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202. How China lends: A rare look into 100 debt contracts with foreign governments
- Author:
- Anna Gelpern, Sebastian Horn, Scott Morris, Brad Parks, and Christoph Trebesch
- Publication Date:
- 05-2021
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- China is the world’s largest official creditor, but basic facts are lacking about the terms and conditions of its lending. Very few contracts between Chinese lenders and their government borrowers have ever been published or studied. This paper is the first systematic analysis of the legal terms of China’s foreign lending. The authors collect and analyze 100 contracts between Chinese state-owned entities and government borrowers in 24 developing countries in Africa, Asia, Eastern Europe, Latin America, and Oceania, and compare them with those of other bilateral, multilateral, and commercial creditors. Three main insights emerge. First, the Chinese contracts contain unusual confidentiality clauses that bar borrowers from revealing the terms or even the existence of the debt. Second, Chinese lenders seek advantage over other creditors, using collateral arrangements such as lender-controlled revenue accounts and promises to keep the debt out of collective restructuring (“no Paris Club” clauses). Third, cancellation, acceleration, and stabilization clauses in Chinese contracts potentially allow the lenders to influence debtors’ domestic and foreign policies. Even if these terms were unenforceable in court, the mix of confidentiality, seniority, and policy influence could limit the sovereign debtor’s crisis management options and complicate debt renegotiation. Overall, the contracts use creative design to manage credit risks and overcome enforcement hurdles, presenting China as a muscular and commercially savvy lender to the developing world.
- Topic:
- Foreign Policy, Debt, Government, and Banking
- Political Geography:
- China and Asia
203. A Vision of the Future: The U.S. Intelligence Report “Global Trends 2040”
- Author:
- Marcin Andrzej Piotrowski
- Publication Date:
- 06-2021
- Content Type:
- Special Report
- Institution:
- The Polish Institute of International Affairs
- Abstract:
- In April 2021, the U.S. intelligence community published the extensive report “Global Trends 2040: A More Contested World”. It analyses the main demographic, political, and strategic trends that will likely shape the world for the next two decades. The report will be intensively used by the Biden administration in the preparation of the new U.S. National Security Strategy and National Defense Strategy, as well as in new military doctrines. The “Global Trends” document reflects the main tendencies in American strategic thinking, such as the growing “Sinocentrism” and traditional U.S. attachment to transatlantic relations.
- Topic:
- Foreign Policy, Climate Change, Intelligence, and Strategic Planning
- Political Geography:
- China and United States of America
204. A Crash Test: EU Strategic Autonomy in the Foreign Policy of France
- Author:
- Łukasz Maślanka
- Publication Date:
- 03-2021
- Content Type:
- Special Report
- Institution:
- The Polish Institute of International Affairs
- Abstract:
- France uses the idea of EU strategic autonomy as a tool in its own foreign policy. France’s aim is to redefine the Union’s partnership with the U.S. and NATO. Hence, the activity of President Emmanuel Macron in emphasising the differences between the positions of the U.S. and the EU, especially in relations with China and Russia. Macron’s rhetoric worries other European countries and hides the real problems in EU security policy, such as insufficient financing of the Common Security and Defence Policy as well as the lack of a clear definition of strategic autonomy.
- Topic:
- Security, Foreign Policy, European Union, and Strategic Autonomy
- Political Geography:
- Russia, China, Europe, France, and United States of America
205. NATO on the Road to a New Strategy
- Author:
- Wojciech Lorenz
- Publication Date:
- 01-2021
- Content Type:
- Special Report
- Institution:
- The Polish Institute of International Affairs
- Abstract:
- During the meeting of NATO foreign ministers on 2–3 December 2020, a group of experts presented the report “NATO 2030. United for a New Era” about strengthening the political dimension and consultation mechanisms of the Alliance. The report indicates a possible consensus on the expansion of the Alliance’s tasks, including on a common policy towards China. The document increases the chances that the allies will decide to start work on a new NATO strategy.
- Topic:
- Foreign Policy, NATO, Military Strategy, Alliance, and Strategic Interests
- Political Geography:
- China, Europe, and United States of America
206. 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
207. 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
208. Handling "Value" in the US-China Conflict
- Author:
- Naoko Funatsu
- Publication Date:
- 05-2021
- Content Type:
- Research Paper
- Institution:
- Japan Institute Of International Affairs (JIIA)
- Abstract:
- The escalating confrontation between the United States and China has been one of the most important issues in American foreign policy in recent years. The weight of US foreign policy toward China has increased as China's presence in the international community has grown. This is due to China's remarkable economic growth, and many countries around the world sought to incorporate the booming Chinese economy into the international economy to promote their own economic growth; the United States had been no exception. As globalization and China's economy continued to grow, however, the trade imbalance between the US and China expanded, and the trade deficit with China became an issue in the US. In the US presidential election of November 2016, Republican candidate Donald J. Trump made correcting the trade deficit with China a policy priority and was elected. When the administration took office in January 2017, it was marked by a discourse based on economic nationalism, one of the characteristics of a Trump administration committed to putting "America first".
- Topic:
- Foreign Policy, Globalization, Bilateral Relations, Economy, and Trade
- Political Geography:
- China, Asia, North America, and United States of America
209. Can China Practice Major Power Diplomacy in the Middle East?
- Author:
- Masaaki Yatsuzuka
- Publication Date:
- 06-2021
- Content Type:
- Research Paper
- Institution:
- Japan Institute Of International Affairs (JIIA)
- Abstract:
- There is no question that China's presence in the Middle East is growing significantly. Will China continue to deepen its involvement in the region and play a role in shaping the regional order, taking the place of the United States? In other words, will China practice major power diplomacy in the Middle East? The view among researchers in China and elsewhere1 over this question is divided. To categorize their arguments into two camps, there is a cautious engagement theory that warns against the risk of getting caught up in the turmoil in the Middle East and recommends (or predicts) that China protect its economic interests while maintaining political neutrality vis-à-vis the Middle East as it has done so far. On the other hand, there is an active engagement theory advocating (or foreseeing) that China deepen its engagement, proactively participate based on the responsibility of a major world power in solving problems in the Middle East, and actively propose its own ideas in order to protect Chinese interests in the Middle East.
- Topic:
- International Relations, Foreign Policy, Diplomacy, and Geopolitics
- Political Geography:
- China, Middle East, and Asia
210. Australia's South China Sea Challenges
- Author:
- Malcolm Cook
- Publication Date:
- 05-2021
- Content Type:
- Policy Brief
- Institution:
- Lowy Institute for International Policy
- Abstract:
- China will not agree to a South China Sea Code of Conduct (COC) that is consistent with the 2016 South China Sea arbitral tribunal ruling, and therefore any COC which China agrees with the Association of Southeast Asian Nations (ASEAN) will harm Australia’s interests. But a lack of Australian support for such a Code would aggravate relations with Southeast Asian states and ASEAN, and with China. Australia should use the time afforded by the drawn-out Code of Conduct negotiations to coordinate with the five littoral Southeast Asian states affected by China’s unlawful maritime claims. Australia should emphasise the need for consistency with international law, especially the 2016 arbitral ruling. The Biden administration is likely to increase pressure on Australia to conduct freedom of navigation operations (FONOPS) in the South China Sea. Such action may risk a significant Chinese response against Australia.
- Topic:
- Foreign Policy, Territorial Disputes, Maritime, Alliance, and Freedom of Movement
- Political Geography:
- China, Australia, Southeast Asia, Asia-Pacific, United States of America, and South China Sea