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51. Ensuring Energy Security and Carbon Neutrality: Implications for Korea

Author:
Jinyoung Moon, Seung Kwon Na, Sunghee Lee, and Eunmi Kim
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The international community faces two major challenges: securing stable energy supplies and achieving carbon neutrality. Concerns about energy security that aroused due to the oil crises in the 1970s are no longer limited to the stable supply of fossil fuels. The concept of energy security is changing in line with the need for transition from fossil fuels to clean energy. As energy prices have soared due to the recent Russia-Ukraine war, major countries are actively pursuing related policies and external cooperation to diversify their energy supply chain and decarbonize their economic structures. In order to appropriately respond to these challenges, continuous efforts are needed to gradually reduce the use of fossil fuels and in crease the use of clean energy in the medium to long-term. In particular, as the proportion of power generation from variable renewable energy sources increases, maintaining the stability of the power grid becomes a more important task. Demand for minerals essential for clean energy related technologies is expected to increase, however, production of these minerals is concentrated in specific countries. Major concerns related to carbon neutrality or clean energy investment include whether sufficient investment is being made, whether funds are being directed to countries or sectors in urgent need of financial support, and how to induce private investment through public funds. Accordingly, our study analyzed energy security from the perspective of energy transition, and derived key issues and notable cases of international cooperation to ensure energy security and carbon neutrality. Based on our findings, we suggested policy implications for Korea.
Topic:
Climate Change, Fossil Fuels, Carbon Emissions, Russia-Ukraine War, and Energy Security
Political Geography:
Asia and South Korea

52. The New Cold War Is Sending Tremors through Northeast Asia

Author:
Tricontinental: Institute for Social Research
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Tricontinental: Institute for Social Research
Abstract:
This dossier looks at how the US-led New Cold War against China is destabilising Northeast Asia, focusing on the Korean Peninsula, Taiwan Strait, and Japan.
Topic:
Foreign Policy, Geopolitics, Strategic Competition, Destabilization, and Post-Cold War
Political Geography:
Japan, China, Taiwan, Asia, Korea, and United States of America

53. Competing Values Will Shape US-China AI Race

Author:
Valerie Shen and Jim Kessler
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Third Way
Abstract:
President Biden’s AI executive order reflects a set of values recognizable to all Americans: Privacy, equal treatment and civil rights; free speech and expression; the rule of law; opportunity and free market capitalism; pluralism; and advancement of global leadership as the beacon of a free world. President Xi Jinping’s government has also issued AI regulations with values recognizable to China: Collectivism and obedience to authority; social harmony and homogeneity; market authoritarianism and rule of state; and digital world hegemony to restore China’s rightful place as the Middle Kingdom. The United States and China may share similar broad goals for “winning” AI along the lines of leading innovation and advancement, spurring broad-based economic growth and prosperity, achieving domestic social stability, and becoming the clear global influencer for the rest of the world—but they define those goals and seek to achieve those ends through very different values. Those values embedded in our respective AI policies and underlying technology carry high-stakes, long-term national and economic security implications as US and Chinese companies compete directly to become dominant in emerging global markets. They also share similar fears that reflect each country’s values. China worries that AI could cause social unrest if information to a sheltered population is too real and unfiltered. America fears that AI could cause social unrest if information Americans receive is too fake. And that massive disinformation and algorithms that rile the population could threaten our democratic system. Why do these value differences matter when it comes to the AI race? Below, we outline six contrasting values that we believe will be the most determinative in how the US-China AI competition plays out. We argue that understanding our different values-based approaches illuminates our respective advantages and disadvantages in this competition. It assesses who is currently set up to “win” across key metrics and determines how to lean into our democratic advantages or mitigate some practical disadvantages compared with the PRC, this will ultimately win the AI marathon.
Topic:
Science and Technology, Artificial Intelligence, and Strategic Competition
Political Geography:
China, Asia, North America, and United States of America

54. Nuclear China in the Twenty-First Century: Status and Implications for the World and Europe

Author:
David Santoro
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
James Martin Center for Nonproliferation Studies
Abstract:
In August 2021, shortly after new evidence surfaced that China might be expanding its nuclear arsenal much more extensively and rapidly than previously assumed, Admiral Charles Richard, Commander of the U.S. Strategic Command, described Beijing’s military investments as a “strategic breakout.” He underscored that the “explosive growth and modernization of [China’s] nuclear and conventional forces can only be what I describe as breathtaking,” adding that “that word, breathtaking, may not be enough.” Since then, several senior officials in the United States, Europe, and elsewhere have echoed that message and the final report of the bipartisan Congressional Commission on the Strategic Posture of the United States published in October 2023 concluded that at its current pace, China “will reach rough quantitative parity with the United States in deployed nuclear warheads by the mid-2030s.” The result has been the emergence of work, including by this author, to understand this unprecedented development. This work is in its infancy, however, and more is needed to grasp the scale and scope of Chinese nuclear modernization (especially given that much of it is shrouded in secrecy) as well as its implications for strategic stability, deterrence, and arms control and risk reduction. Existing work has focused primarily on the implications for the United States and, to some extent, the United States and Russia. Yet it is also important to grapple with the implications for Europe, especially the North Atlantic Treaty Organization (NATO), and reflect on actions that Europeans, individually or with others, should take in response.
Topic:
NATO, Nuclear Weapons, Nonproliferation, and Modernization
Political Geography:
China, Europe, and Asia

55. Beyond Target: Indirect Impacts of Antidumping

Author:
Sébastien Jean and Kevin Lefebvre
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper investigates the bilateral impacts of antidumping measures, beyond directly targeted products and exporting firms. It focuses on the country whose exports are most exposed to such measures, China. Productlevel analysis shows that export volumes are negatively affected for products similar to a product targeted by an antidumping case, i.e. belonging to the same tariff heading. Using firm-level data, we show that this impact is driven by within-firm contagion: targeted firms not only cut their exports of targeted products, they also reduce significantly their exports of non-targeted products. The decrease is half as large for the latter than for the former, but the total impact on bilateral trade is far larger, because the value of export flows affected by these indirect impacts is ten times larger than the value of directly targeted export flows. In addition, interestingly, this effect is more pronounced for small and private firms.
Topic:
Business, Exports, Trade, Spillovers, and Antidumping
Political Geography:
China and Asia

56. Japan’s Approach to the Global South

Author:
Tobias Harris
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
Japanese Prime Minister Fumio Kishida, in a January 2023 speech in Washington, DC, stressed that if the G7 countries and their developed-world peers neglect the “Global South”, “we will find ourselves in the minority and unable to resolve mounting policy issues.” These remarks set the stage for a major theme of Japan’s G7 presidency that year, during which Tokyo continued to highlight the importance of more “humility” to strengthen relations between the group’s members and the “Global South”. The G7 leaders’ communiqué at their May 2023 Hiroshima summit did not refer explicitly to the Global South—the United States and other nations did not necessarily share Japan’s preference for the term, which risks treating as monolithic an enormously diverse array of countries—but the document stressed the importance of addressing the needs of middle- and low-income states, including a commitment to “continued efforts to scale up official development assistance (ODA)” and to adopting “innovative financing mechanisms”. This emphasis on outreach to the developing countries assumed greater urgency following Russia’s invasion of Ukraine, when they were often reluctant to support Western efforts to isolate and punish the Kremlin for its aggression. Japan’s approach to the “Global South” is not merely rhetorical. The Kishida government inherited a long-standing approach to developing nations, particularly those in Asia, that seeks to leverage Japanese ODA and public and private investment. The approach has two goals: to promote growth and strengthen economic ties with developing countries, and to foster trust and political credibility that can be translated into influence. The strategy is shaped by Japan’s national interests but seeks to address developing countries’ economic needs without drawing them into an anti-Beijing bloc. The approach has worked well in Southeast Asia, where, thanks to decades of efforts by successive governments, Japan is viewed particularly favorably. Tokyo now appears increasingly determined to pursue the same strategy in other parts of the “Global South”, including South Asia, the Pacific island states, and, to a lesser extent, Africa and Latin America. As Japan’s G7 peers seek to undertake their own initiatives to improve relations with the “Global South”, the key principles and successes of the country’s policies are worth examining.
Topic:
Foreign Policy, Economics, Democracy, Business, Global South, and Trade
Political Geography:
Japan, Asia, and Indo-Pacific

57. Next-Generation Perspectives on Taiwan: Insights from the 2024 Taiwan-US Policy Program

Author:
Bonnie S. Glaser, Joshua Stone, Alicja Bachulska, Viking Bohman, and Francesca Ghiretti
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
The papers in this compendium were written by 11 members of the 2024 Taiwan-US Policy Program (TUPP) delegation: Alicja Bachulska, Viking Bohman, Francesca Ghiretti, Heather Hwalek, Leland Lazarus, Lauren Racusin, Friso Stevens, Joshua Stone, Brian Volsky, Theresa Winter, Adrienne Wu. Transatlantic attention to Taiwan has surged in recent years for several reasons. First, Russia’s illegal invasion of Ukraine in February 2022 has led to increased concern in the United States and Europe that Beijing’s growing military capabilities and declining confidence in its ability to achieve peaceful reunification will soon lead the People’s Republic of China (PRC) to attempt a takeover of Taiwan by force. The cost of such a war would carry a price tag of around $10 trillion, equal to about 10% of global GDP, according to Bloomberg Economics, far higher than the economic impact of the 2008 global financial crisis, the COVID-19 pandemic, and the war in Ukraine. The devastating impact of a Taiwan Strait conflict has provided a wake-up call for leaders in Europe who now echo the Biden administration’s warnings to PRC leader Xi Jinping to refrain from using violence to change the status quo in the Taiwan Strait. In addition, Taiwan is now a regular agenda item in the US-EU Consultations on the Indo-Pacific and the US-EU Dialogue on China. Second, intensifying US-China strategic competition has increasingly focused on technology with chips at the center. Taiwan produces more than 60% of the world’s semiconductors and more than 90% of the most advanced ones. A single company, Taiwan Semiconductor Manufacturing Corporation (TSMC), manufactures most of those chips. Recognition of Taiwan’s dominant role in the semiconductor supply chain has provided another reason to bolster deterrence. It has also sparked interest in “friendshoring” and “onshoring” semiconductor manufacturing. TSMC plans to start production at its first fab in Arizona in 2025 and will break ground on another in Dresden at the end of 2024 with an estimated completion date of 2027. Recognizing the rising geopolitical risks and their own strategic dependencies, the United States and the EU have made building resilient supply chains a priority, especially in semiconductors. In its 2021 Indo-Pacific Strategy, Brussels explicitly committed the EU to engaging with Taiwan in creating resilient supply chains. Third, rising concern in the United States and Europe about election interference and disinformation have sparked interest in learning from Taiwan’s experience in combatting such threats. In the run-up to the January 13, 2024, presidential and legislative elections, PRC attempts to interfere in Taiwan’s politics surged to unprecedented levels through economic coercion, direct political meddling, displays of military force, and manipulation of social media. As the United States and many European countries prepare for their own national elections this year, they are engaging with experts from Taiwan to better understand PRC tactics and the tools that Taiwan successfully employed to counter PRC interference. Fourth, the United States and Europe increasingly recognize that Taiwan’s vibrant and successful democracy is under threat from an authoritarian regime. Taiwan has received high marks for protecting political rights and holding free and fair elections. Taiwan’s democratic achievements are even more impressive when set against the backdrop of a deterioration in freedom worldwide. Like other industrialized democracies, Taiwan faces a multitude of challenges that are especially difficult to address in the face of PRC efforts that prevent Taiwan’s government and its people from interacting with the world. Taiwan’s exclusion from international organizations also hampers the world’s ability to develop effective solutions to myriad problems. The Taiwan-US Policy Program (TUPP) was launched in 2017 to encourage young professionals from the United States to include Taiwan in their research and help Taipei expand its global networks. In 2022, TUPP was expanded to include young professionals from Europe in support of GMF’s mission of promoting transatlantic cooperation. TUPP enables future leaders to acquire a deeper understanding of Taiwan and its relations with the United States through meetings with officials and experts in Washington, DC, followed by a visit to Taiwan to gain first-hand exposure to its politics, culture, and history. Experiencing Taiwan influences how these future leaders approach their work and their writing. It impacts their worldview by imbuing them with an appreciation for Taiwan’s history and commitment to the principles of democracy and human rights that undergird the existing international order. It also reinforces the importance of maintaining robust bilateral relations and strengthening international support for maintaining peace and stability in the Taiwan Strait. The 2024 TUPP cohort traveled to Taiwan in February for an intense week of meetings and activities. Each participant gained insights into Taiwan and its role in their respective fields. This year’s delegation comprised five Americans and five Europeans. Over time, TUPP seeks to create a body of global experts with firsthand knowledge of Taiwan who support sustaining and expanding its international ties. I am grateful to the Henry Luce Foundation, the Global Taiwan Institute, and the Taiwan Foundation for Democracy for their support of this goal. The contributions here, written by the entire 2024 TUPP delegation, underscore the importance of deeper study and understanding of Taiwan. I sincerely hope that they stimulate continued transatlantic and global interest in Taiwan and its future.
Topic:
Security, Foreign Policy, European Union, Geopolitics, and Trade
Political Geography:
China, Europe, Taiwan, Asia, Poland, Germany, Latin America, United States of America, and Indo-Pacific

58. Promoting E-Invoicing Interoperability in ASEAN: Overcoming Barriers to Trade Digitalisation

Author:
Mahirah Mahusin and Hilmy Prilliadi
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Electronic invoicing (e-invoicing) is a vital component of paperless trading, delivering substantial cost savings and efficiency gains for businesses. The ASEAN e-invoicing market has experienced notable growth, spurred by initiatives from tax authorities, public procurement agencies, and business digitalisation programmes. However, adoption across the region still faces significant challenges. To address these barriers, ASEAN has introduced initiatives to foster interoperability, develop common standards, and support regional integration. By prioritising standardisation, offering government support, and encouraging private sector adoption through financial incentives and capacity-building efforts, ASEAN can accelerate trade digitalisation and enhance economic integration across the region.
Topic:
Trade, ASEAN, Supply Chains, Digitalization, and Electronic Invoicing
Political Geography:
Asia

59. Securing Regional Solar Supply Chains: Determinants and Preparedness of the Northeastern Region of India and ASEAN

Author:
Prabir De, Komal Biswal, and Venkatachalam Anbumozhi
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Renewable energy contributes to the acceleration of the energy transition, supports global environmental mitigation, and helps meet sustainable development goals. Energy connectivity of India’s Northeastern Region (NER) with neighbouring countries particularly ASEAN assumes critical importance for accelerating economic integration. NER can play a three-dimensional role as power producer, exporter, and transit provider provided a quadrangular approach to build energy linkages and promote integration is consciously put in place. To understand whether the NER states are capable enough to take forward the solar supply chain development and bolster the ASEAN-India engagements in solar energy sector, this study has designed a state-level index of solar supply chain development by factoring in seven parameters, namely, (i) economic situations, (ii) environmental factors, (iii) spread of connectivity, (iv) financial enabling conditions, (v) mobility, (vi) human development, and (vi) social cohesion, which directly or indirectly influence the solar supply chain development in India. The results show that a clean and decent environment is must for development of solar supply chain. In addition, the study suggests that there is a need to improve the solar supply chain capability in the NER to enhance the economic growth. Leveraging policy support and reinvigorating existing institutions and creating new ones are imperatives for predicting the solar supply chain in the NER. This indexing may help track the trends, allowing for more informed decision-making in securing regional solar supply chain.
Topic:
Renewable Energy, ASEAN, Solar Power, Supply Chains, and Energy
Political Geography:
India and Asia

60. Urban Amenities and Trade Resilience During the Covid-19 Pandemic in Malaysia

Author:
Cassey Lee
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The main objective of this study is to empirically examine the role played by amenities in supporting growth and trade in Malaysia during the pandemic and post-pandemic recovery phases. The manufacturing sector has been an important factor in mitigating the negative impact of the pandemic. It has also been a positive driver of the country’s economic recovery. Transport, health and ICT-related amenities supported production, consumption, and trade activities during the pandemic and post-pandemic recovery periods.
Topic:
Trade, Cities, Resilience, COVID-19, and Amenities
Political Geography:
Malaysia, Asia, and Southeast Asia

61. Impacts of Trade Diversion from China in the United States Market on Wages in a Third Country: Evidence from Thailand

Author:
Kazunobu Hayakawa and Sasatra Sudsawasd
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Since the latter half of the 2010s, China’s exports to the United States (US) have gradually decreased due to the US-China trade war and other factors, such as lockdown measures in China to combat COVID-19. This decrease has resulted in increasing exports from third countries, including Thailand, to the US market by substituting China’s exports, i.e. trade diversion. Against this backdrop, this study empirically investigates how the changes in exports to the US driven by the change in China’s exports to the US affect wages in Thailand. Especially, we examine the heterogeneous effects according to workers’ characteristics. To this end, we conduct regression analyses using individual-level quarterly data from the first quarter of 2017 to the second quarter of 2023. Our main finding is that the wage gap between low- and middle-skilled workers decreased, whilst the gap between middle- and high-skilled workers increased. Namely, the increased exports to the US caused ‘wage polarisation’ in Thailand. We also find that the increase in exports to the US contributed to expanding the wage gap by age but narrowing it by gender.
Topic:
Markets, Trade Wars, Exports, and Wages
Political Geography:
China, Asia, Thailand, and United States of America

62. Does Economic Policy Uncertainty Impact Firm GVC Participation? Microdata Evidence from India

Author:
Ketan Reddy, Subash Sasidharan, and Shandre Mugan Thangavelu
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
In this study, we examine the implications of economic policy uncertainty on global value chain (GVC) participation and the integration of Indian manufacturing firms using firm-level data. Using panel data from 2004 to 2021, we find that economic policy uncertainty (EPU) impedes GVC participation and firm integration. Further, we find that the impact of EPU on GVC participation operates through the financial constraint channel with highly leveraged and low-liquidity firms. Using survival analysis, we also highlight that higher EPU results in higher exit from GVCs and reduces entry into GVCs.
Topic:
Economic Policy, Manufacturing, Global Value Chains, and Microdata
Political Geography:
South Asia, India, and Asia

63. Policy Recommendation to Achieve a Carbon-Neutral Economy: The Case of Corporate Governance and Carbon Performance in Malaysia’s Smart Cities

Author:
Siti Indati Mustapa, Noor Raida Abd Rahman, Amar Hisham Jaaffar, Nor Salwati Othman, and Syarifah Mardhiah Syed Salim
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study explores the role of corporate governance in carbon-intensive and non-carbon-intensive companies within Malaysian smart cities. The paper aims to understand the challenges and impacts of corporate governance on carbon and financial performance. In the first stage, carbon emissions data from 51 Bursa Malaysia-listed companies were analysed, revealing that corporate governance had no significant impact on carbon and financial performance. However, variations were noted in carbon-intensive industries. Liquidity emerged as a key factor positively affecting carbon performance, while firm size and market-to-book value were the main drivers of financial performance. In the second stage, a survey of 256 firms highlighted a high level of awareness regarding the significance of carbon reporting practices. Challenges included complexity regarding carbon reporting and knowledge limitations. The study advocates for the centralisation of carbon accounting standards, sharing best practices, and fostering of global collaboration to bolster effective climate action. These findings offer empirical evidence crucial for informing policymakers, companies, investors, and regulators alike. Future research could expand with larger samples, explore digital technology’s role in smart cities, and compare carbon reporting practices globally.
Topic:
Climate Change, Economy, Smart Cities, Carbon Emissions, Corporate Governance, and Energy
Political Geography:
Malaysia, Asia, and Southeast Asia

64. City Amenities and Internal Migration: Evidence from Chinese Cities

Author:
Karma Wangdi and Shandre Mugan Thangavelu
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper provides new empirical evidence of city amenities’ role in China’s internal migration using a unique city-level dataset. The results highlight the positive effects of city amenities such as education, public facilities, transportation, environment, and climate conditions in attracting migrant workers to cities. In our study, migrant workers are more likely to move to cities with better education, more public facilities, higher coverage of urban pensions, and a cooler climate with more precipitation. Moreover, they prefer to migrate and live in cities with larger service agglomeration and employment, higher average wages, more job opportunities, and lower house prices
Topic:
Development, Labor Issues, Cities, Internal Migration, and Amenities
Political Geography:
China and Asia

65. Urban Amenities and Regional Performance: Case Study of Indonesia

Author:
Titik Anas, Widdi Mugijayani, Estiana Cahyawati, and Muhammad Ridho
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The aim of this paper is to evaluate the importance of urban amenities to economic development using Indonesia as a case study. Indonesia has rich micro-level data on urban amenities, which we group in this paper into 12 categories, namely education, health, religious, and shopping facilities; accommodations; banks; historical sites; recreation sites; restaurants; public transportation stations; modern shopping facilities; and gas stations. Using panel data of 2007 and 2014, we test how urban amenities affect regional development, proxied by employment and population growth. We show that education and shopping facilities significantly affect the growth of employment and population. We also found that the effect of the availability of education facilities is stronger in the regions with industrial parks.
Topic:
Development, Globalization, Services, Productivity, and Amenities
Political Geography:
Indonesia, Asia, and Southeast Asia

66. Carbon Capture Storage and Utilisation (CCUS) Development in Thailand

Author:
Twarath Sutabutr
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Thailand is a developing country with a growing economy, which has led to increased energy consumption and carbon emissions. To tackle this issue, the Royal Thai Government has implemented several policies and initiatives to reduce the country’s carbon footprint and promote sustainable development. Carbon capture utilisation and storage (CCUS) has just become one of Thailand’s policies to help push a low-carbon agenda and to enable net-zero emissions in 2065. The Thailand National Committee on Climate Change Policy approved the establishment of the Greenhouse Gas Reduction Steering Committee, which initiated the technology applications for the country’s first CCUS. The committee’s mission is to accelerate the actions that can mitigate climate impacts by applying CCUS technology in the energy and industry sectors, leveraging the knowledge and experiences in the petroleum exploration and production industry. This first CCUS pilot project, originally initiated by a team in the PTT Group, is the Thailand CCUS HUB Project. This paper summarises the conceptual design and actions required to start implementing the project.
Topic:
Climate Change, Development, Carbon Emissions, and Carbon Capture
Political Geography:
Asia, Thailand, and Southeast Asia

67. Regional Amenities, Services Offshoring, and Skilled Employment in the Republic of Korea

Author:
Ju Hyun Pyun
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study empirically examines the effect of services offshoring and regional amenities on the composition of skilled employment for services firms. Analysing Korean firm-level data spanning from 2006 to 2019, we find that services offshoring, characterised by the import of services intermediate inputs, correlates with an increase in the proportion of skilled workers within firms. Additionally, the effects of this shift are nuanced based on different skill levels: services offshoring leads to an increase in the share of permanent headquarters workers to total workers. However, it does not affect the share of high-end skilled workers, such as headquarters’ share of management and research and development (R&D) workers. Moreover, regional amenities promote the positive effect of services offshoring on permanent headquarters workers’ shares. Lastly, the positive effect of offshoring on demand for high-end skilled workers in headquarters is significantly greater for firms with higher R&D intensity.
Topic:
Employment, Human Capital, Services, Skilled Labor, Research and Development, and Offshoring
Political Geography:
Asia and South Korea

68. Structural Transformation and Economic Resilience: The Case of Malaysia

Author:
Cassey Lee
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Exports have been a critical source for the resilience of the Malaysian economy during the COVID-19 pandemic and post-pandemic period. Long-term structural change in intersectoral production networks could have reduced this resilience. Stronger domestic intersectoral linkages and declining participation in backward global value chain participation are likely to reduce the impact of positive export shocks on the country’s economy. The services sector has become increasing important over time. Consumption in the services sector is clearly an important driver of growth. A positive export shock is enhanced by higher domestic intersectoral linkages in the services sector but not in manufacturing.
Topic:
Economy, Exports, Macroeconomics, Services, Resilience, and COVID-19
Political Geography:
Malaysia, Asia, and Southeast Asia

69. Have Dynamic Spillovers and the Connectedness of Trade Policy Uncertainty Changed During the COVID-19 Pandemic and Sino–US Trade Frictions?

Author:
Chien-Chiang Lee and Farzan Yahya
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
In this paper, we examine the spillover and connectedness between the trade policy uncertainty (TPU) of the United States (US), China, Japan, and the Republic of Korea (henceforth, Korea) under global geopolitical risk (GPR), infectious disease equity market volatility (EMVID), and GPR from North Korea (GPRNK) using a relatively novel time-varying parameter vector autoregression (TVP-VAR) approach. Additionally, method of moments quantile regression is utilised to estimate the asymmetric effect of GPR, GPRNK, and EMVID on TPU. Our findings suggest that there is a high total and directional spillover amongst underlying variables during Sino–US trade friction that further elevated during the coronavirus disease (COVID-19) pandemic period. The US is a net receiver of spillover from the TPU of all economies, while the Chinese TPU receives spillover from EMVID. The results further confirm that both the TPU of China (TPUCN) and the TPU of the US (TPUUS) are vulnerable to EMVID, but the effect is stronger for Chinese TPU in the higher quantiles. Although Japanese TPU is less vulnerable to GPR and EMVID, it is significantly exposed to GPRNK. Korean trade shows resiliency and immunity to pandemic-induced volatility and GPRNK.
Topic:
Trade Wars, Trade Policy, COVID-19, and Spillovers
Political Geography:
Japan, China, Asia, South Korea, and United States of America

70. The Effect of COVID-19 on Firms’ Behaviour: The Case of Japan

Author:
Yuting Chen and Bin Ni
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Since the onset of the coronavirus disease (COVID‐19) pandemic, social distancing practices and government‐mandated lockdowns have become the norm. These have cut off interaction amongst people, firms, and society, triggering an even larger decline in economic activity. In this study, we apply annual Japanese foreign affiliate data to quantify how COVID-19 has affected firms’ behaviour in various aspects. The estimation results show that both the revenue and purchasing behaviour of Japanese foreign affiliates were affected during COVID-19. This negative impact is mainly through the channel of stringent regulations imposed by host countries where affiliates are located. The general result we can derive from these findings is that COVID-19 negatively affects Japanese firms engaged in overseas activities. This leaves us with the question of when external shocks such as COVID-19 stand in the way of firms’ overseas activities, and what role the government should play to achieve a balance between safety and economic revival.
Topic:
Trade, COVID-19, Performance Evaluation, and Firms
Political Geography:
Japan and Asia

71. COVID-19 and Firm Response: Evidence from China

Author:
Dongmin Kong, Chen Liu, and Mengxu Xiong
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper explores the effects of the coronavirus disease (COVID-19) pandemic on firm response. Using a novel COVID-19 sentiment index, our estimation shows that the pandemic significantly reduced the overseas revenue and profits of firms listed on the Chinese A-share market. Moreover, we observe that an increase in loans, and a drop in debt financing cost and trade credit, were prominent during the pandemic. We contend that reduced cash flows, which damaged firm operations; government support, which provided more financing channels; and increased default risks, which placed barriers on trade credit, are the plausible mechanisms through which the COVID-19 pandemic affects firm performance. Profit contraction was more pronounced for firms with a lower ratio of domestic content in exports and state-owned enterprises, while external financing was easier for firms subject to stringent financial constraints despite their lowered trade credit.
Topic:
Trade, COVID-19, and Firms
Political Geography:
China and Asia

72. Quantitative Analysis of Optimal Investment Scale and Timing for Flood Control Measures by Multi-Regional Economic Growth Model: Case Studies in Viet Nam

Author:
Hiroaki Ishiwata, Masashi Sakamoto, Makoto Ikeda, and Venkatachalam Anbumozhi
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study aims to develop and utilise a multi-regional economic growth model that can take into account flood damage and investment in disaster risk reduction, and, through case studies in Viet Nam, quantitatively analyse the long-term effects of investment in disaster risk reduction on the national and local economy, as well as the optimal scale and timing of investments in flood protection, to gain a better overview of these factors. The results indicate that additional investment in disaster risk reduction could stimulate economic growth, and that the optimal range of the disaster risk reduction budget rate was around 0.3% to 0.5% of GDP, assuming a constant budget rate throughout the total 25-year calculation period. In the case of a variable disaster risk reduction budget rate, we observed that a variable budget rate that gradually reduces the disaster risk reduction budget rate from a higher level than the current rate could further promote economic growth than if the budget rate were fixed. In both cases, we verified that with excessive investment in disaster risk reduction, the high tax burden had the risk of reducing investment in production capital and lead to stagnating economic growth. By region, the long-term effects of investment in disaster risk reduction were most seen in the Central region, where the rate of flood damage is the highest.
Topic:
Economic Growth, Investment, Flood, and De-Risking
Political Geography:
Asia, Vietnam, and Southeast Asia

73. Agricultural Production as a Coping Strategy during the Covid-19 Pandemic? Evidence from Rural Viet Nam

Author:
Hai-Anh Dang and Cuong Viet Nguyen
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
We examine the Covid-19 pandemic-induced negative effects on household welfare in rural Viet Nam. Analysing recent Viet Nam Household Living Standard Surveys spanning 2016–2021, we find robust evidence that lockdown measures resulted in a 3.9% reduction in per capita income and a 2.6 percentage-point increase in the headcount poverty rate of rural households. It also had severe effects on rural households’ wages and self-employed non-farm income, but rural households appeared to have relied on farm income to cope with the lockdowns. Each additional month under lockdown reduced wage income and non-farm income by 2.8% and 6.3% respectively but increased crop income by 9.5%, livestock income by 7.1%, and other farm income by 12.2%.
Topic:
Agriculture, Rural, COVID-19, and Production
Political Geography:
Asia, Vietnam, and Southeast Asia

74. Local Social Governance in China: Spatial politics and social welfare

Author:
David S. G. Goodman
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
China Studies Centre, The University of Sydney
Abstract:
The policy goal of establishing local social governance in the People’s Republic of China since 2021 highlights two somewhat contradictory tendencies in its spatial politics. One is increased social welfare provision through economic, social and governmental institutions cooperating to create self-sustaining communities. The other is greater city-district and county level local control by the Communist Party of China. Local social governance remains in its infancy with limited policy implementation. The evidence to date though from an examination of the settings for local social governance, its causes, and preliminary implementation does not suggest major changes in the longer-term balance between the Party-state’s undoubted centralist and decentralist tendencies. Moreover, while there may be the desire both to improve social welfare provision, and to extend the reach of the state and the Party, the proposed programme of change faces immense and probably intractable challenges.
Topic:
Governance, Public Policy, and Social Welfare
Political Geography:
China and Asia

75. Understanding Elite Politics Through Relentless Research: Warren Sun’s Hua Guofeng Nianpu, Chronology of Hua Guofeng (1971–1981)

Author:
Frederick C. Teiwes
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
China Studies Centre, The University of Sydney
Abstract:
This Working Paper is a pre-publication review of an immense documentary collection prepared over the past 25 years by Warren Sun, Adjunct Associate Professor at Monash University and Affiliate Member of the Sydney CSC. It is based on the intellectual premise that elite politics in the CCP cannot be understood without deep penetration into the details of political decision-making and conflict. In its absence, simplistic narratives emerge and become widely accepted, especially when the Party itself is creating the basis for the narrative. This is most prevalent for the immediate post-Mao period as a Hua Guofeng-Deng Xiaoping struggle between different ideological lines and in the profound misunderstanding of Hua as a limited, merely transitional political leader. Hua nianpu uses a wide range of sources to uncover details that contest such views. These include: the contemporary PRC public record; official documentary collections; internal Party documents including unpublished speeches and compendia of circulars at major Party meetings; memoirs, oral accounts, and recollections published in the PRC by or about leaders; studies by Party history scholars in PRC journals; more-adventurous books published in Hong Kong by Party historians and former officials; interviews with scholars and retired officials; and unique interviews with officials who worked as secretaries or as aides to very senior figures and their family members, especially members of Hua’s family. However, these sources have limitations that must be considered critically and discussed in terms of what they can and cannot provide. Taken together the detailed information compiled in Hua nianpu undermines central features of the accepted narrative, most notably by showing that the 1978 work conference and the subsequent Third Plenum were joint Hua-Deng ventures to advance modernization, and when unanticipated developments weakened Hua, Deng did not act against him. Instead, he worked to lower tensions and to return the focus to their original joint plan. Hua nianpu is a major basis for our joint book project, Hua Guofeng, Deng Xiaoping, and the Dismantling of Maoism. But this nianpu is entirely Professor Sun’s creation and exacting work. The target for submission of both these projects to their respective publishers is early 2025.
Topic:
Politics, History, Elites, Chinese Communist Party (CCP), and Hua Guofeng
Political Geography:
China and Asia

76. Supply Chain Risks in EU-South Korea Relations: Semiconductor Industries

Author:
Sunkung Choi
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Recent geopolitical crises and the Covid-19 pandemic have exposed weaknesses in global supply chains, leading to disruptions in the flow of goods and creating shortages. The semiconductor shortage crisis between 2020-2021 exacerbated these issues, particularly affecting industries reliant on chips. This crisis prompted governments and industries to prioritise resilience and independence in supply chains. This paper examines the causes, effects and implications of the supply chain crisis, focusing on the economic relations between the EU and South Korea. Both parties recognise the importance of addressing supply chain vulnerabilities and have initiated collaborative efforts to strengthen critical industries like batteries and semiconductors. Moving forward, strategic collaboration between the EU and South Korea will be crucial for effectively addressing the supply chain crisis. Measures such as enhancing supply chain resilience, investing in research and development and fostering technological cooperation are essential for ensuring economic stability and navigating future challenges.
Topic:
European Union, Trade, COVID-19, Supply Chains, and Semiconductors
Political Geography:
Europe, Asia, South Korea, and Germany

77. Engaging WPS in Climate Security – ASEAN Perspectives

Author:
Tamara Nair
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
Climate change processes are acknowledged as critical components of regional and international security, and there is scope for the Association of Southeast Asian Nations (henceforth, ASEAN) to mobilise all segments of its population and existing plans of action addressing climate change to confront this challenge. The role of women in ASEAN’s peace and security and their role climate change mitigation can and should be acknowledged and strengthened systematically. The ASEAN Women, Peace and Security Regional Plan of Action (WPS RPA) offers such an opportunity for increased regional cooperation to build resilience and enhance resourcefulness of women’s formal, but in particular, informal networks. Although climate change does feature in the RPA, it is not within the specific focus of how the WPS framework might work in addressing the need for gender sensitive responses to the effect of climate change. This Insight discusses possible advantages of using the RPA in this manner.
Topic:
Security, Climate Change, Resilience, ASEAN, Women, Peace, and and Security (WPS)
Political Geography:
Asia and Southeast Asia

78. Digital legislation: convergence or divergence of models? A comparative look at the European Union, China and the United States

Author:
Aifang Ma
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
Robert Schuman Foundation (RSF)
Abstract:
In 1964, when the Canadian pioneer of media studies, Marshall McLuhan, argued that media is an extension of man, he did not foresee that future media, at the beginning of the 21st century, would produce increasingly pernicious effects[1]. While media have indeed extended human capacities, they have also shown to be generators of complicated social and ethical problems. In the same year philosopher, Herbert Marcuse, who analysed relations between Man and Machine from a deeply pessimistic viewpoint. His predictions seem to be corroborated by what we are now experiencing: the easy life made possible by technological progress has progressively gnawed into the individual critical reasoning. Instead of imposing their control over technologies, human beings are increasingly at their mercy. The domination of technology over individuals is all the stronger, since it seems harmless and is pleasant to use. In this context, the regulation of digital technologies[2] is flourishing in autocracies and democracies alike. Its importance goes far beyond the need of authoritarian regimes to cut off the transmission of destabilising content. It is universal since digital technologies set common challenges to national governments: illegal collection of users’ personal data, precarious working conditions for gig workers, monopolistic practices of large platforms, threats to human dignity and domestic security. These problems are causing trouble to all governments around the world. This article aims to be pragmatic. Beyond differences in political regime, it studies the regulatory approaches of the three largest digital economies in the world: China, the United States, and the European Union. The three models can potentially hinder or stimulate the development of digital technologies without necessarily opposing each other.
Topic:
European Union, Media, Legislation, and Digital Policy
Political Geography:
China, Europe, Asia, North America, and United States of America

79. The European Union between the United States and China: should we choose between equidistance and following?

Author:
Philippe Etienne
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Robert Schuman Foundation (RSF)
Abstract:
The competition between the world's two major powers structures all international relations and influences the choices made by all other countries. The latter fear the consequences of tensions between the two giants and, in the main, want to avoid having to choose. But the problem is not the same everywhere. To put it simply, China benefits in the "global South" from a certain hostility towards the West, while the United States can play on the fear aroused by the emergence of Chinese power, which no longer hesitates to resort to power relations, especially in Eastern Asia[1]. Against this backdrop, Europe is in a delicate situation. It must contend with its assimilation to the United States as being part of the “West” which is increasingly rejected. Although it shares much with its American ally, particularly the values of democracy and security arrangements, it does not always have the same interests as the United States and must preserve its room for manoeuvre if it is not to be dragged into decisions in which it has no part. Before examining how the European Union is facing up to this challenge, and how it should behave in the future, the driving forces and prospects of the Sino-American rivalry require exploration.
Topic:
International Relations, Globalization, European Union, Global South, and Rivalry
Political Geography:
China, Europe, Asia, North America, and United States of America

80. The Future of K-Power: What South Korea Must Do After Peaking

Author:
Chung Min Lee
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
South Korea’s economic growth will almost certainly slow over the coming decades—but writing off the country’s potential would be a mistake.
Topic:
Development, Economic Growth, Domestic Politics, and Soft Power
Political Geography:
Asia and South Korea

81. Transatlantic Policies on China: Is There a Role for Türkiye?

Author:
Sinan Ülgen and Temur Umarov
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Türkiye is an important transatlantic actor in Sino-Western competition. It can add value to Western efforts aimed at synchronizing policies toward a rising China. And yet, at present, Ankara’s policies on China are not harmonized with those of its partners in the West.
Topic:
Foreign Policy, Transatlantic Relations, Strategic Competition, and Regional Power
Political Geography:
China, Turkey, Middle East, and Asia

82. Japan’s Aging Society as a Technological Opportunity

Author:
Ken Kushida
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Japan’s extreme demographic aging and shrinking is an economic and societal challenge, but also a technological opportunity for global leadership. Technological trajectories of worker automation and worker skill augmentation within Japan are already being shaped by the country’s demographics. Software, robotics, and other technology deployments are transforming the nature of work in a wide range of sectors in Japan’s economy, and across types of work such as blue-collar, white-collar, agriculture, manufacturing, and services. Specific ways in which Japan’s demographics shape technological trajectories include market opportunities, acute labor shortages, and favorable political and regulatory dynamics. The private sector is driving technology deployments in industrial sectors hit hard by Japan’s aging population, ranging from construction and transportation to medical care and finance, with strong government support in each of the domains. Demographically driven technological trajectories play to Japan’s strengths in implementing, deploying, and improving technologies rather than generating breakthrough innovations. Japan’s demographically driven technological trajectory can be an important platform for international technology cooperation, fitting with the top U.S.-Japanese political leadership agreements on fostering strong innovation and technology collaboration ties. Japan’s start-up ecosystem, often in partnership with large incumbent firms, will be critical in deploying new technologies by defining new markets and providing new offerings. An effective analysis goes beyond broad demographic numbers to delve into specific pain points of particular segments of society to better capture their situations and roles in shaping market opportunities that drive technological adoption. This introductory paper: (1) defines key analytical concepts; (2) surveys some of Japan’s key demographic shifts; and (3) highlights cases from agriculture, construction, transportation, healthcare, eldercare, land, and housing ownership.
Topic:
Demographics, Science and Technology, Innovation, and Aging
Political Geography:
Japan and Asia

83. Negotiating the India-China Standoff: 2020–2024

Author:
Saheb Singh Chadha
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
India and China have been engaged in a standoff at their border in eastern Ladakh since April–May 2020. Over 100,000 troops remain deployed on both sides, and rebuilding political trust will take time.
Topic:
Security, Bilateral Relations, Territorial Disputes, and Borders
Political Geography:
China, South Asia, India, and Asia

84. Non-meritocrats or choice-reluctant meritocrats? A redistribution experiment in China and France

Author:
Margot Belguise, Yuchen Huang, and Zhexun Mo
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:
Recent experimental evidence contends that meritocratic ideals are mainly a Western phenomenon. Intriguingly, the Chinese public does not appear to differentiate between merit- and luck-based inequalities, despite China’s historical emphasis on meritocratic institutions. We propose that this phenomenon could be due to the Chinese public’s greater reluctance to make an active choice in realstake redistribution decisions. We run an incentivized redistribution experiment with elite university students in China and France, by varying the initial split of payoffs between two real-life workers to redistribute from. We show that, compared to French respondents, Chinese respondents consistently and significantly choose more non-redistribution across both highly unequal and relatively equal status quo scenarios. Additionally, we also find that Chinese respondents do differentiate between merit- and luck-based inequalities, and do not redistribute less than the French, excluding the individuals who engage in non-redistribution choices. Chinese respondents are also as reactive as the French towards scenarios with noisy signals of merit, such as inequalities of opportunities. Ultimately, we contend that the reluctance to make an active choice is indicative of diminished political agency to act upon redistribution decisions with real-life stakes, rather than apathy, inattention, having benefited from the status quo in Chinese society or libertarian preferences among the Chinese. Notably, our findings show that Chinese individuals’ reluctance to make a choice is particularly pronounced among those from families of working-class and farming backgrounds, while it is absent among individuals whose families have closer ties to the private sector.
Topic:
Labor Issues, Class, Institutions, Redistribution, and Meritocracy
Political Geography:
China, Europe, Asia, and France

85. Bureaucrats and the Korean export miracle

Author:
Philipp Barteska and Jay Euijung Lee
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:
Does bureaucratic capacity matter for growth miracles? This paper investigates how much the effect of an industrial policy during South Korea’s growth miracle depends on bureaucratic capacity. We find that the bureaucrats implementing the policy greatly change its effect on exports – the variable targeted by the policy and key to South Korea’s economic success. These bureaucrats manage offices that promote exports on appointments to 87 countries between 1965, when South Korea was one of the world’s poorest countries, and 2000. We exploit the three-yearly rotation of managers between countries to show that increasing bureaucrat ability by one standard deviation causes a 37% increase in exports. This effect is comparable to the policy’s average effect – estimated from office openings. Hence, this industrial policy entirely depends on bureaucratic capacity: It has no effect when implemented by a bureaucrat one standard deviation below average. We find evidence for a key mechanism via which better bureaucrats increase exports: transmitting information about market conditions. Under better bureaucrats South Korean exports increase more strongly with a country’s import demand – taking advantage of this demand. Finally, we investigate whether bureaucrat experience increases South Korean exports. We isolate quasi-random variation in experience: a product’s import demand growth during the bureaucrat’s first appointment. Such experience increases exports in subsequent appointments of this bureaucrat. This highlights that organizational capacity grows endogenously, implying a novel channel for path dependence in organizational capacity.
Topic:
Exports, Economic Development, and Bureaucracy
Political Geography:
Asia and South Korea

86. Migration or stagnation: Aging and economic growth in Korea today, the world tomorrow

Author:
Michael A. Clemens
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
South Korea faces an unprecedented economic crisis driven by rapid population aging, as it approaches a future of negative economic growth. This paper examines the full range of possible policy responses with the potential to restore dynamism to the Korean economy. Contrary to many prior analyses, I find that enhanced labor migration to Korea is necessary, sufficient, and feasible. Migration is necessary because in the best forecasts we have, no other class of policy has the quantitative potential to meaningfully offset aging. Migration is sufficient because enhanced temporary labor migration by itself would offset most of Korea’s demographic drag on growth over the next 50 years. And migration is feasible because the levels of migration and timescale of the transition would resemble that already carried out by Malaysia and Australia. Many advanced economies will follow in Korea’s demographic footsteps in decades to come, and have much to learn from the decisions that the Korean government makes now.
Topic:
Demographics, Migration, Labor Issues, Economic Growth, and Aging
Political Geography:
Asia and South Korea

87. Korea’s Trade Policy Agenda in an Uncertain US Trade Environment

Author:
Alan Wm. Wolff and Han-Koo Yeo
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
This paper addresses how South Korea, a mid-sized ally of the United States, can best navigate clearly identifiable risks, crafting a positive and pragmatic international trade policy. Korea is heavily dependent on the United States for its defense. It is clear that US trade policy has recently shifted toward being more self-centered, a policy unlikely to be reversed any time soon. The United States is on the threshold of a presidential election that makes it unpredictable in its trade policy, which may become directly harmful to Korean economic prospects if there is a change in leadership. US trade policies under President Joseph Biden have been primarily aimed at onshoring rather than friendshoring, but they have not been actively hostile or threatening. If there is a second Donald Trump term, Korea might not be excluded from substantially increased tariffs—whether for protection, revenue, or leverage—despite the Korea-United States Free Trade Agreement (KORUS FTA). At the same time that Korea is watchful of developments in the United States, it needs to pay attention to its neighbor, China, the world’s largest trading economy, a country that has practiced trade coercion against it. South Korea is the world’s 13th-largest economy. It is a strong proponent and practitioner of free trade. It is one of a group of midsize free market democracies aligned with the United States that, ranked by GDP, includes Japan, Germany, and France (and therefore with others, the European Union), the United Kingdom, Canada, Italy, and Australia. The future of the global trading system that the market-oriented countries wish to enjoy is increasingly dependent on this group of midsize economies and the European Union. Korea has thrived in large part through its open trade policy that has made it the country with the world’s greatest number of free trade agreements (including with both the United States and China, as well as with the European Union). It shares strong economic security interests with the United States: It has its own K-CHIPS Act, which provides substantial subsidies to its semiconductor industry. It invests very substantially in critical minerals and batteries, as does the United States. Korea also collaborates with the United States in the production of vaccines to meet future pandemics.
Topic:
Climate Change, Bilateral Relations, Geopolitics, Investment, Trade, Economic Security, Semiconductors, Steel, and Critical Minerals
Political Geography:
Asia and South Korea

88. The International Economic Implications of a Second Trump Presidency

Author:
Warwick McKibbin, Megan Hogan, and Marcus Noland
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
The paper explores policies promoted by former president and now candidate Donald Trump that would potentially affect the global economy. We focus on immigration policy, trade, and erosion of the Federal Reserve Board’s political independence. Each policy has differing macroeconomic and sectoral impacts on the United States and other countries. We find, however, that all the policies examined cause a decline in US production and employment, especially in trade-exposed sectors such as manufacturing and agriculture, as well as higher US inflation. The trade policies do little to improve the US trade balance; however, the erosion of Fed independence does so by causing capital outflows, a significant depreciation of the dollar, and higher unemployment toward the end of 2028, which worsen American living standards. Scenarios combining individual policies show that the changes cause a large inflationary impulse and a significant loss of employment (particularly in manufacturing and agriculture) in the US economy. The negative impact of a contraction in global trade is significant for countries that trade with the United States the most. The adverse effect is offset for some economies by the positive effects of an inflow of foreign capital that would otherwise have gone into the US economy. An online dashboard contains a full set of macroeconomic and sectoral results for all countries.
Topic:
Migration, Central Bank, Trade Policy, Donald Trump, and Deportation
Political Geography:
China and Asia

89. China’s influence at the United Nations: words and deeds

Author:
Alicia Garcia-Herrero, Théo Storella, and Pauline Weil
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
We investigate China’s influence at the United Nations by focusing on the promotion of its narratives (words) and its voting behaviour (deeds). For the former, we assess the extent to which China’s global initiatives have become embedded in UN discourse compared to Western initiatives. For the latter, we assess the degree to which countries, regions and voting coalitions align their UN General Assembly votes with China compared to the US. When it comes to words, China’s global initiatives are sometimes louder than the West’s. More specifically, the Belt and Road Initiative has had a much greater impact on UN discourse than any Western initiative. Other Chinese global initiatives do not clearly stand out from those of the West, with the Global Compact for Migration mentioned more frequently at the UN than any Chinese initiative other than the BRI. We also find that Chinese initiatives are more self-referential. Thematically, both Chinese and Western initiatives are very focused on security as well as aid and human rights. Moving to voting patterns, countries’ income levels are a key determinant of alignment in voting. Poorer countries are much more aligned with China than with the US. North America and the European Union, in that order, are generally more aligned with the US than with China and these trends are much more stable than one could expect given China’s growing economic influence.
Topic:
United Nations, Bilateral Relations, Governance, European Union, Economy, and Trade
Political Geography:
China, Europe, and Asia

90. Xi Transforms the Party: Senior Cadre Selection in a New Era

Author:
Mark Stokes, Eric Lee, Cathy Fang, and Marek Haar
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
Project 2049 Institute
Abstract:
Due to the challenges associated with the People’s Republic of China’s (PRC) rise, anticipating who will lead the Chinese Communist Party (CCP) is a major concern. General Secretary Xi Jinping has reshuffled the deck around norms for succession. With old patterns woven out of the CCP’s banner, studying the new framework for promoting new senior leaders and the sub-factional politics lying underneath will aid in identifying who will lead the CCP and govern the PRC in the future. To that end, this report offers a summary of the leader promotion process within the CCP, a guide to identifying rising CCP leadership in the future, and a map of the current six sub-factions competing for Xi’s favor.
Topic:
Domestic Politics, Xi Jinping, and Chinese Communist Party (CCP)
Political Geography:
China and Asia

91. The East China Sea Dispute: China’s and Japan’s Assertiveness from Mao to Xi

Author:
Andrew Chubb
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
Xi Jinping came to power in 2012 amid a serious foreign policy crisis following the Japanese government’s nationalization of three of the disputed Diaoyu/Senkaku Islands. The move was aimed at blocking Shintaro Ishihara’s Tokyo municipal government from purchasing the uninhabited islands from their private owner and constructing a harbor and other infrastructure that would further inflame tensions. Although Beijing understood Prime Minister Yoshihiko Noda’s goal was to prevent an even worse crisis, it nonetheless responded by sending maritime law enforcement ships into the Japanese-controlled territorial seas around the islands, backed by a furious propaganda wave that unleashed violent anti-Japanese protests in dozens of cities across China. The result was a fundamental change in the sovereign territorial seas around the islands from Japanese control to overlapping control — a situation that continues to bring ships and aircraft from both sides into close contact on the water, increasing the risk of an accident that could bring about armed conflict. How much of China’s behavior in the East China Sea is attributable to Xi Jinping? To what extent have Sino-Japanese action-reaction dynamics been at play versus longer-term processes of the shifting distribution of power in the region or changes in domestic politics? How important have the hydrocarbon deposits that originally touched off the dispute been, and to what extent have the area’s fisheries — or fisherfolk — been protagonists? This paper assesses these questions using a systematic time-series dataset of both sides’ patterns of behavior over the long term, from its origins in the early 1970s to the Xi era. It visualizes the historical trajectory of the Sino-Japanese disputes in the East China Sea, charting each side’s key moves across domestic, diplomatic, and physical domains and the balance between military, administrative, political, and resource motivations behind them. Quantifying the changes in China’s and Japan’s behaviors in the disputed area from 1970 to 2015 reveals six key dynamics: The East China Sea dispute began over oil and gas resources but switched toward a contest for military and administrative control as China rapidly expanded its naval and coast guard presence in the mid-2000s. China’s policy was already trending in an increasingly assertive direction well before Xi took power. China’s gray-zone assertiveness dates back to the mid-1990s, while coercive methods started in the mid-2000s. The key change Xi has overseen is China’s increasingly militarized — but also regularized — presence in the disputed area. Japanese actors have triggered several acute periods of tension with provocative moves, but China has driven the long-term arc, with its shifts from “shelving” the dispute in the 1970s to greater assertiveness from the mid-1990s to regular coercion from the mid-2000s. The two significant periods of non–Liberal Democratic Party rule in Japan have both preceded surges of Chinese assertiveness followed by Japanese pushback, raising questions about China’s calculations regarding domestic politics in Japan. Despite several high-profile propaganda campaigns and diplomatic blitzes, most of China’s moves have been in the physical domain on the water, while Japan has focused on diplomacy and domestic administrative moves. Xi’s precise role in the escalation around the disputed islands in September 2012 remains unclear, but his centralization of power since the 18th Party Congress has coincided with a regularization of China’s assertive behaviors. A less powerful leader might, like Xi’s predecessors, find it more difficult to prevent substate actors from taking destabilizing actions in the area, as occurred several times in the 2000s.
Topic:
Foreign Policy, Territorial Disputes, History, Maritime, and Xi Jinping
Political Geography:
Japan, China, Asia, and East China

92. Who Briefs Xi Jinping? How Politburo Study Sessions Help to Decode Chinese Politics

Author:
Neil Thomas and Feifei Hung
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
China’s politicians are lifelong learners. The Chinese Communist Party (CCP) calls itself a “learning party” (xuexi dang) because its members participate in regular study sessions. These are designed to enhance organizational discipline and to instill practical knowledge. Even the Party’s top leaders, the 24 members of the Politburo, dedicate a half-day almost every month to the “collective study” (jiti xuexi) of a topic chosen by General Secretary Xi Jinping. This practice is unusual compared to most Western governments. It is rare that a U.S. president would convene their cabinet for lectures on employment policy, political theory, or World Trade Organization reform — all recent topics of Politburo study sessions. So why do Party leaders spend so much of their limited time doing collective study? What do they study? Who briefs from? How can we use this information to better understand Beijing? This paper first explains the nature and importance of Politburo study sessions. It then uses a unique dataset to analyze changes in topics and briefers over time before presenting case studies of how sessions focused on technology and foreign affairs relate to policymaking. The conclusion summarizes our findings about the value and limits of using these sessions to decode Chinese politics.
Topic:
Domestic Politics, Xi Jinping, and Chinese Communist Party (CCP)
Political Geography:
China and Asia

93. The United Front, Comprehensive Integration, and China’s Nonmilitary Strategy Toward Taiwan

Author:
Guoguang Wu
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
Global opinions have increasingly considered the potential danger of war in the Taiwan Strait should China take military action to invade the island in pursuit of its plan for “full unification of the motherland.” These are legitimate concerns, as such danger increases with the growth of both China’s national power and Chinese leader Xi Jinping’s global ambitions. Military action should not, however, devalue Beijing’s military-backed, nonmilitary strategy to reclaim Taiwan. What, in practice, is the specific purpose of Beijing’s nonmilitary strategy? How do nonmilitary and military means mutually support each other in China’s overall reunification strategy? As the Taiwan populace seemingly drifts further away in terms of a shared Chinese identity and rejects future unification, why does China still deem nonmilitary means optimal for dealing with Taiwan? This paper addresses these questions by first discussing how China’s Taiwan strategy consists of both military and nonmilitary elements, highlighting how Xi has upgraded the latter by “putting the people at the center” of “peaceful reunification” while simultaneously preparing military action and how the nonmilitary strategy follows the spirit of the united front political strategy of the Chinese Communist Party (CCP). It then investigates one of China’s latest nonmilitary initiatives to deal with Taiwan, namely, the “cross-strait integrated development demonstration zone” in Fujian, and analyzes the strategic implications of those various measures for promoting “comprehensive integration.”1 The third section explores how the CCP defines the situation in the Taiwan Strait as a continuation of civil war and, accordingly, employs both military and nonmilitary strategies for winning said war. By considering how the two strategies complement one another, it also explains why CCP leadership has strengthened nonmilitary means, such as integration, despite prior ineffectiveness. The paper concludes that nonmilitary measures will not ultimately lead to “peaceful reunification” but are instead intended to mask Beijing’s overall capabilities to deal with Taiwan.
Topic:
Military Strategy, Territorial Disputes, Regional Integration, Economic Development, and Identity
Political Geography:
China, Taiwan, and Asia

94. Ishiba Takes the Helm: A New Kind of Leader for Japan

Author:
Asia Sociey
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
Japan’s ruling Liberal Democratic Party’s (LDP’s) leadership elections are normally staid and predictable affairs. But scandals in the LDP and former Prime Minister Fumio Kishida’s radical decision to dissolve powerful party factions disrupted business as usual. In an unusually dramatic election on September 27, Shigeru Ishiba emerged as the new party president — and automatically became prime minister of Japan. Ishiba, a long-standing fixture in the ruling LDP who had run for the position four times before, surprised many observers by defeating eight other contenders including powerful party veterans, popular “young Turks,” and a prominent female lawmaker. He immediately called for a general election on October 27 as an opportunity to secure a mandate for his policies during the often short-lived “honeymoon” for a new prime minister. For the United States, Ishiba brings a strong commitment to the security relationship, albeit from an approach and perspective that have the potential to disrupt the current progress in modernizing the alliance. He has advocated for a more equal partnership and for revisiting the foundational documents that govern the status of the U.S. troops stationed throughout the archipelago. It is an open question whether that element of his campaign rhetoric will translate into governing policies; indeed, he has already appeared to walk back some of his positions, including calling for an “Asian NATO” ahead of the general election. With the U.S.-Japan alliance at the center of many regional security arrangements, any significant change to the bilateral relationship could alter the stability and order of the broader Indo-Pacific.
Topic:
Elections, Leadership, Domestic Politics, Prime Minister, and Fumio Kishida
Political Geography:
Japan and Asia

95. On U.S.-China Relations & Climate

Author:
Kate Logan and Li Shuo
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
Climate change, and how to confront it, is one of the most politicized issues in the American political system. Regardless of how U.S. politicians talk about climate change, its effects are increasingly dire for Americans and the entire world — including many vulnerable populations in Asia. With the United States and China accounting for around 40% of annual greenhouse gas emissions globally, the speed and scale of their collective emissions reductions will largely determine the future magnitude of economic and human damages. Moreover, how the United States and China implement climate policy and interact will also shape geopolitics, especially for Asian economies that depend on fossil fuels or those rich in minerals and technologies needed for clean energy. The nature of climate change as a common global challenge previously enabled the United States and China to forge a uniquely cooperative relationship on the issue. U.S.-China joint action famously laid the groundwork for the landmark Paris Agreement in 2015, while tempering bilateral tensions. Former President Donald Trump’s subsequent withdrawal from the Paris Agreement, however, irrevocably damaged this cooperation, along with global trust in the United States as a climate leader. And the recent emergence of U.S. economic competitiveness with China as a rare area of bipartisan consensus has further complicated the issue, as U.S. policy responses aiming to limit China’s global dominance in essential clean technologies including solar panels and electric vehicles are seen as counterproductive to the global clean energy transition. Despite this, President Joe Biden and his vice president, Kamala Harris — now the Democratic presidential nominee — have supported climate cooperation as a critical area of U.S.-China convergence. This is the backdrop against which this year’s U.S. election is playing out: two parties that largely align in their view of China as the top U.S. competitor, but who hold starkly polarized views toward climate policy as an economic enabler, in Harris’s and the Democrats’ case, or as a barrier to growth that must be dismantled, as Trump and his supporters contend. The stakes are high — for U.S.-China relations, as well as for the health and safety of our planet.
Topic:
Climate Change, Politics, Bilateral Relations, Carbon Emissions, and Vulnerability
Political Geography:
China, Asia, North America, and United States of America

96. On Science & Tech Diplomacy

Author:
Akshay Mathur and Helen Zhang
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
A new era of intergovernmental science and technology cooperation has emerged, driven by the United States and its Asian partners in the Indo-Pacific such as Japan, South Korea, Taiwan, Australia, Singapore, and India. As science and technology take primacy in the modern economy, countries are introducing laws and policies to build new sovereign capabilities, protect sensitive innovations and industries, and govern cross-border cooperation. This essay examines the key trends we have observed in the United States and select Asian countries in the Indo-Pacific, the nature of agreements being inked, and the likely direction of cooperation under the next U.S. administration.
Topic:
Diplomacy, Economics, Science and Technology, and Trade
Political Geography:
Japan, India, Taiwan, Asia, South Korea, Australia, Singapore, United States of America, and Indo-Pacific

97. On U.S.-China Relations & Political Economy

Author:
Lizzi C. Lee and Neil Thomas
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
Communist leaders may not like electoral democracy but there are few events they will pay more attention to this year than the U.S. presidential election on November 5. General Secretary Xi Jinping says U.S.-China ties are “the most important bilateral relationship in the world,” and Chinese officials, scholars, and netizens are anxious to glean insights about Republican Party candidate and former President Donald Trump and Democratic Party candidate and current Vice President Kamala Harris. For Beijing, the stakes are high. The presidencies of first Trump and now Joe Biden saw the United States adopt a posture of “strategic competition” toward China that has significantly impacted the ruling Chinese Communist Party’s external environment and domestic priorities. Trump imposed tariffs on most Chinese imports to the United States, which Biden ramped up in key industries including electric vehicles. Biden introduced extensive export controls aimed at curbing China’s chip industry, which could be expanded to other sectors. Trump and Biden have both elevated U.S. support for Taiwan; strengthened restrictions on inbound and outbound investment with China; and sanctioned hundreds of Chinese government agencies, state-owned enterprises, private firms, and individuals. Biden has further prioritized working with U.S. allies and partners on economic, political, and security policies to blunt China’s influence. Both countries seek “guardrails” against crisis and conflict, but bilateral diplomacy is increasingly fraught and multilateral cooperation on global challenges is increasingly difficult. This essay analyzes the China policies of both candidates, focusing on the diplomatic and economic dimensions of U.S.-China relations, highlighting how a second Trump administration could deliver acute shocks but potential openings while Harris would likely bring continuity with Biden’s approach. It argues that Beijing has no clear preference between the two candidates. Therefore, neither election outcome would fundamentally change China’s international strategy, although the result would produce different tactical responses. It concludes with recommendations for how both Washington and Beijing can safeguard global stability while preserving national sovereignty regardless of who succeeds Biden.
Topic:
Foreign Policy, Political Economy, Sovereignty, Bilateral Relations, Elections, and Donald Trump
Political Geography:
China, Asia, North America, and United States of America

98. On Alliances in Northeast Asia

Author:
Emma Chanlett-Avery, Duyeon Kim, and Yuka Koshino
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
Over the past two years, delegations to Washington from Japan and South Korea have one predominant question for their interlocutors: What would a Trump 2.0 administration mean for their countries and for U.S. global leadership more broadly? Both Asian capitals appreciate the upgrades to their bilateral pacts with the United States under the Biden administration’s alliance-centric foreign policy, and express anxiety about the possible return of Trump as commander-in-chief. Even before his election in 2016, Trump had expressed open disdain for U.S. alliances and that skepticism could be amplified in a second term by his “America First” approach. With Kamala Harris now at the top of the Democratic ticket, Washington analysts assume broad continuity in her foreign policy approach, although nuances may yet emerge. But while a Harris election and a second Trump presidency contrast sharply on policy and style, the views from Seoul and Tokyo point to enduring elements of American foreign policy that are likely in either outcome. In many ways, Trump and Harris share an approach to U.S. economic engagement in the Indo-Pacific. Upon taking office in 2017, Trump fractured the Obama administration’s core economic pillar of the so-called rebalance to Asia by withdrawing from the Trans-Pacific Partnership. This divorce drew dismay particularly from Japan; Tokyo had seen the 12-nation free trade pact as its primary tool to blunt China’s rising economic sway over the region and to reinforce its Free and Open Indo-Pacific strategy (FOIP). The Biden-Harris administration has similarly expressed little enthusiasm for re-joining the reformed version that Japan salvaged after the U.S. withdrawal, and its signature regional economic policy, the Indo-Pacific Economic Framework (IFEP) lacks the market access that the region’s economies crave. Japan and South Korea also had misgivings about the passage of domestic economic legislation such as the Inflation Reduction Act that would have penalized South Korean and Japanese investment in the United States. “Friend-shoring” rhetoric aside, both Seoul and Tokyo see either leader forging an industrial policy that defaults to protectionist trade practices. Both Japan and South Korea are also concerned about diminishing American leadership of the world and the ascendance of illiberal, authoritarian blocs. Biden and the Democratic Party have generally promoted U.S. alliances as underpinning a world order that promotes stability and the rule of law. Yet during Biden’s presidency, wars in Europe and the Middle East have flared, threatening to distract Washington from its Indo-Pacific priorities and driving deep divisions in public opinion both domestically and internationally. Trump and his Republican colleagues, on the other hand, mostly disapprove of U.S. military involvement in international conflict and fidelity to international alliances, particularly NATO. A Trump administration could undermine the rules-based system by brokering deals with authoritarian leaders, neglecting multilateral institutions that seek to quell conflict, and reinforcing the rising ideological isolationism in U.S. politics. Trump and Biden policy convergences aside, Seoul’s and Tokyo’s experiences with each president are starkly different. A Trump presidency would almost certainly present deeper challenges to each country and disrupt the web of security partnerships that both countries view as broadly stabilizing. How Trump would approach the China challenge is likely to be the central question: Will he be relatively supportive of U.S. alliances in the Indo-Pacific if he sees them as amplifying U.S. power and deterrence? Or will he seek to cut his own deals with Beijing that excludes allies’ interests? Would he demand multifold increases in the burden-sharing agreements supporting the U.S. military presence in the region that allies would resist? A separate set of questions arises considering a Democratic victory. Would Harris opt to continue Biden’s approach to alliances? Would her administration see the Indo-Pacific as equally important to the trans-Atlantic partnership? Would Harris’s foreign policy team have a different view of how to handle strategic competition with China? All of these yet-unanswered questions loom large for Japan and South Korea over the coming months.
Topic:
Foreign Policy, Domestic Politics, Alliance, Donald Trump, Strategic Competition, Presidential Elections, and Kamala Harris
Political Geography:
Japan, Asia, South Korea, and Northeast Asia

99. On U.S.-China Relations & Security

Author:
Lyle Morris and Wu Xinbo
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
In the run-up to the November 2024 U.S. presidential election, national security issues are playing a key role in the campaigns of the two candidates — Democrat Kamala Harris and Republican Donald Trump. In particular, since China has been identified as the United States biggest “strategic competitor” during both the Trump and Biden administrations, a key question is how will the trajectory of U.S.-China relations will be affected under a Harris or a Trump presidency? This article explores how both candidates will approach China if elected president. In particular, both authors will present U.S. and Chinese perspectives of how both candidates will influence bilateral relations, with a particular focus on national security. The central question to be considered is this: Will there be any discernible changes to U.S. policy towards China under a Harris or a Trump presidency? If so, what changes might be expected? Both authors agree that there will be few differences at the macro level in the China strategies of Harris and Trump: “strategic competition” has become deeply ingrained as the guiding principle within the U.S. national strategy towards China. Furthermore, national security has seeped into U.S. trade and investment policy toward China in recent years, to include greater U.S. export controls on high-technology commodities. Thus, it is likely that both candidates will continue policies that nest national security considerations within an overall economic approach toward China. However, we may expect tactical differences in both candidates’ policies regarding trade and U.S. approaches to alliances. Harris will likely continue policies under a Biden administration that prioritize the central role that U.S. alliances in Asia and Europe play in the world. While Trump will likely inject uncertainty into the role of alliances within strategic competition with China. He will also likely adopt a much more aggressive stance on trade, to possibly include heavy tariffs on China, that may destabilize an already unstable bilateral relationship.
Topic:
Security, National Security, Bilateral Relations, Strategic Competition, and Presidential Elections
Political Geography:
China, Asia, North America, and United States of America

100. On the Road of Excess: How Startups Are Driving China’s Electric Vehicle Boom

Author:
G. A. Donovan
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
A complex mix of ingredients came together to create China's electric vehicle boom, but government subsidies alone cannot explain the emergence of the industry's sophisticated ecosystem and vast manufacturing capacity. An alternate explanation is that Chinese carmakers could scale up and rapidly expand production of electric vehicles because they have access to the deep pools of flexible financing provided by capital markets, sovereign wealth funds, and private equity and venture capital investors, both in China and from overseas. China’s electric vehicle startups have raised billions from investors eager to finance potential unicorns in innovative, environmentally friendly industries. Taking inspiration from Tesla, Google, and other Silicon Valley pioneers, the founders of these startups have relied on rising valuations to attract new investment to sustain their operations despite years of losses. However, many of China's electric vehicle startups now find it hard to raise funds as their valuations have plummeted, and the market forces that drove the industry's breakneck growth may now be slowing it down.
Topic:
Investment, Manufacturing, Subsidies, and Electric Vehicles
Political Geography:
China and Asia