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41. Japanese Economic Security as “Derisking”

Author:
Kazuto Suzuki
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
This paper examines the concept of “derisking” and how the Japanese Economic Security Promotion Act (ESPA) has responded to it within the framework of deterrence theory. It explores how ESPA allows deterrence by denial against economic coercion by other states and is itself a derisking measure. It contends that deterrence by denial, which means reducing dependency and improving resilience, could include stockpiling strategic materials, diversifying sources of supply, developing alternative materials, and developing alternative products. However, this paper argues that there is a need to strengthen the mechanism for collaborative deterrence by denial, such as the “Coordination Platform” presented at the G7 Hiroshima Summit. As for other forms of deterrence, such as institutional deterrence and deterrence by punishment, their effectiveness is insufficient, and they face many implementation problems. Therefore, this paper argues that the most optimal derisking strategy at this point is the combination of ESPA and the “Coordination Platform” to strengthen the capabilities of deterrence by denial.
Topic:
Risk, Deterrence, Economic Security, and Coercion
Political Geography:
Japan and Asia

42. Is Economic Security National Security? Defining South Korea’s Economic Security for Future Industries

Author:
June Park
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
This paper explores how South Korea defines “economic security.” Amidst geopolitical turbulence, the framing of this concept by governments and policy circles around the globe is reflective of the changes in the global economy post-pandemic and the ongoing war in Ukraine, two critical junctures that have revealed the geo-economic impact of weaponized interdependence. While the Biden administration has laid out U.S. policy intent to combine national security with economic security, specifically on future industries of dual-use nature ranging from chips to EVs, batteries, and generative AI, countries that are on the receiving end of policy implementation are formulating their response to the shifting geoeconomics. This paper unravels South Korea’s framing of economic security and policy response by analyzing legislation on future industries that is critical to the country’s economic growth and standing and the concerted efforts by the state bureaucracy and industry in shaping the concept. The paper draws specifically upon semiconductors in addition to other future industries that are central to the South Korean economy and related legislation in the South Korean National Assembly. It argues that South Korea’s policy response and framing of its economic security has more to do with the protection of industries for the future amid geopolitical turbulence and the reshuffling of global supply chains than traditional security issues related to the U.S.-ROK alliance. Moreover, public anxiety on the pressures toward U.S.-driven trilateral cooperation reveals concerns on a possible backlash from China and the lagging potential of Japan in future industries.
Topic:
National Security, Geopolitics, Industry, and Economic Security
Political Geography:
Asia, South Korea, and United States of America

43. China’s Perspective on Economic Security

Author:
Audrye Wong
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
This paper examines how Beijing views economic security as well as other countries’ actions in this realm. Economic security is not a new or foreign concept to Chinese thinkers and policymakers, but the emphases, concerns, and priorities have evolved, due in part to changes in the international environment as well as in China’s own economic and geopolitical situation. This paper examines how Chinese leaders and scholars have approached the definition and scope of economic security, as well as recent and proposed policy responses. It draws on a range of Chinese-language official documents and scholarly writings, as well as broader secondary source analyses. The paper explores that while Chinese discussions of economic security tend to be framed as ensuring economic development and stability, development is implicitly and explicitly linked to national security. Many writings emphasize that economics is the foundation for national strength (including military capabilities). As such, it is more than just economic survival and growth for the economy’s sake; it also has implications for China’s geopolitical position in the international order. In that respect, economic stability and national security may be hard to separate. Indeed, we see a resurgence in today’s rhetoric about the notions of development and security as inextricably linked, along with the need to coordinate the two—and in service of maintaining CCP rule and regime stability. Finally, the paper shows Beijing is taking concrete steps toward increased legalization and institutionalization of economic security measures. This represents a shift, at least in the domain of retaliatory countermeasures, from its usually more “informal” approach to economic coercion, which has afforded more flexibility and minimized political costs for the regime. At the same time, actual implementation has been relatively limited thus far.
Topic:
Foreign Policy, Development, National Security, Trade Wars, and Economic Security
Political Geography:
China and Asia

44. South Korea: Caught in the Crosshairs of U.S.−China Competition Over Semiconductors

Author:
Paul Triolo
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
This paper explores how countries with advanced semiconductor industries are caught in the middle of the growing U.S.-China competition in technology that is focused on advanced computing. Among them, South Korea and its national champions, Samsung and SK Hynix, have arguably incurred some of the most significant pressure. This paper explores how those firms have billions of dollars of sunk investment in China-based facilities producing cutting-edge memory, and the future of these facilities remains in doubt after a series of U.S. export control measures unleashed by the U.S. Commerce Department starting in October 2022. South Korean companies are also players in other parts of the global semiconductor supply chain, including semiconductor manufacturing tools, and China remains an important market for both components and electronic devices. This paper argues that each country caught between the United States and China in technology competition faces difficult trade-offs in determining how best to support its leading companies while navigating changing and often what is viewed as arbitrary decisions coming from Washington that have already significantly disrupted global supply chains. Finally, at the same time as U.S. export controls are having a major impact on the ability of South Korean companies to retain business operations and market access in China, major front-end manufacturers, particularly Samsung, are also looking to expand their operations in the United States and benefit from U.S. CHIPS Act funding. This paper argues that all of the above dynamics put South Korea in one of the more complex positions as the industry faces continued restructuring, buffeted by both export controls and industrial policies.
Topic:
Supply Chains, Economic Security, Semiconductors, and Economic Competition
Political Geography:
China, Asia, South Korea, and United States of America

45. The Raw Materials of Economic Security: South Korea’s Evolving Energy and Critical Minerals Policies in an Era of Disruption

Author:
James Bowen
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
This paper argues that resource security is central to South Korea’s broader economic security and President Yoon Suk-yeol’s Strategy for a Free, Peaceful, and Prosperous Indo-Pacific Region. The paper contends that postwar Korea has maintained an energy and minerals-intensive economy despite domestic resource scarcity and import dependence. Recent disruptions have, however, threatened the resilience of this relationship. These disruptions include COVID-19, Russia’s war in Ukraine, the escalating climate change crisis and energy transition, and the geoeconomic and geopolitical erosion of the liberal order. Korea’s most important energy security priority is diversifying its energy mix towards cleaner energy—what this paper calls “green security.” This will be a difficult task given the intense national dependence on fossil fuels and policymakers’ desire to avoid disrupting Korea’s manufacturing-heavy, export-focused development model. Korea’s idiosyncratic decarbonization pathway, including a strong presence of hydrogen and, under Yoon, a downgrading of renewables in favor of nuclear, could provide additional challenges. Critical minerals are another rising resource security concern for Seoul. The major priority is to accelerate the development and diversification of international supply chains, particularly away from China. A major obstacle to progress is intense competition across the value chain, influenced by disparate economic and strategic priorities. The paper argues that Seoul must find ways to manage its energy and critical minerals security challenges in a way that is consistent with its preferred development model. The alternative is to accept a new equilibrium in which it has less domestic dependence on foreign resources and on resources-intensive economic activity in aggregate.
Topic:
Geopolitics, Strategic Competition, Minerals, Economic Security, and Energy
Political Geography:
Asia and South Korea

46. Economic Security and U.S.-China Competition: The View from North Korea

Author:
Rachel Minyoung Lee
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
This paper argues that while North Korea does not discuss “economic security” in domestic contexts or have an established definition of the term, it thoroughly understands that the economy and national security are inseparable. North Korea is essentially unaffected by the typical economic issues that many major economies are grappling with in relation to economic security, but like other countries, it has closely tracked economic security developments and deepening U.S.-China strategic competition for potential political fallout and what opportunities and challenges that may generate. The paper shows that U.S.-China strategic competition has offered unique opportunities to North Korea, including China’s cover against fresh and existing sanctions against North Korea, and economic assistance. Moreover, deteriorating U.S.-China ties provide Pyongyang extra space to consider and put into motion alternative foreign and economic policy paths, namely, shifting away from its three-decade policy of nonalignment with China and normalization of relations with the United States. Also, China appears to be a factor in North Korea’s shift to a more conservative economic policy. Despite the opportunities presented by the U.S.-China divide, however, North Korea is wary of the risks of dependence on China and has tried to build economic resilience at home, for example by launching a national campaign on domestic production and recycling. North Korea’s somewhat cooler handling of China and its proportionately warm treatment of Russia since the Armistice Day celebrations in July is a clear example of North Korea’s China dilemma. This is where North Korea’s recent strengthening of ties with Russia comes into the picture. The paper contends that it is hard to conclude at this point whether North Korea’s moves are aimed at short-term, tactical gains or are part of a longer-term, strategic calculus, but we can be certain of this: it has just as much to gain or lose as any other country affected by economic security and U.S.-China strategic competition, though not in the same ways as other countries.
Topic:
Foreign Policy, Strategic Competition, and Economic Security
Political Geography:
China, Asia, North Korea, and United States of America

47. Labour market inequality in two Asian giants Indonesia and India compared

Author:
Kunal Sen
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We examine the nature of labour market inequality in Indonesia and India, using a common conceptual approach drawing from the job ladder framework. In the framework, we differentiate between self-employment and wage-informal and between formal, upper tier informal, and lower tier informal jobs. We find that both countries have a large proportion of workers in lower tier jobs, though the importance of wage-employment is larger in Indonesia. There are more workers in formal wage-employment in Indonesia than India. There are also sharp disparities in the earnings of workers in different tiers of the labour market in Indonesia and India, and there is limited evidence of convergence of the earnings of the lower tier informal workers to that of formal workers, at least for Indonesia. We also find that gender and educational level are important correlates of work status in both countries. Females and less educated workers occupy the lower tiers of the labour markets in the two countries.
Topic:
Employment, Inequality, Economy, Labor Market, and Informal Economy
Political Geography:
South Asia, Indonesia, India, and Asia

48. Faraway, so close: the impact of the Russia–Ukraine war on political violence in Asian countries

Author:
Michele Di Maio, Valerio Leone Sciabolazza, Patricia Justino, and Cecilia Nardi
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We show that the Russia–Ukraine-war-induced changes in the international price of wheat affected political violence in Asia. Using data from 13 countries and more than four million cell-level observations, we show that a higher wheat price increases political violence in areas that are more suitable to produce that crop. We interpret this evidence as consistent with a rapacity effect being at play: the higher value of agricultural output increases the incentive to violently appropriate it. Our result is robust to a number of falsification and robustness tests. The effect is heterogeneous across countries and cell types: in line with our interpretation of the empirical findings, the effect is larger in countries that are net exporters of wheat and in cells that are rural. We also show that a higher price of wheat increases political violence more in countries that are low-income, fragile, and characterized by the presence of anti-government or terrorist groups, indicating that a higher value of crop production is more likely to fuel violence in areas that are poor or not politically stable.
Topic:
Political Violence, Instability, Russia-Ukraine War, and Wheat
Political Geography:
Asia

49. Unpacking China’s industrial policy and its implications for Europe

Author:
Alicia Garcia-Herrero and Robin Schindowski
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
China is often credited with a successful application of industrial policy. One important particularity of China’s industrial policy is that it aims at levelling the playing field between the state economy and the private economy in access to finance, yet within a framework of strategic goals. This aim is not relevant for market economies, such as those of the European Union, but only for those where state enterprises are clearly privileged. Notwithstanding the difficulties in making valid comparisons, our analysis of how China conducts industrial policy in a variety of sectors points to success in some sectors but not all. More importantly, productivity growth in China has already been declining for two decades. Given the very large resources that China has put into industrial policy, with subsidies being only one part, it is surprising that success is not more evident. This relates partly to factors including cronyism and regional protectionism. While the former might be less relevant for the EU given the different institutional background, the latter certainly is relevant since the EU faces the potential consequences of member country-level industrial policy for its single market. A lesson from China seems to come from the sectoral focus, with a long-term and economic-security mindset. The EU is far from this, but it is in the process of linking economic security to industrial policy. Finally, responding to China’s industrial policy involves diverse investigations and challenges in measuring subsidies accurately. Understanding China’s very diverse and complex approach to helping companies achieve the government’s industrial policy goals is crucial for anticipating the consequences of China’s actions. These could be positive, such as cheaper imports of green technology, or negative, such as Chinese overcapacity spilling over to the EU single market.
Topic:
Industrial Policy, Markets, European Union, and Economy
Political Geography:
China, Europe, and Asia

50. The Future of the Belt and Road in Europe: How China’s Connectivity Project is Being Reconfigured across the Old Continent – and What It Means for the Euro-Atlantic Alliance

Author:
Nicola Casarini
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
China’s Belt and Road Initiative (BRI) has entered the twilight zone in the old continent, following a deterioration of bilateral relations between the EU member states and China over the last years. Italy’s official exit from the BRI at the end of 2023 was a further blow to Chinese President Xi Jinping’s signature foreign policy. Yet, the BRI in Europe is being reconfigured rather than being terminated. In Western Europe, the BRI is moving away from physical infrastructure projects and investment in industrial assets – the latter being increasingly protected from Chinese takeovers by both national and EU legislation – to financial and monetary connectivity. This shift is welcomed by various European actors, including some policymakers at the national level, eurozone institutions and major banks. Concurrently, most of Eastern European countries continue to promote BRI projects and seek to attract Chinese investments, suggesting that there is a two-speed Europe when it comes to China, both in terms of geography and sectors.
Topic:
Infrastructure, Foreign Direct Investment, European Union, Belt and Road Initiative (BRI), and Currency
Political Geography:
China, Europe, Asia, and Italy

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