digital won on distributed ledger technology rather than by centrally controlling it. However, South Korea’s previously rash decision to forego DeFi under an undemocratic process has deprived the country of the time and opportunity to develop new innovations as a leading country in the digital frontier. By sticking only to digitalizing centralized finance, the country now aims to be in “standby” mode for its CBDC launch if and when required, so as not to fall behind in digital financial architecture. This paper scrutinizes the South Korean government’s moves on crypto and CBDCs and argues that 1) the Moon administration has shown incapability in addressing DeFi amid the crypto boom and bust, and 2) the BOK’s shift from non-issuance to potential issuance of the digital won is driven by its interest to uphold central bank independence amid swaying geopolitics between the U.S. and China and an unpredictable upcoming presidential election in South Korea.
Topic:: Economics, Elections, Finance, Cryptocurrencies, and Digital Currency
Political Geography:: China, Asia, South Korea, North America, and United States of America

27. 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

28. Beijing Winter Olympics 2022: Sports, Law, and Policies

Author:: Tim Harcourt, Deborah Healey, Keiji Kawai, and Yang Pei
Publication Date:: 02-2022
Content Type:: Policy Brief
Institution:: China Studies Centre, The University of Sydney
Abstract:: The 2022 Beijing Winter Olympics were hosted amid the Covid-19 pandemic and surrounded by concerns and controversies. This Understanding China Brief results from a roundtable discussion organized by the China Studies Centre and the Centre for Asia and Pacific Law of Sydney University on 3 February 2022 to examine four aspects of the Beijing Olympics: boycotts, COVID- 19 control, law reform, and the economics of the Olympics.
Topic:: Economics, Reform, Sports, Conflict, Olympics, Pandemic, and COVID-19
Political Geography:: China and Asia

29. Red Ink: Estimating Chinese Industrial Policy Spending in Comparative Perspective

Author:: Gerard Dipippo, Ilaria Mazzocco, and Scott Kennedy
Publication Date:: 05-2022
Content Type:: Special Report
Institution:: Center for Strategic and International Studies
Abstract:: A new report by the CSIS Economics Program and the Trustee Chair in Chinese Business and Economics quantifies the size of total industrial policy spending by China and compares it to seven other major economies: Brazil, France, Germany, Japan, South Korea, Taiwan, and the United States. Much of the existing research on industrial policy focuses on its effects, but there are few, if any, published studies that attempt a systematic comparison and quantification of overall industrial policy spending. The heart of the report is the careful calculation of total industrial policy spending by China and the other economies, combining estimates from multiple tools, among them direct subsidies, tax breaks, below-market credit, and state investment funds. The report provides additional context by examining the historical trajectory of industrial policy of these economies and the evolution of industrial policy across these economies for three industries—aluminum, semiconductors, and electric vehicles. The historical and sectoral analyses point to some similarities across economies, but they also demonstrate how distinctive China has been in terms of both quantifiable spending and non-quantifiable policy tools. Finally, this report discusses several important policy implications, including greater transparency and more harmonized reporting about industrial policy spending and the potential ways in which policymakers could employ these data to more effectively limit industrial policy spending by China and other economies.
Topic:: Economics, Industrial Policy, Industry, and Labor Market
Political Geography:: China and Asia

30. Sanctions, SWIFT, and China’s Cross-Border Interbank Payments System

Author:: Barry Eichengreen
Publication Date:: 05-2022
Content Type:: Policy Brief
Institution:: Center for Strategic and International Studies
Abstract:: In response to Russia’s attack on Ukraine, the United States and a coalition of cooperating countries imposed harsh financial sanctions on the Russian government, corporations, and individuals.1 These sanctions bar Russian banks from using SWIFT (the Society for Worldwide Interbank Financial Telecommunications) to facilitate cross-border payments, prohibit banks from doing most forms of business with Russian entities, and freeze assets held abroad by the Central Bank of Russia in the form of treasury securities and bank deposits. These developments have led Russia, as well as other countries contemplating whether they might find themselves in the same position, to explore alternatives. Such options could include building a substitute for SWIFT to send instructions regarding cross-border interbank transactions; identifying financial counterparties other than Western banks with which to do international business and platforms other than Western clearinghouses through which to make payment; and finding a vehicle other than the dollar for denominating and executing transactions. Specifically, countries are looking to China, which has large internationally active banks, has created its own clearinghouse for cross-border transactions and is embarked on a campaign to encourage broader international use of its currency, the renminbi.2 This note investigates how far China has gone in creating alternatives to SWIFT, Western banks, and the dollar. It explores whether Russia and other countries might be drawn toward this parallel international financial universe and what economic and political implications this has—for the United States, for its geopolitical rivals, and for global economics and politics. China is making strides in fostering cross-border use of the renminbi and building a renminbi-based interbank payments system that can serve as an alternative to SWIFT and Western clearinghouses. However, these remain somewhat limited alternatives—for the moment. The situation could change faster if lent additional impetus by Western sanctions. Thus, countries such as the United States that employ financial sanctions should prepare for the development of alternative financial arrangements in China and possibly elsewhere. This may mean relying more heavily on nonfinancial measures insofar as financial sanctions eventually become less effective.
Topic:: Economics, Sanctions, Finance, Borders, and Banks
Political Geography:: China and Asia

31. How China’s Human Capital Impacts Its National Competitiveness

Author:: Briana Boland, Kevin Dong, Jude Blanchette, and Ryan Haas
Publication Date:: 05-2022
Content Type:: Policy Brief
Institution:: Center for Strategic and International Studies
Abstract:: How will the strengths and weaknesses of China’s human capital impact national competitiveness? China’s efforts to maintain economic growth, strengthen supply chains, develop strategic science, technology, engineering, and mathematics (STEM) sectors, and secure a modern military edge hinges on the ability to cultivate and utilize human capital. As the United States and other countries increasingly engage in multidomain competition with China, it is critical to start from a clear-eyed understanding of China’s human capital and Beijing’s strategy for nurturing national talent. Investments in higher education, strategic STEM sectors, and military talent demonstrate key areas in which Beijing is focusing on cultivating human capital. However, China must overcome significant obstacles to innovate as it faces substantial demographic pressures, socio-economic inequalities, and challenges to attracting and retaining top talent both domestically and internationally.
Topic:: Economics, Labor Issues, Human Capital, and Strategic Competition
Political Geography:: China and Asia

32. 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

33. Japan's "Economic Security" Measures

Author:: Didi Kirsten Tatlow and Afra Herr
Publication Date:: 02-2022
Content Type:: Policy Brief
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: Japan and Germany face an acute dilemma. China, a key trading partner for both nations, uses political warfare and economic statecraft to advance its interests. Like Germany, Japan has a strong SME economy and auto industry, and has dependencies on China. Yet Japan faces more risk due to its geographical proximity to China and territorial disputes. As global tensions grow, Japan is responding robustly by building economic security. Germany, together with the EU and other like-minded partners, should do the same.
Topic:: Security, Economics, Politics, and Trade
Political Geography:: Japan, China, Asia, and Germany

34. Promoting the Euro – Countering Secondary Sanctions: Germany Should Push to Complete Monetary Union

Author:: Markus Jaeger
Publication Date:: 02-2022
Content Type:: Policy Brief
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: US-Chinese rivalry will increasingly play out in the geo-economic realm. The use of secondary sanctions – especially secondary dollar sanctions – negatively affects German economic interests. The new German government should therefore intensify efforts to promote the euro as an international currency coequal to the dollar in addition to lending its qualified support to EU anti-coercion policies.
Topic:: Economics, Sanctions, European Union, Rivalry, and Geoeconomics
Political Geography:: China, Asia, and United States of America

35. China’s Dilemmas in Bailing Out Debt-Ridden Sri Lanka

Author:: Ganeshan Wignaraja
Publication Date:: 01-2022
Content Type:: Special Report
Institution:: East-West Center
Abstract:: Ganeshan Wignaraja, a Non-Resident Senior Fellow at the Institute of South Asian Studies (ISAS) of the National University of Singapore and a Senior Research Associate at the Overseas Development Institute (ODI) in London, explains that "Sri Lanka is now stuck in a ‘debt trap’. However, the debt trap is not wholly Chinese."
Topic:: Debt, Development, Diplomacy, and Economics
Political Geography:: China, Asia, and Sri Lanka

36. China’s increased presence in Latin America: Win-win relations or a new dependency? A state of the art

Author:: Daniel Agramont Lechín
Publication Date:: 01-2022
Content Type:: Working Paper
Institution:: Postgraduate Program on Sustainable Development and Social Inequalities in the Andean Region (trAndeS)
Abstract:: The rise of the Popular Republic of China (PRC) is one of the most significant events in contemporary international relations. However, at the global level, the “reemergence of China as a major global power has led to a considerable debate over the likely consequences for the rest of the world” (Jenkins, 2010: 810). China’s growing power raises questions as to the meaning of its superpower status as a nation, and the impact of its newfound influence in not only the Asia-Pacific region, but also the Global South (Dessein, 2015). In the specific case of Latin America and the Caribbean (LAC), the debate centers on the potential disadvantages that China’s vast supply of financial resources might bring for the region. Accordingly, the current paper is intended to examine the debate that has arisen in recent literature around the impact of China’s increased economic presence on Latin America –with win-win relations on the one hand and new dependency on the other.
Topic:: International Relations, Economics, Investment, and Dependency
Political Geography:: China, Asia, and Latin America

37. Who Lends to Africa and How? Introducing the Africa Debt Database

Author:: David Mihalyi and Christoph Trebesch
Publication Date:: 03-2022
Content Type:: Working Paper
Institution:: Kiel Institute for the World Economy (IfW)
Abstract:: Africa’s sovereign debt markets are not well understood, partly due to a lack of data. This paper introduces the Africa Debt Database (ADD), the most granular and comprehensive dataset on external borrowing by African governments thus far. Our project moves beyond existing aggregate datasets and instead releases information on individual loans and bonds, in particular on the financial terms of each instrument. Taken together, we cover nearly 7000 loans and bonds between 2000 and 2020, with a total volume of 644 billion USD. Using this data, we study Africa’s record lending boom of the 2010s in detail. The debt boom was mainly driven by large sovereign bond issuances in London and New York, as well as growing lending by Chinese state-owned banks. The micro data also reveal a large variation in lending terms across countries, time, and creditors. Sovereign external bonds have interest rates of 6 percent, on average, Chinese banks charge 2-4 percent, and multilateral organizations just 1 percent. Strikingly, many governments in Africa simultaneously borrow large amounts from both private and official creditors, at vastly different rates. The large differences in debt servicing costs are indicative of a cross-creditor subsidy, as cheap concessional loans can be used to pay the high interest to private or Chinese creditors.
Topic:: Economics, Foreign Aid, Credit, and Influence
Political Geography:: Africa, China, and Asia

38. Correlates of Politics and Economics: How Chinese Investment in Africa Changes Political Influence

Author:: Carla D. Jones, Mengge Li, and Hermann A. Ndofor
Publication Date:: 03-2022
Content Type:: Special Report
Institution:: Foreign Policy Research Institute
Abstract:: This study investigates the impact of Chinese economic engagement in Africa (FDI and loans from China to African countries) on African countries’ international political alignment as evidenced by voting patterns in the UN General Assembly. We find three seasons of Chinese policy in Africa. Pre 2008, Chinese economic engagement in Africa was driven primarily by economic considerations, market seeking for FDI and likely resource seeking for loans. During the Great Recession, China came to terms with its rise as an economic power and thus started leveraging its economic power in international relationships. During this season, both Chinese FDI and loans were no longer driven by economic considerations but rather by international relations which led to increased political alignment with recipient African countries. The final season captured the Xi Jinping era beginning 2013. During this season, Chinese FDI had no effect on African countries’ foreign policy alignment with China, but Chinese loans still had a significant positive effect. This likely reflects a movement away from FDI to less transparent bilateral loans as a means of utilizing Chinese economic power to influence foreign policy. During the entire period of the study, Chinese FDI to Africa resulted in reduced political alignment between African countries and the United States.
Topic:: Foreign Policy, Economics, Politics, Investment, and Influence
Political Geography:: Africa, China, and Asia

39. China’s Development Path: Government, Business, and Globalization in an Innovating Economy

Author:: Yin Yi and William Lazonick
Publication Date:: 08-2022
Content Type:: Working Paper
Institution:: Institute for New Economic Thinking (INET)
Abstract:: We employ the “social conditions of innovative enterprise” framework to analyze the key determinants of China’s development path from the economic reforms of 1978 to the present. First, we focus on how government investments in human capabilities and physical infrastructure provided foundational support for the emergence of Chinese enterprises capable of technological learning. Second, we delve into the main modes by which Chinese firms engaged in technological learning from abroad—joint ventures with foreign multinationals, global value chains, and experienced high-tech returnees—that have contributed to industrial development in China. Third, we provide evidence on achievements in indigenous innovation—by which we mean improvements in national productive capabilities that build on learning from abroad and enable the innovating firms to engage in global competition—in the computer, automobile, communication-technology, and semiconductor-fabrication industries. Finally, we sketch out the implications of our approach for current debates on the role of innovation in China’s development path as it continues to unfold.
Topic:: Development, Economics, Globalization, Infrastructure, Hegemony, and Innovation
Political Geography:: China and Asia

40. Immaterial Competition: Rethinking the Roles of Economics and Technology in the US-China Rivalry

Author:: Arthur Tellis
Publication Date:: 05-2022
Content Type:: Special Report
Institution:: Hudson Institute
Abstract:: The US-China rivalry is likely to be the fulcrum around which international affairs are structured in the twenty-first century, akin to the Cold War from 1947 to 1991. This rivalry, like its predecessor, emerges from divergent geopolitical interests and imperatives. While the Chinese Communist Party’s aims are many, various, and subject to change, they include its continued control of the Chinese State; economic and technological modernization and leadership; internal order; complete union with Taiwan on Beijing’s terms; certain territorial concessions from its neighbors; and the disestablishment of security arrangements across the Indo-Pacific that it views as threatening and trammeling. The latter three are in direct conflict with US interests and imperatives in the Indo-Pacific: prohibiting China’s unilateral modification of the status quo vis-à-vis Taiwan; preserving the sovereignty and territorial integrity of its allies and partners; and maintaining its military partnerships and presence in the region. These antithetical interests animate a larger struggle for hegemony in the Indo-Pacific and serve as the terms on which this contest will be decided. Explanations of the rivalry as an ideological contest or a competition born from competing economic interests are less compelling by comparison. The United States and China are motivated to an extent by ideological imperatives, but these do not appear to propel or serve as the central stakes for the rivalry as much as they affect each’s disposition toward the other. Long-standing trade, investment, and commercial disputes and competition, meanwhile, are not so substantial that they motivate the rivalry. While these issues are impactful to niche communities and conspicuous to national policymakers, they are not particularly consequential for national prosperity. The logic of competition, trade, and globalization, in fact, suggests that the US-China commercial relationship is mutually beneficial, notwithstanding each’s concerns with the other’s economic statecraft and market-leading firms. In their geopolitical rivalry, there are a few key forces or contests of interest: path dependence, regime continuity, prudent strategy, third-party alignments, and the balance of military forces in the Indo-Pacific. Each affects the United States’ and China’s ability to achieve their ends and shapes their rivalry. Economic and technological statecraft, by contrast, is largely peripheral to these ends as it does not effectively advance political objectives relevant to territory, borders, security architectures, and national defense. That is not to suggest that economic and technological factors are irrelevant, however; they shape, constrain, and advantage the United States and China across their rivalry’s key forces and contests of interests. Particularly noteworthy are economic and technological factors’ impact on the military balance. Tradition and intuition hold that nations with bigger and more advanced economies are better postured to resource, procure, and manufacture military equipment and can therefore generate greater military power. In the case of the US-China military competition, however, total military power is less relevant than the specific military balance in the Indo-Pacific, in which the distribution and strength of forces in the theater, the capability and reliability of key materiel inputs of outsized importance, and the operational concepts and tactics with which each’s military fights are more important. Total military power—and in particular greater military equipment—matters on the margin, of course, if only because the party with the greater mass and quality of materiel will be able to retain more forces in the Indo-Pacific, maintain more of these key materiel inputs, and develop novel operational concepts and tactics tailored to their superior materiel. Neither the United States’ nor China’s total economic production, public balance sheet, high-technology commercial firms, and scientific production are likely to provide a decisive or lasting advantage on this count. Each country’s economy can support substantially greater military spending, limiting the extent to which one can derive an advantage from the other’s more binding constraints. The capacity and maturity of each country’s defense industrial base is of greater relevance, but these are flexible quotients that investment can improve. This elasticity of defense production suggests that microeconomic endowments may be binding in the short run but variable in the longer run, meaning that policy choices—rather than existing economic endowments—constrain military production. Technological endowments, informing each country’s capacity for broad innovation, are of similarly bounded importance because military technology is somewhat narrow and other factors, such as military procurement processes and inflexibility in concepts of operation, limit the extent to which superior technology translates into military advantage. The fundamental result of this argument is that the concerns that propel the emerging US-China economic and technological competition are ultimately not all that relevant to the matters at the core to their rivalry and to the instruments of national power most relevant to these issues. The US should therefore be wary of policies ostensibly demanded by economic and technological competition and may find its interests better served by limiting its rivalry with China to military competition driven by its core geopolitical interests.
Topic:: Economics, Science and Technology, Strategic Competition, and Rivalry
Political Geography:: China, Asia, North America, and United States of America

41. Understanding and Countering China's Approach to Economic Decoupling from the United States

Author:: John Lee
Publication Date:: 08-2022
Content Type:: Special Report
Institution:: Hudson Institute
Abstract:: Many experts have highlighted American efforts to partially decouple from China. Yet China began pursuing a far more ambitious and comprehensive decoupling strategy vis-à-vis the United States long before Donald Trump entered the White House. This monograph examines China’s evolving approach to economic decoupling from the US. It makes the following arguments and conclusions. First, on the back of a preexisting mercantilist political economic structure, China has been explicitly pursuing economic decoupling from US and allied economies on Chinese terms for at least a decade. Second, while the US seeks to decouple some aspects of its economic activity from China, the latter seeks to dominate vast segments of the Asian economy and to decouple these segments from the US. This is the Chinese strategy and threat that the US vastly underappreciates. Third, the most important segments are the high-tech and high-value sectors. These sectors are where competition is the most consequential and where decoupling on US terms needs to occur. Fourth, China faces increasingly serious problems and obstacles regarding its decoupling strategy. Many of these arise out of structural weaknesses inherent in its political economy. The monograph is written to assist the Biden administration and those who follow it to possess a deeper understanding of: China’s actions and the motives behind them; China’s strengths, weaknesses, and vulnerabilities; and How the US and its allies can craft an evolving approach that better plays to their individual and collective strengths and advantages. China hopes the US and its allies will adopt a cautious, gradualist, and ineffective approach to countering Beijing’s strategy and objectives. The Chinese Communist Party knows the US and other advanced economies still have immense advantages despite clever Chinese messaging to the contrary. The US and its allies continue to enjoy considerable leverage and remain well placed to partially decouple from China on their preferred terms, but they need to act quickly, collectively, and decisively.
Topic:: International Relations, Foreign Policy, Defense Policy, Economics, and National Security
Political Geography:: China, Asia, North America, and United States of America

42. Chinese Information and Influence Warfare in Asia and the Pacific

Author:: John Lee
Publication Date:: 09-2022
Content Type:: Special Report
Institution:: Hudson Institute
Abstract:: The People’s Liberation Army’s increasingly provocative and reckless activities in and around disputed zones such as Taiwan, the Senkaku Islands, and the South China Sea constitute only one means through which Beijing seeks to change key aspects of the regional order and compel others to “accept its interests.” However, the Chinese Communist Party and PLA are already decades into China’s information and influence war, which is designed to either weaken the will and capabilities of the United States and its allies should military conflict break out or, even better, eliminate the need for China to use military force to achieve its primary objectives (i.e., to “win without fighting”). In this context, the PLA is several steps ahead of the West; whereas Western analysts observe that the PLA is operating in the “grey zone,” the PLA is instead redefining and expanding this grey zone by manipulating how other countries think about it. With respect to this so-called grey zone, a cost-benefit analysis encompassing both objective and subjective elements typically determines an entity’s decision to respond with military force. For example, crafting narratives about the PLA’s military superiority, elite capture, ability to foment disunity within a target country, or normalization of coercion raises the West’s threshold of what provocations demand a military response—thereby expanding the grey zone within which the PLA and CCP are allowed to operate. Thus, Beijing is well ahead of the US and its allies in conceptualizing and operationalizing the use of military actions other than (kinetic) war to achieve political or strategic objectives. Finally, Asia and the Pacific constitute both the primary and most suitable region within which the Chinese can conduct information and influence warfare. These sub-regions’ unique material, geographical, ideational, and cultural characteristics render them especially suitable for Beijing to successfully wage political warfare. This policy memo describes the key objectives, strategies, and tactics of Chinese information and influence warfare developed and refined for use in the Asia-Pacific region. It focuses on maritime Southeast Asia and the Pacific, the areas of highest interest for the US, Australia, and their allies. Offering Singapore, Thailand, and the Solomon Islands as three pertinent case studies, the memo also lays the groundwork for an examination of effective US and allied counters to Beijing’s activities in these contexts, which follow-up reports in this series will present.
Topic:: Foreign Policy, Economics, National Security, Territorial Disputes, and Information Warfare
Political Geography:: China and Asia

43. The Mixed Record of China’s Belt and Road Initiative

Author:: Thomas J. Duesterberg
Publication Date:: 10-2022
Content Type:: Special Report
Institution:: Hudson Institute
Abstract:: China’s Belt and Road Initiative (BRI), a signature program of Xi Jinping, has had undoubted success in supporting Xi’s ambitions to reestablish China as a global leader while strengthening its mercantilist economy. Nonetheless, developed and developing countries are reconsidering the program because of its success—largely for China itself—and because of the global economic and political crises since the onset of the COVID-19 pandemic. BRI also has increasingly visible problems caused by its operating structure, prompting participants and developed countries whose geoeconomic and geopolitical interests are undermined by the program’s expansion to reassess it. Continued BRI growth is at best questionable and probably unlikely in the wake of growing pushback to the program as well as growing problems inside China itself.`
Topic:: Economics, Infrastructure, Belt and Road Initiative (BRI), and Xi Jinping
Political Geography:: China and Asia

44. Russia’s connectivity strategies in Eurasia: Politics over economy

Author:: Kristiina Silvan and Marcin Kaczmarski
Publication Date:: 06-2022
Content Type:: Policy Brief
Institution:: Finnish Institute of International Affairs
Abstract:: Russia has been attempting to strengthen connectivity within Eurasia since the early 2000s as a part of its policy to “pivot to the East”. Yet due to limited resources and political will, the tangible effects of its connectivity strategy have remained limited. The Russian Far East would greatly benefit from an improved connectivity infrastructure, given its proximity to Asian markets and the abundance of natural resources in the region. However, the attempts to accelerate regional socio-economic development by strengthening the region’s connectivity have failed to make a difference. In post-Soviet Central Asia, Russia adopted a passive approach to connectivity in the 1990s and 2000s, which meant focusing on maintaining and protecting the links inherited from the Soviet Union. It was only the pressure of external actors – both China and the West – that prompted Moscow to take a more active stance in the region in the 2010s. The launch of China’s Belt and Road Initiative pushed Russia to promote its own grand vision of trans-continental connectivity, the Greater Eurasian Partnership, designed to reaffirm Moscow’s great-power status and its equal standing with China. While it lacks economic and administrative foundations and its implementation is highly implausible, it has fulfilled a symbolic role as Russia’s grand connectivity project for Eurasia.
Topic:: Economics, Infrastructure, Belt and Road Initiative (BRI), Rivalry, and Resource Allocation
Political Geography:: Russia, China, Europe, and Asia

45. 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

46. Estados Unidos y África. Historia de una no-política

Author:: Pablo Rey-García and Pedro Rivas Nieto
Publication Date:: 10-2022
Content Type:: Journal Article
Journal:: Revista UNISCI/UNISCI Journal
Institution:: Unidad de investigación sobre seguridad y cooperación (UNISCI)
Abstract:: En este artículo se estudian las relaciones entre Estados Unidos y África, desde los puntos de vista económico, político y de seguridad. Son, estos tres campos, interdependientes, pero a la vez enormemente dinámicos, tanto por la inercia política estadounidense, como por los condicionantes propios de África (déficit en desarrollo, pobreza, inseguridad o inestabilidad política) como por el contexto internacional. En este último aspecto, cobra especial relevancia la invasión rusa de Ucrania o la emergencia de la ambición militar China, pues ambos países compiten con Estados Unidos por tener una mejor posición en el continente africano.
Topic:: International Relations, Development, Economics, National Security, and Terrorism
Political Geography:: Africa, Russia, China, Asia, North America, Sahel, United States of America, and Horn of Africa

47. Embedding Human Rights in European and US China Policy

Author:: Malin Oud
Publication Date:: 05-2022
Content Type:: Working Paper
Institution:: German Marshall Fund of the United States (GMFUS)
Abstract:: Europe and the United States share an interest in promoting human rights in China but often struggle to affect change in this regard. Because of ineffective approaches and low political commitment, human rights are a marginalized issue in transatlantic China policy and an afterthought to commercial interests. European and US policymakers have attempted to compartmentalize their approach to China, keeping human rights separate from commercial and other interests. This does little to advance human rights, and it only seems to encourage more assertive and coercive behavior by China. During the last few years, the Western assumption that trade and foreign capital would transform China into a more open and democratic society has been replaced by a disillusioned realization that its rise as a superpower is reshaping the international order. Under President Xi Jinping, China has evolved from its previous position as rule-taker and status quo-keeper at the UN to become an assertive rule-maker and international norm entrepreneur. Its vulnerability to external pressure has declined while its power to exert pressure and economic coercion on others has increased. China no longer presents its political and economic model merely as different from but as superior to that of the liberal democracies in the West. For several years now, European and US policymakers have declared an “end of naivety” in relation to China. After years of debating how to make the EU more resilient and robust, Russia’s invasion of Ukraine has “given birth to geopolitical Europe,” in the words of its chief diplomat, Josep Borrell. It remains to be seen whether this moment of clarity will translate into a more principled defense of human rights and investment in democratic resilience. For this to happen, there needs to be a broader reckoning with how Western countries for decades mishandled the authoritarian challenge to the international order, often because they were pursuing stronger economic ties with the same governments they now see as systemic rivals.
Topic:: Foreign Policy, Economics, Human Rights, Business, and Trade
Political Geography:: China, Asia, North America, and United States of America

48. Social Credit System in the People’s Republic of China. Theoretical Assumption and Implementation

Author:: Maciej Walkowski
Publication Date:: 09-2022
Content Type:: Journal Article
Journal:: Polish Political Science Yearbook
Institution:: Polish Political Science Association (PPSA)
Abstract:: In the European Union, the United States and other countries of the so-called Western world, the perception of the functionalities of AI, and other instruments of Industrial Revolution 4.0 significantly differs from its perception by the PRC’s authorities, which – for a few years – have been implementing solutions aimed at comprehensive scrutiny and social supervision rather than facilitating life and work. This idea has been reflected in the so-called Social Credit System since at least 2014 and has given rise to plenty of controversies and disputes, unfortunately based on emotions and imprecise interpretation of the characteristics, aims, and implementation of the project rather than knowledge. While the new, digital model of social management in China is extensively discussed in the literature, it is rarely addressed in Polish studies, which results in the scarcity of publications on this subject. This paper attempts to fill this gap by presenting the essence of the system and the progress of its implementation.
Topic:: Economics, Hegemony, Artificial Intelligence, and Credit
Political Geography:: China and Asia

49. How to Respond to China’s Growing Influence in the Gulf

Author:: Louis Dugit-Gros
Publication Date:: 07-2022
Content Type:: Policy Brief
Institution:: The Washington Institute for Near East Policy
Abstract:: Beijing’s use of intertwined civil and military tools in the Gulf mirrors its activity closer to home, but the West can readily counter this influence by capitalizing on the region’s desire for diversified partnerships. While the Biden administration works to repair ties with Persian Gulf partners in the wake of Russia’s Ukraine invasion, China is getting more attention for its expanding influence in the Indo-Pacific region, including recent reports of naval deals and military activity in the Solomon Islands and Cambodia. Some commentators have even criticized the White House for letting its resolve against Moscow supposedly delay the long-awaited “pivot to Asia” sought by three successive U.S. administrations. Yet talk of the “pivot” often oversimplifies the geopolitical situation, in particular by ignoring China’s progress in the Gulf. The pivot theory relies on the assumption that Beijing is mainly ramping up its influence in its own neighborhood. In reality, the Chinese strategy is global, and the methods it applies in the Indo-Pacific are being used in similar fashion elsewhere, including the Gulf. Such activities merit closer attention from the West even if they are not the number-one priority at the moment.
Topic:: Security, Economics, Strategic Competition, Military, and Energy
Political Geography:: China, Asia, and Gulf Nations

50. Pak-China Geostrategic Interdependence: Impact on Rising Economies of Asia

Author:: Ameena Nasim
Publication Date:: 01-2022
Content Type:: Journal Article
Journal:: South Asian Studies
Institution:: Department of Political Science, University of the Punjab
Abstract:: China and Pakistan have enjoyed a close and mutually beneficial relationship during the last seven decades. Both the nations‘ leadership pronounced the bilateral relationship between China and Pakistan as the ―All-Weather Strategic Cooperative Partnership‖ and ―Iron Brother.‖ The strategic partnership between China and Pakistan has a significant impact on the Asian strategic environment in particular and global politics. The Indian strategic enclave regards China-Pakistan‘s multifaceted relationship as a substantial obstacle for India‘s rise as a Great Power within the regional context. The study‘s primary objective is to critically examine impact on Asia‘s main actors such as India and Russia. So that one can profess about the dynamics of this relationship and implications of China and Pakistan‘s geo-strategic relations on the rising economies. A qualitative study with qualitative interviews and thematic analysis was applied to conduct this study. The analysis reveals that South Asian RSC has no change in the patterns of amity and enmity. The region continues to be conflictive, where their enduring rivalry and continued distrust shape enmity patterns between Pakistan and India. On the contrary, Pakistan and China‘s amity patterns can be seen growing in the longstanding strategic relationship and deep-rooted cooperation. The investigation discovers that on a bilateral level, several new factors in the post-9/11 era have molded Pakistan-China Strategic relations, which have intricate linkages with the regional and global security complexion.
Topic:: Economics, Bilateral Relations, Strategic Interests, Interdependence, and Regional Politics
Political Geography:: Pakistan, Russia, China, South Asia, and Asia

51. China-Pakistan Economic Corridor: News Framing in Political, Strategic, and Economic Perspectives in Print Media of Pakistan

Author:: Hammad Naseer, Muhammad Raza Majid, and Malik Adnan
Publication Date:: 01-2022
Content Type:: Journal Article
Journal:: South Asian Studies
Institution:: Department of Political Science, University of the Punjab
Abstract:: The treatment, image, and issues related to CPEC become significant when this venture is considered a game-changer for the Pakistani economy. This study analyzes the CPEC coverage in Pakistan's highly circulated English newspaper, Daily Dawn, and The News. The quantitative content analysis technique is employed for this study from April 2015 to December 2019. This study aims to explore how news contents of selected newspapers portray the image of CPEC and the treatment of selected newspapers toward this project. The theoretical foundation of this study work under the Grunig models of Public Relations. The findings of this study reveal that both newspapers portray a positive image of CPEC. The primary focus of the news content of selected newspapers is information regarding the economic and political aspects of this project, while inadequate significance is given to strategic, social, and legal aspects. Moreover, from Grunig’s models' perspective, major public relations practices worked under the public information and press agent model.
Topic:: Economics, Politics, Media, and CPEC
Political Geography:: Pakistan, China, and South Asia

52. Understanding Hainan Free Trade Port: China's Efforts to Explore High-level Opening-up

Author:: Wenfeng Wei
Publication Date:: 10-2022
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: On 13 April 2018, upon the 30th anniversary of Hainan province, Chinese President Xi Jinping announced to build Hainan into a free trade port. According to the Master Plan for the Construction of the Hainan Free Trade Port released by the State Council on 1 June 2020, China aims to build this southern island province into a high-level free trade port with global influence by the middle of the century. As China's largest special economic zone, Hainan is expected to become the frontline of China's integration into the global economic system. Noting that the world is facing a new round of major development, changes and adjustment, with protectionism and unilateralism on the rise and economic globalization facing greater headwinds, it was also a strategic decision of Chinese authorities based on the domestic and international landscapes. As such, Hainan Free Trade Port (HNFTP) is more than a regional development initiative, and it has a much bigger role to play in China’s reform and opening endeavors.
Topic:: Development, Economics, Special Economic Zones, and Free Trade
Political Geography:: China and Asia

53. Recent Marriage and Labor Supply Pattern of Young Chinese Women

Author:: Yoon Jae Ro and Jeonghwan Yun
Publication Date:: 09-2022
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: In this paper, we examine the impact of a sibling gender on educational attainment, earnings, family formation for a recent cohort of women in China. Family characteristics such as number of siblings, sibling gender composition, and parents’ characteristics may play an important role in children’s life as the presence of a sibling can affect parents’ treatment of the remaining children. Especially male siblings can affect children’s outcome through various pathways as male sibling may pull parental investment of resources away from girls, because boys may be seen as the “higher return” investment (Becker, 1991). We investigate the effect of having a (male) sibling on a daughter by exploiting the change in fertility trend in China induced by the One Child Policy (OCP).
Topic:: Economics, Labor Issues, Women, Marriage, Supply, and Gender
Political Geography:: China and Asia

54. CHIPS Act will spur US production but not foreclose China

Author:: Gary Clyde Hufbauer and Megan Hogan
Publication Date:: 10-2022
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: The CHIPS and Science Act, export controls, and agreements with allied countries will accomplish many of their multiple objectives. More US semiconductor fabrication plants will be built, US R&D will be accelerated, and advanced chips and chip-making machines will be denied to China, Russia, and other adversaries. However, the Act will not make a material difference to US chip supplies in the next two or three years. Slower economic growth has already tipped the chips market in favor of ample supplies. While collective measures have inflicted considerable short-term pain on China, causing a sharp drop in the fortunes of its high-tech firms, China will respond by redoubling its self-sufficiency programs. The United States, however, should not mimic China in pursuing self-sufficiency, as US self-sufficiency is an illusion. The United States currently exports high-value chips and imports low-value chips, so increasing self-sufficiency would require the United States to prioritize basic chip production at the same time it is supposed to be competing with China in advanced chip production. Continuing to prioritize advanced chip production—where the United States has a clear advantage—is the most efficient course of action.
Topic:: Economics, Legislation, Exports, Production, and Semiconductors
Political Geography:: China, Asia, and United States of America

55. South Korea should prepare for its exposure to US-China technology tensions

Author:: Mary Lovely and Abigail Dahlman
Publication Date:: 07-2022
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: The stated goal of the US-led Indo-Pacific Economic Framework for Prosperity (IPEF) is to create standards that enhance and elevate regional trade and investment flows, but it is clearly aimed at reducing the role of China in global supply chains. As China is Korea’s largest trading partner, US policy discouraging Chinese participation in supply chains has immediate detrimental implications for Korean manufacturers. The United States is the second-most important destination for Korean exports. Given the values of these triangular trade flows, Lovely and Dahlman assess South Korea’s exposure to US demands to remove or reduce Chinese participation in the manufacture of exports destined for the US market. The reliance of the proposed framework on certain standards will likely reduce Chinese participation in IPEF trade networks. Korea may benefit from this trend, but IPEF could also increase production costs for Korean companies, especially in the electronics sector, a problem that would worsen if China retaliates against these companies. To reduce these risks, Korea might find it prudent to reduce its reliance on intermediate goods from China for products it produces for export to the United States. The Korean government should also seek to better understand its exposure to US–China trade tensions and diversify its trade relations. Korean firms should start preparing for supply chain disruptions, perhaps by making investments at home. Korea could also help other IPEF members reduce supply chain disruptions while addressing security concerns over China.
Topic:: Economics, Science and Technology, Supply Chains, and Competition
Political Geography:: China, Asia, South Korea, North America, and United States of America

56. 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

57. 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

58. Will economic statecraft threaten western currency dominance? Sanctions, geopolitics, and the global monetary order

Author:: Carla Norrlof
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: Atlantic Council
Abstract:: The return of great power rivalry is stoking renewed fears of weakening Western currency dominance. Financial sanctions are becoming the preferred economic tool for accomplishing geopolitical goals. These instruments are especially popular with the United States and Europe. In response, rival great powers, notably China and Russia, are diversifying away from Western currencies and developing counterstrategies to maintain economic and foreign policy autonomy. As other countries are hit by increasingly punishing Western sanctions, the incentive to join Russia and China’s alternative international monetary order increases. New analysis, published in this report, shows early signs that some countries may be trying to diversify away from the dollar. A growing circle of countries attempting to evade the Western-centric financial and currency order may over time erode the dollar and the euro’s sizeable lead, though will likely fall well short of ending their global dominance. This report analyzes these trends and quantifies the extent of reserve diversification following Russia’s 2022 war on Ukraine. It also assesses the polarity of the international currency order since the onset of the euro in 2002. Reserve diversification out of the dollar, and into the euro, has been modest, though Chinese renminbi reserves grew after Russia’s February offensive in Ukraine. Dollar unipolarity declined acutely in 2017 as the number of countries sanctioned by the United States increased and the US President Donald J. Trump threatened to revoke alliance commitments. Using economic statecraft while retaining global economic influence will require the United States to keep its economic house in order and allies close, if the current unipolar currency order is to survive.
Topic:: Economics, Monetary Policy, Sanctions, and Geopolitics
Political Geography:: China, Europe, and Asia

59. ‘Impactful projection’: long-range strike options for Australia

Author:: Marcus Hellyer and Andrew Nicholls
Publication Date:: 12-2022
Content Type:: Special Report
Institution:: Australian Strategic Policy Institute (ASPI)
Abstract:: The Australian Government has stated that the ADF requires greater long-range strike capability. This was first stated by the previous government in its 2020 Defence Strategic Update (DSU), which emphasised the need for ‘self-reliant deterrent effects’. The present government has endorsed that assessment: Deputy Prime Minister and Defence Minister Richard Marles has stated that ‘the ADF must augment its self-reliance to deploy and deliver combat power through impactful materiel and enhanced strike capability—including over longer distances.’ He’s coined the term ‘impactful projection’ to describe the intended effect of this capability, which is to place ‘a very large question mark in the adversary’s mind.’ The term may be new, but the concept is not. To us, it’s a restating of the concept of deterrence by denial; that is, having sufficiently robust capabilities to convince an adversary that the cost of acting militarily against us isn’t worth any gains that might be made. But the need for the ADF to have those kinds of capabilities has become much more urgent. As the 2020 DSU noted, we no longer have 10 years of warning time of conventional conflict involving Australia. Moreover, this is not just the prospect of conflict far from Australia’s shores. People’s Liberation Army (PLA) force-projection capabilities have grown dramatically in the past two decades and include long-range conventional ballistic missiles, bombers and advanced surface combatants that have already transited through Australian waters.
Topic:: Defense Policy, NATO, and Economics
Political Geography:: Russia, China, Europe, Australia, and Australia/Pacific

60. Germany’s Economic Security and Technology: Optimizing Export Control, Investment Screening and Market Access Instruments

Author:: Tyson Barker and David Hagebölling
Publication Date:: 11-2022
Content Type:: Special Report
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: Technological development and increasingly fraught US-China competition have geopolitical consequences for technology access. The erosion of post-Cold War multilateral dual-use technology export control regimes, such as the Wassenaar Arrangement, and investment and other control frameworks have led to na-tional, EU, and ad hoc measures, such as the restrictions on Russian semiconductor access following the invasion of Ukraine. The German government must integrate technology access and control instruments – export controls, FDI screening, critical infrastructure access, research protection, and outbound investment– in its Digital Strategy and National Security Strategy. The former currently neglects critical technology access and control; the latter must address it comprehensively. German – and EU – dual-use export and FDI screening reforms have been updated and are now in place. Capacity building and alignment with EU and NATO partners now deserves greater attention. Measures could include more robust, institutionalized information-sharing and consultations on dual-use technology export, import, investment, and research controls in a Multilateral Technology Control Committee born out of the G7 or TTC. The commit-tee should also establish the capacity to deny end-user access to German technology through its own Foreign-Direct Product Rules and Entity List.
Topic:: Security, Economics, Science and Technology, Investment, and Exports
Political Geography:: China, Europe, Asia, North America, and United States of America

61. Don’t Get Caught in the Middle: A Geo-Economic Strategy for Germany to Survive US-Chinese Rivalry

Author:: Markus Jaeger
Publication Date:: 12-2022
Content Type:: Policy Brief
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: The economic fallout from the war in Ukraine has been very significant. The consequences of a war in East Asia involving the United States and China would be much worse. And even if a Sino-US military confrontation can be avoided, geo-economic conflict between the two powers is going to intensify. Washington will put increasing pressure on Germany and Europe to align their policies with Washington’s geo-economic strategy.
Topic:: Economics, Strategic Competition, Rivalry, and Geoeconomics
Political Geography:: China, Europe, Asia, Germany, North America, and United States of America

62. China’s Infrastructure Projects in the Middle East: Lessons from China’s Engagement Elsewhere

Author:: Dominika Urhová
Publication Date:: 12-2022
Content Type:: Working Paper
Institution:: Moshe Dayan Center for Middle Eastern and African Studies
Abstract:: In our latest issue of Iqtisadi, Ms. Dominika Urhova discusses the economic strategy and role of China in the Middle East, and analyzes the implications of China's growing influence in the region.
Topic:: Foreign Policy, Development, Economics, Belt and Road Initiative (BRI), and Strategic Engagement
Political Geography:: China, Middle East, and Asia

63. Building on the Middle: Diversifying South Korea’s Foreign Policy Narrative and Economic Ties

Author:: Carolin Wefer
Publication Date:: 11-2021
Content Type:: Special Report
Institution:: Korea Economic Institute of America (KEI)
Abstract:: The rivalry between the United States and China is affecting countries in its midst. This particularly applies to South Korea. The country is a strong economic player with a successful net of free trade agreements. Additionally, it has branded itself as a middle power, a multilateralist, and good international citizen. However, South Korea’s middle power perspective has recently assumed a literal definition of being situated in the middle of two great powers. Seoul’s dependencies on both the U.S. and China are undeniable. As the conflict intensifies, it is thus essential for South Korea to diversify its ties through trade policy and multilateral fora. This requires leaving the literal middle power definition behind and leveraging its economic standing towards an increase in international status, as well as refocusing on the figurative middle power narrative that brought the country to its initial global esteem. Through diversification and the build-up of its economic and multilateral prowess, South Korea stands to lessen the shocks of the U.S.-China rivalry. Joining RCEP and obtaining a guest role at the G7 were important steps in that direction. They offer an expansion of both regional and global ties and an involvement in discussions on the redefinition of international fora, but more can be done.
Topic:: Foreign Policy, Economics, Multilateralism, Rivalry, and Middle Power
Political Geography:: China, Asia, South Korea, and United States of America

64. COVID-19, Supply Chains, and Dependence on China: The Indian Perspective

Author:: Amitendu Palit
Publication Date:: 07-2021
Content Type:: Journal Article
Journal:: Joint U.S.-Korea Academic Studies
Institution:: Korea Economic Institute of America (KEI)
Abstract:: China is India’s largest source of imports, nearly 15 percent of which are sourced from China. Many of India’s major imports—electrical machinery, electronic and semiconductor devices, fertilizers, antibiotics, iron and steel products, and vehicular parts—are extensively sourced from China. The outbreak of the COVID-19 pandemic highlighted the critical dependence of India’s pharmaceutical industry on China for active pharmaceutical ingredients (APIs). The dependence on China for both intermediate and finished products, has encouraged India to incentivize greater production at home through production-linked-incentives (PLIs) and to work with Japan and Australia on reorganizing regional supply chains. The paper examines the repositioning of supply chains in the strategic industry of pharmaceuticals. Efforts to reduce dependence on China assume great importance in this regard as India strives to become the leading supplier of affordable vaccines for tackling COVID-19.) The decade of the 2020’s has begun with India embarking on the dedicated mission of reducing import dependence and increasing self-reliance. The COVID-19 pandemic has starkly exposed the frailties of supply chains relying heavily on China. For India, which relies extensively on China for several critical imports, no sector is more vulnerable to disruptions from over-dependence than its pharmaceuticals. India’s reputation as the “pharmacy of the world” drawn from its great proficiency in making affordable pharmaceutical formulations and vaccines, relies fundamentally on sourcing essential drug intermediates from China. As one of the leading actors in the world’s fight against COVID-19, India is wary of sourcing disruptions from China affecting its ability to contribute to expanding global health security. After focusing on the import dependence of India’s pharmaceutical industry on China, this paper analyzes the recent initiatives announced by India for increasing economic self-reliance and reducing such dependence. It concludes by reflecting on the prospects of India decoupling from China in sourcing pharmaceutical ingredients.
Topic:: Economics, COVID-19, Imports, and Supply Chains
Political Geography:: China, South Asia, India, and Asia

65. Taiwan’s Shifting Role in the Global Supply Chain in the U.S.- China Trade War

Author:: Jinji Chen, Hong-yu Lin, and Yi-ting Lien
Publication Date:: 07-2021
Content Type:: Journal Article
Journal:: Joint U.S.-Korea Academic Studies
Institution:: Korea Economic Institute of America (KEI)
Abstract:: The U.S.-China trade war and the pandemic have had a profound impact on cross-border supply chains. In the past few years of U.S.-China tensions, China has been accused of engaging in unfair competition by abusing its national power, from trade and technology to COVID-19 responses. Amid such accusations, some countries have been stepping back from cooperating with China due to national security concerns. As the lockdowns have further disrupted value chains and highlighted the vulnerability of global supply chains, enhancing supply chain resilience has now become a national imperative for the U.S., Japan, and other countries, with an emphasis on strengthening their production capabilities in the semiconductor and medical care industries.
Topic:: Economics, National Security, Trade Wars, and Supply Chains
Political Geography:: China, Taiwan, Asia, North America, and United States of America

66. The Pandemic’s Impact on Supply Chains from China and their Evolution: The View from South Korea

Author:: Jin Kyo Suh
Publication Date:: 07-2021
Content Type:: Journal Article
Journal:: Joint U.S.-Korea Academic Studies
Institution:: Korea Economic Institute of America (KEI)
Abstract:: Today’s global economy is highly interconnected and interdependent. Supply chains across the world are finely tuned to deliver parts just when they are needed, so that companies and industries do not need to waste money on maintaining big warehouses. The economic system runs with remarkable efficiency, and companies are able to keep inventory to a minimum. However, firms have started rethinking their supply chains in response to changing labor costs, advances in automation, rising protectionism, and external shocks, such as natural disasters. In particular, the COVID-19 pandemic has revealed the structural fragility of current global supply chains and has forced many global enterprises to fundamentally reconsider their approach to global manufacturing and sourcing. The crisis has also highlighted geopolitical tensions, trade restrictions, and nationalist politics aimed at promoting a country’s domestic industries, which are likely to continue reshaping the global business landscape. As a consequence, most global enterprises are going to be under greater political and competitive pressure to increase their domestic production, grow employment in their home countries, and rethink their use of lean manufacturing strategies that involve minimizing the amount of inventory held in their global supply chains. Previously, supply chains were designed to keep costs low and inventories lean. However, supply chains are now being reworked to reduce the risks of future disruption even if doing so means incurring additional costs. Because China is decidedly the world’s largest goods exporter and is also currently mired in a trade conflict with the United States, supply chains going through China may be among the most vulnerable to future disruptions. Hyundai, South Korea’s largest automaker, temporarily stopped production lines at its factories in South Korea because of shortages of Chinese parts. The Hyundai shutdown—encompassing the first factory lines to be idled outside China—could foreshadow considerably more serious disruptions in the complex networks that supply automakers with essential components and materials (Automakers are especially susceptible to interruptions in the flow of goods because the industry is global, and cars are complex products with a myriad of precision parts). Recognizing the risk that dependency on China poses to national industries, some governments have offered manufacturers incentives to exit China and ease the pain of diversification. For example, Japan put $2.2 billion of its COVID-19 economic stimulus package into supporting its manufacturers moving toward shifting production outside of China. There was also mounting public pressure in some countries, such as the United States, to move essential production of pharmaceuticals and medical equipment out of China and closer to home. It is, however, not that simple to reduce global supply chain reliance on China: the nation still retains not only considerable comparative advantages in many areas (e.g. electronics, machinery, and equipment manufacturing), but also enormous purchasing power as the world’s second largest market. Even those companies that have diversified production are finding it hard to break free of China’s pervasive influence. Anticipating a rise in tariffs due to the U.S.-China trade conflict, videogame producer Nintendo shifted the manufacturing of its blockbuster gaming console called Switch to Vietnam in 2019. There was, however, a shortage of Switch consoles in stores in early 2020 due to a lack of essential components flowing to the company’s Vietnamese factories, as COVID-19 paused production of component parts by Chinese suppliers. In addition, most businesses have developed complex interdependencies, resulting in a deep tiering of supply chains. Many manufacturers depend on first-tier suppliers which, in turn, rely on a second-tier, and so on. Therefore, relocating factories or replacing all Chinese suppliers would be infeasible in the short-term. This chapter reviews the impact of supply chain disruption caused by COVID-19 on the South Korean economy and examines the future of regional supply chains centered on China. The rest of the paper is structured as follows. How supply chain disruption caused by COVID-19 will affect the South Korean economy, including trade, is discussed in Section 2. According to the latest national GDP report by the Bank of Korea (BOK), South Korea is going to see a mere 1 percent GDP contraction for 2020, the second-best performance among major economies behind only China. Reasons for why the South Korean economy was not seriously affected by the pandemic are also discussed in Section 2. Section 3 highlights the difficulty of reducing global supply chain reliance on China. China is likely to remain a key player, and the world must look at the reality that global supply chains are highly interconnected with China and that disconnecting from China’s supply chain is not an easy economic task for many multinational companies. The final section offers a few concluding remarks on deepening regionalism specifically in Asia, including policy implications for South Korea.
Topic:: Economics, COVID-19, and Supply Chains
Political Geography:: China, Asia, and South Korea

67. The Future of U.S. Supply Chains: National Security and the Pandemic

Author:: Troy Stangarone
Publication Date:: 07-2021
Content Type:: Journal Article
Journal:: Joint U.S.-Korea Academic Studies
Institution:: Korea Economic Institute of America (KEI)
Abstract:: The COVID-19 pandemic has been the most significant economic disruption to the international economy since the Great Depression. The IMF estimates that the global economy contracted by 3.5 percent last year, while the WTO has projected a 5.3 percent decline in global trade. The economic impact on the United States has been significant as well. Early in the pandemic the United States experienced shortages of critical medical supplies and products, while the need to social distance has continued to place restrictions on the overall economy. For 2020, the pandemic saw GDP decline by 2.3 percent, while exports fell by 12.9 percent and imports by 6.4 percent. All of this has resulted an increased focus on supply chains and their vulnerabilities.
Topic:: Economics, National Security, COVID-19, and Supply Chains
Political Geography:: China, Asia, North America, and United States of America

68. The Big Squeeze: Japanese Supply Chains and Great Power Competition

Author:: Mireya Solis
Publication Date:: 07-2021
Content Type:: Journal Article
Journal:: Joint U.S.-Korea Academic Studies
Institution:: Korea Economic Institute of America (KEI)
Abstract:: Japan led, and was transformed, by the global supply chain revolution. Facing growing protectionism in industrialized markets and reeling from sharp yen appreciation in the aftermath of the 1985 Plaza Accord, Japanese firms responded with a drastic increase in their overseas investment activities. In so doing, many of these companies spearheaded the movement towards the fragmentation of production across national boundaries that sought efficiency gains by pooling the competitive advantages of different locations. Japan’s experience with the first supply chain revolution was transformative. It altered its export-led model with important implications for its foreign policy. Japanese investments in the United States helped abate trade frictions; integrated production was at the heart of the project to rebuild relations with China, and Japan’s lead as foreign investor in Southeast Asia has been a pillar of its blueprint for regional integration. The strains in the rules-based international trade order, however, have raised questions about the ability of global supply chains to continue to operate effectively. The U.S.-China geopolitical rivalry has manifested in a damaging trade war, and moves to restrict tech flows are creating decoupling pressures. The COVID-19 pandemic has exacerbated these trends with lockdowns that disrupt supply chains while export protectionism and calls to renationalize production are on the rise. The intensified risk environment could lead to a second supply chain revolution with a greater emphasis on redundancy and diversification and bifurcation of productive chains. How will Japan respond to the challenges to international production, a central engine of its economic prosperity, and with what consequences for its relations with major powers? To provide greater clarity on this overarching question, this paper is organized as follows. Section 1 describes the central role of Japanese firms in the emergence and deepening of regional production networks. Although Japan’s overall share of intra-regional trade has decreased in the 21st century—in tandem with China’s rise as regional hub- Japanese firms have retained their central role in GVCs (Global Value Chains) through their advanced manufacturing capabilities. Section 2 offers a glimpse of past and recent supply chain shocks—China’s embargo of rare earth metals, the Great East Japan Earthquake in Tohoku, and the Japan-Korea export control dispute—to illustrate both sources of vulnerability and resilience of Japanese GVCs. Section 3 assesses the systemic shift brought about by revived great power competition, and identifies some early adjustment responses from Japanese firms to a new normal of heightened geopolitical tension.
Topic:: Economics, Strategic Competition, and Supply Chains
Political Geography:: Japan, China, and Asia

69. Hong Kong’s future on edge: Countering China’s national security law

Author:: Ash Jain, Joel Kesselbrenner, and Peter Mattis
Publication Date:: 06-2021
Content Type:: Special Report
Institution:: Atlantic Council
Abstract:: Over the past seventy-five years, the United States and its allies have constructed and defended a rules-based international system that has provided unprecedented levels of peace, prosperity, and freedom. In recent years, the system has come under increasing strain, as a new era of great power competition has emerged. Despite hopes that China would become a “responsible stakeholder” in a rules-based system, Beijing has grown increasingly assertive, especially under President Xi Jinping. Beijing’s more confrontational path poses a significant challenge to a rules-based system. The challenge presented by China is particularly acute in the context of Hong Kong, where the Chinese Communist Party (CCP) has brashly violated an international treaty and curtailed democratic institutions and human rights. As the world enters an era of strategic competition with China, Beijing’s actions in Hong Kong should be a priority for policymakers in the United States and allied countries. This report addresses the importance of Hong Kong within the context of China’s broader challenge to the rules-based system and offers recommendations for how the United States and its allies can prevent a further erosion of democracy in Hong Kong and, over time, seek to restore it. It suggests that the United States and its allies still have available a range of pragmatic policy tools that can can be used to exert pressure and impose meaningful costs on Beijing. These should be implemented as part of a broader, comprehensive strategy to prevent China from undermining the rules-based system in the security, economic, and governance domains. On June 30, 2020, the CCP imposed a sweeping new National Security Law on Hong Kong, effectively giving Beijing direct control over the autonomous territory. Since then, China has acted to erode Hong Kong’s liberal traditions, in violation of Beijing’s treaty commitments under the Sino-British Joint Declaration. The National Security Law has for all practical purposes outlawed democratic activism, organizing, and speech. Over the past year, Beijing has cracked down on Hong Kong’s democratic institutions and thrown the pro-democracy movement into disarray. Beijing’s crackdown in Hong Kong is aimed at achieving several objectives. First, China’s leaders seek to maintain the legitimacy of the CCP in the face of a pro-democracy movement that it fears could spread to the mainland. Second, they seek to advance the unification of China by harmonizing the cultural, social, and economic aspects of life across the country, including Hong Kong. Third, the CCP aims to achieve a comprehensive modernization of China, while retaining the Party’s leadership, including by reaping economic benefits from the Greater Bay Area Integration Plan. Finally, China’s crackdown is aimed at stemming the advance of a liberal, democratic world order by pushing back on democratic norms that it views as antithetical to the Party and a danger to its efforts to modernize China on its own terms.
Topic:: Diplomacy, Economics, Human Rights, Politics, Sanctions, and Business
Political Geography:: China, Asia, and Hong Kong

70. Ambitious Plans and Economic Pragmatism - China in the Face of Climate Change

Author:: Marcin Przychodniak
Publication Date:: 10-2021
Content Type:: Special Report
Institution:: The Polish Institute of International Affairs
Abstract:: China’s policy on climate change mainly serves to improve its international image, increase the competitiveness of its economy, and strengthen the legitimacy of the Communist Party’s (CPC) power. China’s activities include the development of green technologies and the announcement of a plan to reduce greenhouse gas (GHG) emissions by around 2030. However, the plans are unevenly implemented, sometimes even contrary to expectations, as evidenced by the construction of new coal-fired power plants. The problem of satisfying the country’s energy needs while protecting the environment means that the EU and the U.S. should treat China’s pro-climate declarations with caution.
Topic:: Climate Change, Economics, European Union, Green Technology, and Pragmatism
Political Geography:: China and Asia

71. 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

72. Xi Jinping’s Evergrande Dilemma

Author:: John Lee
Publication Date:: 09-2021
Content Type:: Policy Brief
Institution:: Hudson Institute
Abstract:: Evergrande is one of the top-two real estate developers in a still highly fragmented Chinese sector. Its main strategy is to achieve ever-increasing scale (rather than profitability) in order to move ahead of and crowd out commercial competitors. It has also amassed the largest land reserves of all Chinese developers, which were financed through massive borrowings. By 2018, Evergrande held 822 pieces of undeveloped land in 228 cities, with a planned gross floor area of 3.28 billion square feet of new homes—the equivalent of 10 percent of Germany’s entire housing stock. It paid $75 billion just for this undeveloped land. Although Evergrande’s market share is only around 4 percent, its borrowings stand out. Its current balance sheet liabilities amount to an estimated 2 percent of China’s gross domestic product (GDP), while its off-balance-sheet liabilities could be another 1 percent of China’s GDP. This makes Evergrande the most indebted property developer in the world. Burdened by this debt, struggling to meet its debt interest and repayment obligations, and viable only if property asset values and sales continue to increase, Evergrande faces possible financial collapse—an event bound to have flow-on effects for the Chinese economy. However, the unusually high global interest in Evergrande has arisen because its woes are increasingly seen as symptomatic of those faced by the broader Chinese economy, which is struggling with enormous levels of indebtedness and overreliance on the real estate sector. Debt held by nonfinancial institutions in China increased from about 115 percent of GDP in 2010 to around 160 percent of GDP currently. This is the most rapid and largest increase in a 10-year period for any major economy and makes the level of debt held by Chinese nonfinancial institutions one of the highest in the world. The real estate sector accounts for around 15 percent of GDP, while property services account for another 14 percent—the highest in any developing economy. The share of the real estate sector as a proportion of GDP was only about 4 percent in 1997 and 9 percent in 2008. Since 2008, up to a third of all domestic fixed investment has gone into real estate, and up to half of total national debt is linked to the real estate sector.
Topic:: International Relations, Foreign Policy, Debt, Economics, Markets, and Business
Political Geography:: China and Asia

73. Winning the Geo-Tech Battle and Building the Quad Alliance in the Indo-Pacific

Author:: Eric B. Brown, John Lee, and Thomas J. Duesterberg
Publication Date:: 04-2021
Content Type:: Policy Brief
Institution:: Hudson Institute
Abstract:: Under Xi Jinping, the People’s Republic of China (PRC) has established as its paramount geopolitical objective the replacement of the free and open, rules-based order in Asia with an alternative world order, one that is to be dominated by the interests and values of the Chinese Communist Party (CCP). This decision presents a danger to the entire world, not just to any one state or group of states. For, as US Secretary of State Antony Blinken said at the March 2021 US-PRC meeting in Alaska, the alternative to a rules-based order “is a world in which might makes right and winners take all, and that would be a far more violent and unstable world for all of us.” In furtherance of its objectives, the PRC is in the midst of a large military build-up, but there is much more. For today’s CCP, political power grows not only from the “barrel of the gun,” as Mao Zedong once put it, but also from cutting-edge technologies. Thus, while Beijing pours billions into artificial intelligence and surveillance tech to impose its new “digital totalitarianism” inside the PRC, from Hong Kong to Xinjiang, it is also using its growing technological prowess to press its larger geopolitical agenda in the Indo-Pacific and beyond. It is weaponizing technology and connectivity, along with trade, finance, and other policy instruments to try to rule the key technologies and industries of the future, as well as to improve its strategic positioning and acquire political power over other countries—for instance, through its bid to dominate other nations’ most sensitive data networks, or via the export of its suite of “social stability” technologies, i.e., the “techno-tyrant’s toolkit.” In all this, the CCP’s intent is to entrench its power and Leninist norms and practices to the extent it can do so beyond the PRC’s borders, and to make other nations, or at the least their ruling elites, beholden to it. So in addition to the PRC’s militarily destabilizing activities in the West Pacific and incursions into India’s Himalayas, there is also a “geo-technological front.” If Xi’s CCP succeeds at enmeshing other countries in its expanding “PRC sphere of technological influence,” it could unlock and be able to exploit decisive military, economic, diplomatic, and ideological advantages.
Topic:: International Relations, Security, Economics, and Alliance
Political Geography:: China, South Asia, East Asia, and Asia-Pacific

74. The Chinese Communist Party’s Economic Challenge to the Free World

Author:: Miles M. Yu
Publication Date:: 04-2021
Content Type:: Policy Brief
Institution:: Hudson Institute
Abstract:: The Chinese economy and the philosophical roots of China’s system have greater implications for the United States economy than many assume. The one critical fact to understand about the People’s Republic of China is that it is a communist dictatorship ruled by a Marxist-Leninist party. The Party is dedicated to maintaining and strengthening its monopoly on all powers in the world’s most populous country and to mounting the most serious challenge to the free world since the Cold War. This policy memo will examine the Chinese economy’s distinct traits, how it operates, and why it thrives under a monopolistic government that exploits and challenges the global free market system, along with possible policy recommendations for the United States and its allies. Unlike most other communist countries, China has been afforded the benefits of a global free-market system and enjoys largely open access to international trade, capital markets, and advanced technologies. The paradox of a communist nation fully participating in a largely capitalist system has enriched and strengthened the Chinese Communist Party (CCP), to the point where Beijing poses a mortal threat to the United States and to the international free market economic system that has enabled the rise of the communist state. The West played a role in creating the current state of play. But too many conversations in the United States focus only on our own strategic thinking. In his historic speech at the Richard Nixon Library in July 2020, former Secretary of State Mike Pompeo aptly described the situation and how we got here: “Our policies—and those of other free nations—resurrected China’s failing economy, only to see Beijing bite the international hands that were feeding it.” As President Richard Nixon admitted in his later years, his initiative to open up China in 1972 might have created a Frankenstein.
Topic:: Foreign Policy, Communism, Economics, and Chinese Communist Party (CCP)
Political Geography:: China, Asia, and United States of America

75. Transforming the Middle East: The Origins, Impact, and Evolution of the Abraham Accords

Author:: Robert Greenway
Publication Date:: 03-2021
Content Type:: Special Report
Institution:: Hudson Institute
Abstract:: The Abraham Accords constitute the beginning of a transformation of a region that has confounded many, and that will continue to be a vital battleground astride the security and economic interests of world powers. American leadership was a necessary but alone insufficient condition to the emergence of this agreement. American leadership will remain essential to its growth and evolution. The alignment of our regional partners and allies in both economic and security domains will ensure that the agreement endures. It will also incentivize others to join us in pooling critical capacities to advance and defend mutual interests. This transformation serves to constrain Iran – the threat from which has been recognized as causal – even as it constrains the malign influence and predatory practices of China and Russia. They will continue to manufacture and exploit fissures among the U.S. and its regional partners if we fail to exploit the favorable shift in the region’s security and economic architecture. On the other hand, appropriate support will allow the Abraham Accords to advance and secure America’s interests with the use of significantly fewer resources and with more capable partners integrated as never before.
Topic:: International Relations, Security, Foreign Policy, Diplomacy, Economics, and Negotiation
Political Geography:: Russia, China, Middle East, Israel, and Palestine

76. Directions of Innovation Policy: Contrasting Views of China and the US

Author:: Anna Jaguaribe and Kamila Aben Athar
Publication Date:: 08-2021
Content Type:: Special Report
Institution:: Brazilian Center for International Relations (CEBRI)
Abstract:: At the 24th China Analysis Group Meeting, experts analyzed the contrasting views of innovation policies in China and in the United States. The 14th five-year plan continues most of the economic efforts that characterized the last decade while also challenging some certain well-established elements. Internet development is still the dominant focus, but we can also observe the shift towards a service-based economy and high investment in infrastructure. According to the participants, one of the most relevant differences between the US and China is the way non-state actors are connected to the national government. American innovation efforts heavily feature research groups and private corporations having an active role, while in China the government puts up barriers that distort the market and influence it more directly. The tension between the two countries is stronger than ever and the new Biden administration brings a new set of uncertainties to the table, but at the same time, both China and the US are heavily dependent on each other economically. China’s efforts to expand its influence worldwide by negotiating with multiple countries will most likely exacerbate the conflict and talks regarding a decoupling, which currently seems unlikable.
Topic:: Foreign Policy, Economics, Markets, Infrastructure, and Innovation
Political Geography:: China, Asia, and United States of America

77. Vietnam Tacks Between Cooperation and Struggle in the South China Sea

Author:: International Crisis Group
Publication Date:: 12-2021
Content Type:: Special Report
Institution:: International Crisis Group
Abstract:: Together with the Philippines, Vietnam is on the front line of maritime disputes with China. The risk of armed confrontation is low but growing. Hanoi should redouble efforts to build confidence, starting with less sensitive issues, and to establish an effective Code of Conduct.
Topic:: Economics, Regional Cooperation, Maritime, Conflict, and Peace
Political Geography:: China, Asia, and Vietnam

78. Containing Crisis: Strategic Concepts for Coercive Economic Statecraft

Author:: Emily Kilcrease, Emily Jin, and Rachel Ziemba
Publication Date:: 12-2021
Content Type:: Special Report
Institution:: Center for a New American Security (CNAS)
Abstract:: As the United States and China seek to manage an increasingly tense relationship, both sides have turned to coercive economic statecraft as a core part of their broader foreign policy, with disruptive impacts on the global economic order. A growing body of research examines the use of coercive economic tools, including prior work by the CNAS Energy, Economics, and Security program. This report adds to that literature by specifically examining the use of coercive economic tools during periods of geopolitical crisis to assess their value in de-escalating tensions or deterring further economic coercion. The researchers developed scenario exercises to examine these dynamics, supported by a literature review and extensive engagement with subject matter experts. The insights from the research informed the development of two overarching strategic concepts intended to guide U.S. policymakers when deploying economic tools as part of a crisis management situation.
Topic:: Security, Foreign Policy, Economics, Bilateral Relations, and Crisis Management
Political Geography:: China, Asia, North America, and United States of America

79. 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

80. 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

81. Economic Sanctions as a Tool of China’s Hybrid Strategies

Author:: Rafal Wisniewski
Publication Date:: 01-2021
Content Type:: Journal Article
Journal:: Polish Political Science Yearbook
Institution:: Polish Political Science Association (PPSA)
Abstract:: The article aims to analyze the role of economic sanctions in the People’s Republic of China’s overall approach to achieving its security objectives in the international arena. During the last two decades, Beijing used this instrument on numerous occasions to exert pressure on a varied group of actors. China’s current strategy toward a range of disputes and conflicts it is engaged in (the South China Sea territorial disputes most prominently stand out) is often described using the popular vocabulary of “hybrid warfare” or “grey zone conflicts”. Putting the conceptual complications aside, the author agrees that the PRC’s approach can be viewed as part of a growing trend for great powers to employ what can be called “hybrid strategies” toward its opponents. As part of a broader category of economic statecraft, economic sanctions form an important element of this approach. Considering current scholarship on both “hybrid” (or “grey area”) warfare and economic sanctions, the article answers the question of why the PRC increasingly resorts to hybrid strategies (including economic coercion) and identifies the main characteristics of Chinese economic sanctions. It also provides preliminary conclusions on their effectiveness.
Topic:: Diplomacy, Economics, Territorial Disputes, and Sanctions
Political Geography:: China, Asia, and South China Sea

82. Protect, Constrain, Contest: Approaches for coordinated transatlantic economic and technological competition with China

Author:: François Chimits, Ashley T. Lenihan, Jonathan Liebenau, Stephen Paduano, Anthony Vinci, and Peter Watkins
Publication Date:: 01-2021
Content Type:: Special Report
Institution:: LSE IDEAS
Abstract:: The Biden Presidency offers opportunities for a renewed effort at formulating a coordinated allied approach to technological and economic competition with China. The latest report from China Foresight at LSE IDEAS provides a guiding framework for transatlantic coordination, and offers insights into key elements of future cooperation. While challenges abound, the opportunities for action prove just as great in number.
Topic:: Economics, Science and Technology, Transatlantic Relations, and Strategic Competition
Political Geography:: China, Asia, and United States of America

83. The Dragon Lands in Belgrade: The Drivers of Sino-Serbian Partnership

Author:: Vuk Vuksanovic
Publication Date:: 07-2021
Content Type:: Special Report
Institution:: LSE IDEAS
Abstract:: In recent years, the partnership between Serbia and China has been elevated to a historically unprecedented level. This partnership manifests itself through Chinese economic statecraft, technological partnership, security partnership, with political ties reaching an unprecedented degree during the COVID-19 pandemic. However, as Vuk Vuksanovic examines, the future of this partnership will be dependent on the trajectory of China’s relationship with the West. As US-China relations are becoming adversarial, and as China’s relations with the EU are shaken, it will become increasingly difficult and risky for Belgrade to maintain its ties with Beijing. From ‘vaccine diplomacy’ to ‘debt-trap diplomacy’, this Strategic Update examines the Sino-Serbian partnership we are witnessing and what the future has in store for Serbian policymakers.
Topic:: Security, Foreign Policy, Economics, Partnerships, and COVID-19
Political Geography:: China, Asia, and Serbia

84. How Can America Challenge China's Political Ambitions in an Age of Deglobalisation?

Author:: Dimitri Zabelin
Publication Date:: 09-2021
Content Type:: Working Paper
Institution:: LSE IDEAS
Abstract:: COVID-19 has accelerated the trend of deglobalisation and further entrenched China into the growing political and economic fort of Asia. This has made the US less effective at implementing policies aimed at curbing Beijing’s political ambitions and strength in the region. Washington must therefore make itself indispensable in Asia and employ strategies for bringing China into a global network that can collectively reign in the Asian giant’s growing influence.
Topic:: Economics, Politics, Strategic Competition, and COVID-19
Political Geography:: China, Asia, North America, and United States of America

85. Melons as Lemons: Asymmetric Information, Consumer Learning and Seller Reputation

Author:: Jie Bai
Publication Date:: 03-2021
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: There is often a lack of reliable quality provision in many markets in developing countries and firms generally lack a reputation for quality. One potential explanation is that mistrust due to past bad behavior can make reputation-building difficult. I examine this hypothesis in a setting that features typical market conditions in developing countries: the retail watermelon markets in a major Chinese city. I first demonstrate empirically that there is substantial asymmetric information between sellers and buyers on quality and a stark absence of quality premium at baseline. I then randomly introduce one of two branding technologies into 40 out of 60 markets–one sticker label that is widely used and counterfeited and one novel expensive laser-cut label. The experiment findings show that laser-branding induced sellers to provide higher quality and led to higher sales profits. However, after the intervention was withdrawn, all markets reverted back to baseline. I incorporate the experimental variation into an empirical model of consumer learning and seller reputation building. The results suggest that consumers are hesitant to upgrade their perception under stickers, which makes reputation-building a low-return investment. While the new technology enhances learning, the resulting increase in profits is not sufficient to cover the fixed cost of the technology for small individual sellers. Counterfactual analysis shows that information friction and fragmented market lead to significant under-provision of quality.
Topic:: Economics, Markets, and Developing World
Political Geography:: China, Asia, and Global Focus

86. China's Belt and Road Initiative and Georgia: A Short Overview

Author:: Ekaterine Lomia
Publication Date:: 09-2021
Content Type:: Journal Article
Journal:: Journal of Liberty and International Affairs
Institution:: Institute for Research and European Studies (IRES)
Abstract:: Since the beginning of the 2000s, China has embarked on an unprecedented path of economic development, as evidence of which is the largest economic project of the XXI century initiated by the People's Republic of China. The global Belt and Road Initiative announced by the first person of the country, Xi Jinping, is a shortened name of the ‘Silk Road Economic Belt’ and ‘XXI Century Maritime Silk Road’. It covers the Asia-Pacific, Europe, Central Asia, Southeast Asia, West Asia, and Africa and involves more than a hundred countries, international organizations, and leading economic actors. The main participants in the project are China, Mongolia, Russia, Azerbaijan, Belarus, Poland, Germany, the Netherlands, Kazakhstan, Kyrgyzstan, Pakistan, Bangladesh, Iran, and India. The article reviews the role of the Chinese project in a global context. The paper focuses on the role and purpose of Georgia in the Belt and Road Initiative. This study will try to reveal the results for the benefit of Georgia, which is one of the participating countries, and the role of China through research to be made from documents and academic studies on the subject. Georgia tries to conduct its relations with China, as a partner in the project, with a policy of balance without disturbing its relations with the West.
Topic:: Economics, Bilateral Relations, Infrastructure, Hegemony, and Belt and Road Initiative (BRI)
Political Geography:: China, Europe, Asia, and Georgia

87. Ahead of Biden-Moon Summit, South Koreans and Americans Align on China and North Korea

Author:: Karl Friedhoff and Suh Young Park
Publication Date:: 05-2021
Content Type:: Commentary and Analysis
Institution:: Chicago Council on Global Affairs
Abstract:: Chicago Council survey data find majorities in South Korea view China as more of a security threat than a security partner and as more of an economic threat than an economic partner. On May 21, South Korea’s President Moon Jae-in will meet President Joe Biden at the White House. In his first 100 days in office, Biden’s foreign policy has focused on repairing alliances and setting the administration’s policy toward China—in March and April alone, the administration participated in US-China talks in Alaska, 2+2 meetings in South Korea and Japan, trilateral talks among national security advisers, and Japanese Prime Minister Yoshihide Suga's visit to Washington. Moon’s visit will add North Korea to the agenda. The two leaders meet at a time when there are significant gaps on their preferred paths forward to dealing with Beijing and Pyongyang. However, recent Chicago Council surveys find that attitudes among publics in South Korea and the United States are remarkably similar when it comes to China and North Korea.
Topic:: Security, Foreign Policy, Economics, and Public Opinion
Political Geography:: China, Asia, South Korea, North America, and Southeast Asia

88. Decoupling Europe

Author:: Gabriel Felbermayr, Steffen Gans, Hendrik Mahlkow, and Alexander Sandkamp
Publication Date:: 07-2021
Content Type:: Policy Brief
Institution:: Kiel Institute for the World Economy (IfW)
Abstract:: The COVID-19 pandemic revealed the vulnerability of international value chains in the face of global shocks. This has triggered a political discussion regarding a possible reshoring of vulnerable supply chains back home. The aim is to reduce dependencies on foreign suppliers and thus improve crisis resilience of the domestic economy. The debate is also rooted in the growing dependence on Asian suppliers and the colliding political and ideological systems between China and the West. Unilateral decoupling of the EU from China (a doubling of trade costs) would reduce real income in the EU on average by 0.8 percent. In terms of GDP in 2019, this equals a permanent loss in real income of 131.4 bn EUR. Should China retaliate, real income would fall by 1.0 percent (170.3 bn EUR). With its extremely interconnected economy, real income in Germany would even decline by 1.4 percent (48.4 bn EUR). China would also lose from such a trade war, with real income declining by 1.3 percent. Should the EU increase its trade barriers against all its non-European trading partners, real income in the Union would fall by 3.5 percent or 584.3 bn EUR in case of a unilateral increase and by 5.3 percent or 873.1 bn EUR in case the rest of the world responds by also raising trade barriers.
Topic:: Economics, Regional Cooperation, European Union, Economic Cooperation, Pandemic, and COVID-19
Political Geography:: China and Europe

89. Currency Power & International Security

Author:: Benjamin Cohen
Publication Date:: 12-2021
Content Type:: Journal Article
Journal:: Fletcher Security Review
Institution:: The Fletcher School, Tufts University
Abstract:: For anyone concerned about U.S. national security, international finance today poses an intriguing dilemma. On the one hand, in geopolitical terms, the United States seems to have entered a period of relative decline. Some commentators speak of a broad power transition from unipolar hyperpuissance to a new, more threatening multipolar world. Others focus more narrowly on the rise of China and the risk of a “Thucydides Trap.”72 Yet in global finance, the U.S. dollar remains undeniably dominant, still by far the most popular national monetary unit in use for international purposes.73 The greenback is as mighty as ever. Can this disparity continue, or should we expect that geopolitical decay will be followed by—perhaps even exacerbated by—an erosion of the dollar’s standing? Much rides on the answer. An international currency is a source of power for the economy that issues it.74 For some three-quarters of a century, the greenback’s central role in monetary affairs has enhanced the political capabilities of the United States. America’s security has been amplified by currency power. At a time, therefore, when the nation is feeling increasingly vulnerable to adversaries abroad, the outlook for the dollar’s future takes on added importance. Three questions are addressed in this essay. First, how does a currency’s international standing affect the political capabilities of the issuing country? Second, how has currency power been used by the United States? And third, what are the prospects for the greenback looking forward? Much analysis suggests that the outlook for the currency is not bright.75 Some experts worry that we are approaching a tipping point that could lead to an abrupt and panicky dumping of the dollar. I disagree. No sudden rush to the exits would appear to be likely. But over time it does seem plausible to anticipate a gradual, maybe even accelerating loss of monetary primacy. The threat to the greenback—and hence to U.S. security—is not the sudden appearance of a wolf at the door. The risk, rather, is a persistent spread of termites in the woodwork.
Topic:: Economics, International Security, Geopolitics, Finance, and Currency
Political Geography:: China and United States of America

90. How China Loses: The Pushback Against Chinese Global Ambitions

Author:: Luke Patey and Elizabeth Wishnick
Publication Date:: 03-2021
Content Type:: Video
Institution:: Weatherhead East Asian Institute, Columbia University
Abstract:: From its Belt and Road Initiative linking Asia and Europe, to its "Made in China 2025" strategy to dominate high-tech industries, to its significant economic reach into Africa and Latin America, China is rapidly expanding its influence around the globe. Many fear that China's economic clout, tech innovations, and military power will allow it to remake the world in its own authoritarian image. But despite all these strengths, a future with China in charge is far from certain. Rich and poor, big and small, countries around the world are recognizing that engaging China produces new strategic vulnerabilities to their independence and competitiveness. Researching the book took Dr. Patey to East Africa, Latin America, Europe, and East Asia over the past five years and he will discuss how countries in these parts of the world are responding to China’s rise and assertiveness. This event was cosponsored by the Weatherhead East Asian Institute, the APEC Study Center and the Columbia Harvard China and the World Program at Columbia University.
Topic:: Diplomacy, Economics, Geopolitics, Soft Power, and Belt and Road Initiative (BRI)
Political Geography:: China and Asia

91. U.S. Economic Challenges for the Biden Administration

Author:: Paweł Markiewicz
Publication Date:: 06-2021
Content Type:: Special Report
Institution:: The Polish Institute of International Affairs
Abstract:: The U.S. economy is emerging from the recession caused by the COVID-19 pandemic. To maintain growth and at the same time achieve climate and technology goals, the Biden administration is pushing large socio-economic programmes. To pass them in Congress, the administration will be forced to reach compromises with factions within the Democratic Party. Biden also will need some Republican support. In foreign policy, these programmes aim to strengthen the U.S. position in its rivalry with China, something that also opens greater possibilities for closer cooperation with the EU.
Topic:: Economics, Politics, COVID-19, and Joe Biden
Political Geography:: China, North America, and United States of America

92. The Vision Group on U.S.-ROK Relations: Insights and Recommendations

Author:: KEI
Publication Date:: 01-2021
Content Type:: Working Paper
Institution:: Korea Economic Institute of America (KEI)
Abstract:: The Korea Economic Institute of America (KEI), with the generous support of the Korea Foundation, organized six “Vision Group” roundtable conversations with leading American scholars and commentators to discuss the United States’ relationship with the Republic of Korea. The first was held in December 2019, the last in November 2020. The intent was to consider the future of relations during a time of change. The Vision Group comprised a wide range of expertise and opinion. This record conveys some of the insights and recommendations that arose during the conversations.
Topic:: International Relations, Security, Foreign Policy, Economics, and Human Rights
Political Geography:: China, Asia, South Korea, North Korea, and United States of America

93. Limits of Public Diplomacy and Soft Power: Lessons from the THAAD Dispute for South Korea's Foreign Policy

Author:: Maximilian Ernst
Publication Date:: 04-2021
Content Type:: Working Paper
Institution:: Korea Economic Institute of America (KEI)
Abstract:: This paper examines South Korea’s foreign policy towards China before, during, and after the Terminal High Altitude Area Defense (THAAD) missile defense dispute to investigate the limits of South Korea’s public diplomacy and soft power. South Korea’s official public diplomacy has the objective to “gain global support for Korea’s policies,” following Joseph Nye’s narrow definition of soft power. South Korea furthermore ranks high in the most relevant soft power indices. Based on the case of Chinese economic retaliation against South Korea in response to THAAD deployment, this paper argues that public diplomacy and soft power only work in the absence of traditional security contentions, but fail in the presence of such security contentions. The THAAD case also demonstrates the utility of traditional diplomacy, based on high-level summits and negotiations, to solve the very disputes that South Korea’s latent public diplomacy and soft power were unable to alleviate.
Topic:: International Relations, Foreign Policy, Diplomacy, Economics, and Weapons
Political Geography:: China, Asia, South Korea, and Korea

94. The Coast Guard Law: China's Readiness for a Maritime Military-Civil Fusion Strategy

Author:: Chisako T. Masuo
Publication Date:: 04-2021
Content Type:: Research Paper
Institution:: Japan Institute Of International Affairs (JIIA)
Abstract:: The core problem in the Chinese Coast Guard Law is that it shows the Chinese authorities' readiness to use it as a domestic foundation for implementing a maritime military-civil fusion (MCF) strategy aimed at establishing Chinese control inside the first island chain in East Asia. China has improved its surveillance capabilities over the ocean dramatically in last years. Intentionally adopting an ambiguous strategy mingling security and economic affairs altogether, China is trying to expand its maritime sphere of influence and even make incursions into others' waters, using private fishermen as well as civilian officials and military personnel as the situation demands. Countries that share concerns with China should strengthen international technical cooperation in strategic domains and build seamless surveillance systems to keep an eye on various Chinese actors' external activities.
Topic:: Security, Economics, Maritime, Coast Guard, and Readiness
Political Geography:: China and Asia

95. U.S. Trade Policy toward China: Learning the Right Lessons

Author:: Scott Lincicome
Publication Date:: 01-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Labor market and cultural disruptions in the United States are real and important, as is China’s current and unfortunate turn toward illiberalism and empire. But pretending today that there was a better trade policy choice in 2000—when Congress granted China “permanent normal trade relations” (PNTR) status and paved the way for broader engagement—is misguided. It assumes too much, ignores too much, and demands too much. Worse, it could lead to truly bad governance: increasing U.S. protectionism; forgiving the real and important failures of our policymakers, CEOs, and unions over the last two decades; and preventing a political consensus for real policy solutions. Indeed, that is happening now.
Topic:: International Relations, Economics, Markets, Bilateral Relations, Trade, and Protectionism
Political Geography:: China, Asia, North America, and United States of America

96. Financial Development in Hong Kong and China: A Hayekian Perspective

Author:: Kam Hon Chu
Publication Date:: 01-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: In addition to foreign investment absorption, Hong Kong plays a pioneering role in the internationalization of the renminbi (RMB). Despite the lack of comprehensive statistics on the volume of offshore RMB transactions, Hong Kong is for sure one of the largest, if not the largest, global centers for offshore RMB businesses. According to the Triennial Central Bank Survey (BIS 2019), for instance, Hong Kong was the largest global offshore RMB foreign exchange market, with an average daily turnover of US$107.6 billion as of April 2019, considerably higher than the US$56.7 billion for London and the US$42.6 billion for Singapore.
Topic:: Economics, Markets, Investment, and Financial Development
Political Geography:: China, Asia, and Hong Kong

97. Promise and Peril of Digital Money in China

Author:: Martin Chorzempa
Publication Date:: 06-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Digital currency and fintech have been some of the most powerful forces for freedom and personal liberty in China for the past decade, but their future influence is uncertain. Starting as a disruptive force that gave Chinese unprecedented autonomy in their financial lives, connected either to global cryptocurrency networks or local tech ecosystems built by private firms, a new chapter is beginning. In this new era, one speech urging an emphasis on innovation instead of regulation can seemingly bring the full force of the Chinese state to bear onto a firm that once disrupted state banks with impunity. Technologies like blockchain first embraced by libertarians and cryptography enthusiasts as freeing money from dependence on the state look poised to become tools for governments to increase their ability to monitor and shape financial transactions. Meanwhile, disruptive fintech tools have become symbiotic with the major state banks, which will retain their role as the core of the financial system.
Topic:: Economics, Science and Technology, Finance, Digital Currency, and Transactions
Political Geography:: China and Asia

98. What if …? Economic consequences for Australia of a US-China conflict over Taiwan

Author:: David Uren
Publication Date:: 06-2021
Content Type:: Special Report
Institution:: Australian Strategic Policy Institute (ASPI)
Abstract:: hat if China were to attempt to seize Taiwan by force and the US and allies responded militarily? One consequence would be the disruption of China’s trade with many countries, including Australia. While strategic analysts have been working over such scenarios for years, there’s been little study of the likely economic consequences. This study is focused on the short-term shock to Australia’s economy. The objective is to contribute to an understanding of the nature of Australia’s economic relationship with China and the likely paths of adjustment should that trade be severed. It also explores the options available to the Australian Government to ameliorate the worst of the effects of what would be a severe economic shock. The conclusion of this report is that the disruption to the Australian economy would be significant. There would be widespread loss of employment, along with consumer and business goods shortages that would be likely to necessitate rationing.
Topic:: Foreign Policy, Defense Policy, Economics, National Security, and Conflict
Political Geography:: China, Taiwan, Asia-Pacific, and United States of America

99. Tehran Signals: Uncovering the limitations of the Chinese Iranian agreement

Author:: Mervat Zakaria
Publication Date:: 04-2021
Content Type:: Commentary and Analysis
Institution:: Future for Advanced Research and Studies (FARAS)
Abstract:: Uncovering the limitations of the Chinese Iranian agreement The Economic Cooperation Agreement signed between Iran and China in March 2021 unfolded a development plan that includes China injecting $ 400 billion into various sectors of the Iranian economy. This grants Tehran an opportunity to increase the pressures imposed on the new US administration, regarding resumption of the Joint Comprehensive Plan of Action held with the P5+1 in 2015, as well as confronting the surrounding regional threats and alleviating internal pressures by improving the Iranian standard of living.
Topic:: Economics, International Cooperation, and Treaties and Agreements
Political Geography:: China, Iran, Middle East, and Asia

100. ‘A careful foot can step anywhere’: The UAE and China in the Horn of Africa: Implications for EU engagement

Author:: Jos Meester and Guido Lanfranchi
Publication Date:: 06-2021
Content Type:: Policy Brief
Institution:: Clingendael Netherlands Institute of International Relations
Abstract:: Over the last decade, the UAE and China have vastly expanded their economic, political and military footprint in the Horn of Africa, and their actions now have the potential to shape developments in the region. Room for cooperation between Abu Dhabi and Beijing exists on issues such as maritime security, regional stability, and economic development. Moreover, the two countries’ interaction could lead to improvements in the Horn’s underdeveloped infrastructure by triggering a race to investment. Yet, development and stability in the region might suffer if the strategic interests of external players take precedence over local ones, or if local elites (mis)use external support for narrow domestic political calculations. The EU and its member states have high stakes in the Horn’s stability. To optimise their engagement, European policymakers should be aware of the implications of the Emirati and Chinese presence, and they should strive to improve cooperation among the wide range of external players active in the Horn.
Topic:: Economics, International Cooperation, Politics, Military Affairs, Economic Development, and Economic Stability
Political Geography:: Africa, China, Asia, and Horn of Africa

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COLUMBIA UNIVERSITY PRESS