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101. Women and Leadership in the ASEAN Digital Economy: Mapping the Rhetorical Landscape

Author:
Araba Sey and Sara Kingsley
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper assesses the nature of policy, media, and research representations of women’s inequality in digital leadership, reflecting on how clearly they define the issues, causes, solutions, and resource needs. Overall, women’s status in digital leadership receives patchy coverage in the media and insufficient depth of examination in academic and policy research. Existing rhetoric recognises women’s inequality as a serious problem in the ASEAN digital economy. However, the dimensions, causes, and solutions especially in terms of digital leadership are rarely clearly defined. There is a dominance of economic narratives to support the need for more women in digital leadership, which demonstrates a higher interest in women as an engine of economic growth than in equal representation as a matter of principle. A heavy dependence on global, European, or North American data highlights the need to improve the collection of gender-disaggregated data within the ASEAN economy.
Topic:
Women, Digital Economy, Feminism, and Gender
Political Geography:
Asia and ASEAN

102. Gender Security and Safety in the ASEAN Digital Economy

Author:
Araba Sey
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Gender-based cyber violence inhibits progress towards gender digital equality by discouraging women from participating in the digital economy. From the magnitude of the problem to its economic and social impacts, much remains to be understood about how women experience safety and security in the Association of Southeast Asian Nations (ASEAN) digital economy. Drawing on academic and grey literature, this paper reflects on the implications of gender-based cyber violence for digital equality and economic development. Overall, data are lacking on the prevalence, economic costs, and social impacts of gender-based cyber violence within ASEAN. Policy tends to focus more on measuring domestic and intimate partner violence, likely due to its designation as the main indicator for Sustainable Development Goal 5. Although a variety of national, regional, and global frameworks exist to address different dimensions of violence against women, cybersecurity, and workplace harassment, more work is needed to identify the scale and scope of gender-based cyber violence in the region, in order to target policy appropriately.
Topic:
Security, Women, Digital Economy, and Gender
Political Geography:
Asia and ASEAN

103. Global Value Chain Participation and Labour Productivity in Manufacturing Firms in Viet Nam: Firm-Level Panel Analysis

Author:
Upalat Korwatanasakul and Tran Thi Hue
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study describes the status of global value chains (GVCs) in Viet Nam and examines the roles of GVC participation and technology in enhancing labour productivity in manufacturing firms. The estimation method is a panel fixed-effect regression employing unique firm-level data matching the Vietnam Technology and Competitiveness Survey and Vietnam Enterprise Survey, 2009–2018. The findings show the positive effect of backward GVC participation when considering firm GVC participation status (i.e. whether they engage with backward linkages). However, when accounting for GVC participation degree (i.e. GVC participation index), the results show a stark contrast, revealing the negative effect of backward GVC participation on labour productivity. The results, therefore, partly reject the learning-to-learn hypothesis. On the other hand, regardless of GVC indicators, forward GVC participation positively impacts labour productivity, confirming the views of learning-by-exporting and learning-by-supplying. The findings also suggest the significance of research and development, digital technology, and foreign investment in enhancing labour productivity. Therefore, policies promoting forward GVC participation should be the priority, while policies to promote backward GVC participation should be well designed and accompanied by policies that ensure technology transfer and domestic technology development to avoid the trap of a subordinate role.
Topic:
Labor Policies, Manufacturing, Industry, Global Value Chains, and Labor Market
Political Geography:
Asia and Vietnam

104. Japan and the Regional Comprehensive Economic Partnership (RCEP)

Author:
Mie Oba
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper aims to clarify the role of Japan in the process leading up to the establishment of the Regional Comprehensive Economic Partnership (RCEP). While emphasising that respect for the centrality of the Association of Southeast Asian Nations (ASEAN) was a principle of RCEP, Japan played a leading role in the process of RCEP negotiations. For Japan, RCEP is one of the fruits of its strategy in East Asia/Asia-Pacific that began the mid-1990s to protect and increase the interests and advantages of Japanese business and retain Japan’s political leverage in the region. When substantial negotiations for RCEP began in 2013, its importance for Japan was secondary to other free trade agreements (FTAs) including the Trans-Pacific Partnership, China–Japan–Korea FTA, and Japan–European Union FTA. However, the Government of Japan and the business community had set a lot of economic and strategic goals in promoting RCEP. After the withdrawal of the United States (US) from the Trans-Pacific Partnership, RCEP was seen as an essential framework for establishing a rules-based regional order in the Indo-Pacific region. Although it was after India’s withdrawal from the RCEP negotiations, Japan further emphasised the importance of RCEP as the measure to sustain and foster the rule-based regional order and simultaneously pursued the conclusion of negotiations and the establishment of high-level rules, achieving some success. Ultimately, the havoc brought about by the coronavirus disease (COVID-19) pandemic and the sense of crisis in the traditional liberal international order caused by the intensifying strategic competition between the US and China, drove the conclusion of RCEP. RCEP will be increasingly important for economic order in Japan and Asia in the coming years. Ironically, as the strategic competition between the US and China escalates and leads to a surge in protectionism, the economic and strategic importance of RCEP – an FTA that incorporates China – is becoming more significant as a measure to counter unilateralism and protectionism. In addition, RCEP needs elements that address globalisation’s adverse effects and pitfalls, in areas such as the environment, labour rights, and a reduction in the disparity between the rich and poor.
Topic:
Development, Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Japan and Asia

105. RCEP Services Liberalisation: Key Features and Implications

Author:
Ramonette B. Serafica and Intan Murnira Ramli
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The Trade in Services Chapter of the RCEP Agreement establishes the rules for the progressive liberalisation of trade in the region and sets out regulatory disciplines to mitigate barriers to competition. Considered the most significant feature of the RCEP agreement compared to other FTAs of ASEAN is the scheduling of market access commitments using the negative list approach. Thus, an immediate challenge for members that initially adopted the positive list is the transition to the negative list scheduling approach. Furthermore, members will need to implement competitive and robust regulations in liberalising services. Developing countries, especially LDCs, might also face capacity constraints to fully take advantage of the market access given by the RCEP partners.
Topic:
International Trade and Finance, Regional Cooperation, Liberalism, and Progressivism
Political Geography:
Asia and ASEAN

106. International Production Network in the Next Generation and the Role of RCEP

Author:
Mitsuyo Ando, Fukunari Kimura, and Kenta Yamanouchi
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper attempts to discuss the potential role of RCEP from the perspective of two kinds of international division of labor, i.e., machinery international production networks (IPNs) and digital-related services trade. To consider the possible contribution of RCEP to the widening and deepening of IPNs, we first provide an overview of machinery IPNs in ASEAN and East Asia by employing international trade data, a value-added based index for global value chain (GVC) activities using international input–output tables, and a gravity equation exercise. Then, we focus on trade in two global innovator services – information and communication technology (ICT) services and other business services exports – to foresee the future of the new international division of labour and highlights some policy issues. RCEP should be an evolving, living one. In terms of liberalisation and facilitation as well as international rule-making, which cover the whole region, RCEP is expected to revise and upgrade the contents to support the dynamic international division of labour in East Asia. At the same time, RCEP may play an important role in reducing policy risks due to ad hoc trade policies based on political intension and defending the rules-based trading regime for the regional economy.
Topic:
Economics, International Trade and Finance, Labor Issues, and Digital Economy
Political Geography:
Asia and ASEAN

107. Potential Impact of RCEP and Structural Transformation on Cambodia

Author:
Shandre Mugan Thangavelu and Vutha Hing
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines the potential impact of the Regional Comprehensive Economic Partnership (RCEP) on the Cambodian economy in terms of trade, output growth, and employment. It also provides quantitative (structural gravity model estimation and simulation) and qualitative trade policy evaluation in terms of exports, output, and the structural transformation of the economy in global and regional value chains. The results highlight the importance of RCEP for the pandemic and post-pandemic recovery and the structural transformation of the Cambodian economy. The paper also provides key policy recommendations to fully maximise the benefits of RCEP for Cambodia for inclusive and sustainable growth.
Topic:
Economics, International Trade and Finance, Regional Cooperation, and Global Value Chains
Political Geography:
Asia and Cambodia

108. The Implications of the Regional Comprehensive Economic Partnership (RCEP) for Asian Regional Architecture

Author:
Shiro Armstrong and Peter Drysdale
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
East Asia’s Regional Comprehensive Economic Partnership (RCEP) came into force in 2022 as the world’s largest free trade agreement. RCEP was concluded, signed and brought into force in the face of major international uncertainty and is a significant boost to the global trading system. RCEP brings Australia, China, Japan, South Korea and New Zealand into the same agreement with the ten member ASEAN group at its centre. It keeps markets open and updates trade and investment rules in East Asia, a major centre of global economic activity, at a time of rising protectionism when the WTO itself is under threat. The agreement builds on ASEAN’s free trade agreements and strengthens ASEAN centrality. One of the pillars of RCEP is an economic cooperation agenda which has its antecedents in ASEAN’s approach to bringing along its least developed members and builds on the experience of capacity building in APEC and technical cooperation under the ASEAN Australia-New Zealand Free Trade Agreement. There is an opportunity to create a framework that facilitates deeper economic cooperation that involves experience-sharing, extending RCEP’s rules and membership at the same time as strengthening political cooperation. The paper suggests some areas that might be best suited to cooperation — that is confidence and trust building instead of or before negotiation — and discusses how non-members such as India may be engaged and the membership expanded. Options such as multilateralising provisions and becoming a platform for policy convergence and coordinating unilateral reforms are canvassed.
Topic:
Economics, International Trade and Finance, Regional Cooperation, and Architecture
Political Geography:
Asia and ASEAN

109. Restrictiveness of RCEP Rules of Origin: Implications for Global Value Chains in East Asia

Author:
Archanun Kohpaiboon and Juthatip Jongwanich
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This chapter aims to examine the restrictiveness of rules of origin (RoO) in the Regional Comprehensive Economic Partnership (RCEP) and other key multilateral free trade agreements (FTAs) in East Asia with a view to facilitating the operations of existing global value chains (GVCs). The analysis begins with dissecting PSRs in the RoO Chapter in these FTAs and quantifying them. The key finding is that product-specific rules in RCEP are the most flexible compared to the other multilateral FTAs and more facilitative to GVC operations. This is driven by RCEP-specific features, such as high intra-member trade and the member coverage. The main policy inference is that a full cumulation clause is needed in RCEP to allow a regional value content alternative to be in full effect. Harmonisation in RoO provision across these multilateral FTAs remains a challenge for ongoing negotiation. Monitoring the dynamics of RoO as well as the FTA utilisation is needed so that these multilateral FTAs could be a true stepping stone for trade liberalisation in the broader World Trade Organization multilateral trading system.
Topic:
Economics, International Trade and Finance, Regional Cooperation, and Global Value Chains
Political Geography:
Asia and ASEAN

110. Centrality and Community: ASEAN in the Regional Comprehensive Economic Partnership

Author:
Soo Yeon Kim
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines the Association of Southeast Asian Nations’ (ASEAN) role in the formation of the Regional Comprehensive Economic Partnership (RCEP) agreement. The RCEP project proceeded as trade governance has shifted from the multilateral trade regime under the World Trade Organization to free trade agreements and where the geopolitics of Asia has cast a shadow on the progress of regional integration efforts. The analysis in this paper focuses on ASEAN centrality, both as a concept and practice, in influencing the launch and progress of RCEP. Conceptually, ASEAN centrality is about the capacity of the 10-member group to help launch negotiations for the RCEP agreement and to shape its provisions for governing trade. In practice, the RCEP agreement consolidates and significantly unravels the numerous overlapping trade agreements between ASEAN, 38 in all between individual ASEAN members and its five RCEP partners, Australia, China, Japan, the Republic of Korea, and New Zealand. The paper also examines the relationship between the ASEAN Economic Community (AEC) and RCEP. RCEP provides for further tariff liberalisation between ASEAN members and its five RCEP partners and thus expands the zone of preferential treatment for goods exported from ASEAN and other RCEP members. RCEP also consolidates rules of origin requirements under one agreement, providing for diagonal cumulation and common rules of cumulation for agreement partners. The RCEP provisions can greatly facilitate production and trade along regional supply chains, thus accelerating the progress of the AEC as a single market and production base. Moving forwards, RCEP and ASEAN’s place in it, is likely to be shaped by challenges and opportunities from the Comprehensive and Progressive Transpacific Partnership and the Biden administration’s Indo-Pacific Economic Framework (IPEF) initiative. The ASEAN members with overlapping membership in the IPEF and RCEP will be pivotal in determining areas of cooperation. Regional integration will thus continue to be shaped by ASEAN centrality, and its progress will shape the ASEAN community.
Topic:
Diplomacy, Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Asia and ASEAN

111. Regional Comprehensive Economic Partnership: Economic Backgrounds of ASEAN and Its Dialogue Partners

Author:
Keita Oikawa, Fusanori Iwasaki, and Shujiro Urata
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
We overview the economic backgrounds of the countries participating in the Regional Comprehensive Economic Partnership (RCEP) negotiations and two Association of Southeast Asian Nations (ASEAN) Dialogue Partners – the United States (US) and the European Union (EU) – to understand their economic relationships before the signing of the RCEP and their economic interests in the RCEP. We discover that the 16 countries participating in RCEP negotiations vary in terms of economic size, income level, growth pattern, share of trade in the economy, and foreign direct investment (FDI) flows. Additionally, both lower- and higher-income ASEAN Member States (AMS) have received a large amount of FDI, in contrast to Japan and the Republic of Korea (henceforth, Korea), which have seen more FDI outflows from their countries than inflows. In terms of bilateral FDI inflows and outflows, as a centre for regional FDI, Singapore attracts FDI from developed countries (including the US and the EU) and reinvests it in India and other AMS. As an FDI hub, Singapore promotes liberalised regional markets to attract advanced country investors. By examining bilateral trade relationships, we find that as the centre of manufacturing in the world, ASEAN and China have participated in international production networks that also include Japan and Korea since 2000. Japan and Korea have maintained competitiveness in intermediate goods in the region’s production networks, while China notably exports final products to the US and the EU. Amongst the 16 countries participating in RCEP negotiations, India has not had a significant presence in the production networks. Indeed, India has expanded its bilateral trade deficit with China, which probably caused India to withdraw from RCEP negotiations to protect its manufacturing industry. Simulation results of the impacts of the RCEP, using a computable general equilibrium (CGE) model (Global Trade Analysis Project model), show that the countries participating in RCEP negotiations – particularly the less developed AMS – would gain greatly from lowering services trade costs and investment liberalisation. India would also gain significantly from the RCEP. In contrast, countries not participating in RCEP negotiations (the US and the EU) would experience small negative impacts of the RCEP through trade diversion effects.
Topic:
Diplomacy, Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Asia and ASEAN

112. Regional Comprehensive Economic Partnership, ASEAN’s Agency, and the Role of ASEAN Members in Shaping the Regional Economic Order

Author:
Huong Le Thu
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The Regional Comprehensive Economic Partnership (RCEP) – a mega free trade agreement comprising 15 countries – the 10 Association of Southeast Asian Nations (ASEAN) Member States and the dialogue partners (China, Japan, the Republic of Korea, Australia, and New Zealand) was finalised in November 2020. This paper looks at the process of the RCEP negotiations as an example of an ASEAN exercising agency. This paper also argues that RCEP asserts the agency of smaller powers within the trade network – ASEAN and its member states – particularly the more active role of individual members, including Viet Nam and Singapore amongst the most diplomatically supportive of the deal. The circumstances under which RCEP came to life is not trivial. Under Viet Nam’s ASEAN chair in 2020, and amidst the global pandemic, RCEP was finalised. RCEP’s political and geo-economic significance arguably can overtake its economic role. In the time of great power competition where China becomes one of the key economic centres of the world, and the United States (US) competes with a vision of Indo-Pacific, the region’s middle and smaller powers are anxious about becoming ‘collateral damage’, particularly in the process of US–China ‘decoupling’. The ASEAN countries have emphasised the reluctance to ‘choose a side’. RCEP shows that they can show agency in carrying out trade liberalisation at the time when the global leader of the US in this field is missing. A mega-trade deal can be successfully led by smaller, and even developing, economies.
Topic:
Economics, Regional Cooperation, Social Order, and Strategic Interests
Political Geography:
Asia and ASEAN

113. Trade Facilitation in RCEP Countries

Author:
Weixiang Wang and Shandre Mugan Thangavelu
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The trade facilitation under the Regional Comprehensive Economic Partnership (RCEP) is critical for regional trade and economic cooperation amongst the 15 member countries. This chapter examines the trade facilitation under RCEP using the available datasets on the trade facilitation index and compares the current trends in trade facilitation across RCEP countries in terms of four dimensions: the World Trade Organization’s Trade Facilitation Agreement, digital trade streamlining, ease of doing business, and trade logistics performance. The study finds that RCEP countries have improved significantly in trade facilitation measures, but they vary across the countries. For example, China should further enhance its performance in cross-border paperless trade, whilst the Association of Southeast Asian Nations countries should improve their performance in the documentary compliance of trade, the infrastructure of trade, and trade logistics performance.
Topic:
Economics, International Trade and Finance, Regional Cooperation, and Regionalism
Political Geography:
Asia and ASEAN

114. Opportunities and Challenges for ASEAN and East Asia from the Regional Comprehensive Economic Partnership on E-Commerce

Author:
Jane Kelsey
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The Regional Comprehensive Economic Partnership (RCEP) is a microcosm of the current tensions in negotiations on digital trade involving parties that have divergent positions on the digital economy, data, and regulation, including within the Association of Southeast Asian Nations (ASEAN) itself. It adopts a prudent approach that recognises the state parties need flexibility and policy space at the national and regional levels to develop of policy and regulation in the rapidly changing digital ecosystem and seeks to advance their collective interests through dialogue and cooperation. This paper contrasts that approach with the disciplinary nature of binding legal obligations that are enforceable by other states and their investors, as in the Trans-Pacific Partnership Agreement and similar recent treaties. The analysis of key differences focuses on matters of particular importance to ASEAN, such as local content and government procurement, data rules and flexibilities, financial data, source codes, and transparency. RCEP’s cautious approach enables ASEAN members to deepen their national and regional understanding of the opportunities and challenges these agreements present, whilst developing and implementing their own digital development strategies. Yet those good efforts may be undermined through the binding and enforceable trade in services rules.
Topic:
Economics, Regional Cooperation, Digital Economy, and Economic Cooperation
Political Geography:
Asia and ASEAN

115. Traditional Services Trade in the Regional Comprehensive Economic Partnership

Author:
Zhang Yan and Shandre Mugan Thangavelu
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Traditional services trade (TST), including tourism and transport services, is the basic and key component of services trade in the Regional Comprehensive Economic Partnership (RCEP). The implementation of RCEP will provide a platform for further liberalisation in TST, thus effectively promoting the growth of the whole service trade and the development of the travel and transportation industry. In this paper we will first show the trade pattern of TST in RCEP. Then, the commitments by each RCEP member will be thoroughly analysed, and the Hoekman index will be constructed to measure the liberalisation levels for the RCEP members. In the last section, we outline some impacts of the COVID-19 pandemic on TST and propose policy implications for RCEP in the post pandemic era.
Topic:
Economics, Tourism, Services, and Transportation
Political Geography:
Asia and ASEAN

116. The Investment Chapter in the Regional Comprehensive Economic Partnership: Enhanced Rules without Enforcement Mechanism

Author:
Henry Gao
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines the legal rules in the investment chapter in the Regional Comprehensive Economic Partnership (RCEP). It starts with an overview and summary of the main provisions in the chapter, followed by an assessment of the rules by comparing established free trade agreements (FTAs), especially the Comprehensive and Progressive Trans-Pacific Partnership. In particular, it notes that the chapter, whilst largely following the established approaches to investment in other FTAs, also includes important twists to the common rules to favour the host states. The last part discusses the conspicuous absence of an investor–state dispute settlement mechanism, its pros and cons, and wider implications on regional integration, then concludes with some thoughts on future developments.
Topic:
Economics, Regional Cooperation, Economic Cooperation, and Strategic Interests
Political Geography:
Asia and ASEAN

117. How Preferential are RCEP Tariffs?

Author:
Kazunobu Hayakawa
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study discusses the extent to which the tariffs provided in the Regional Comprehensive Economic Partnership (RCEP) are preferential. RCEP does not necessarily adopt a common concession rule in tariffs, and the speed and depth of tariff reduction/elimination also differ by country. We show that RCEP tariffs become the best choice in trading some specific products with some specific countries in some specific years. Furthermore, there are some specific cases where the use of RCEP tariffs becomes beneficial even if RCEP tariffs are not lower. Therefore, we demonstrate that RCEP tariffs are beneficial in specific types of supply chains. In short, this study aims to enhance our comprehensive understanding of how preferential RCEP tariffs are compared with other types of available tariffs.
Topic:
Diplomacy, Regional Cooperation, Tariffs, and Economic Cooperation
Political Geography:
Asia and ASEAN

118. The Regional Comprehensive Economic Partnership Agreement and Europe: Impact and Implications

Author:
Haans Gunther Hilpert
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
In the first 2 decades of the millennium, European Union (EU) trade policy underwent historic changes, amongst them an explicit pivot to Asia. Along with continued firm support of the rules-based World Trade Organization (WTO)-centred multilateral trading system, important new directions in the EU’s trade policy included a turn to competitive bilateralism, a strong focus on values, an ambition to protect and to promote European trade standards as well as the politicisation of trade policy. Asia’s outwards looking economic growth, the increasing trade interdependence in Asia as well as the various bilateral and multilateral trade agreements in the region, notably amongst them the Regional Comprehensive Economic Partnership (RCEP), attracted the EU’s attention, and have helped cause and drive these changes. There was no particular Asian influence on the EU’s own regionalisation, however. Meanwhile, trade and investment relations between Europe and Asia have intensified greatly over this period. But the EU has been slow and late to formulate a comprehensive strategy for the Indo-Pacific region. In spite of some notable successes, the EU’s trade policy remains fragmented with differentiated approaches for each trading partner. Opinions on the RCEP’s relevance and importance for Europe are divided. RCEP sceptics point to the overall shallow nature of the agreement. RCEP optimists emphasise the future potential of trade and investment integration within the newly established RCEP economic area and warn of the discriminatory effects for Europe’s economy and businesses. So, Europe’s business will have to invest in the new RCEP free trade zone to overcome trade diversion risks and to benefit from the RCEP market integration. More worrying from Europe’s perspective is RCEP’s potentially negative policy impacts: a relative loss in the EU’s trading power, the risk of Europe being sidelined in the make-up of future trade rules, and RCEP’s future impact on rules based multilateralism and the WTO. The EU has various trade policy options with regard to the Indo-Pacific trade area and RCEP in particular. The most promising options include the conclusion of free trade agreements with as many RCEP member countries as possible, with the Association of Southeast Asian Nations as a group (as a region-to-region agreement), with other trading partners (from the Indo-Pacific or from other world regions), or with the Comprehensive and Progressive Agreement for Transpacific Partnership area.
Topic:
Diplomacy, Economics, Regional Cooperation, and Economic Cooperation
Political Geography:
Asia and ASEAN

119. The Story of RCEP: History, Negotiations, Structure, and Future Directions

Author:
Aladdin D. Rillo, Anna Maria Rosario D. Robeniol, and Salvador Buban
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper is about the story of the Regional Comprehensive Economic Partnership (RCEP), including the history, dynamics of negotiations, and structure of this multilateral framework. Issues related to ASEAN centrality, sensitivities of negotiations, and other challenges are also highlighted and analysed. Nearly a decade in the making, RCEP represents a significant achievement for the region. As an ASEAN-led process, RCEP supports not only the region’s market integration but as well as ASEAN’s economic relations with the rest of the world, particularly with the 5 RCEP FTA Partners. Beyond the impact of RCEP in supporting the multilateral trading system, it is also intended to address the current challenges in the region, including the COVID-19 pandemic crisis. Thus, the narrative of RCEP provides a comprehensive overview of, and considers the potential implications for, trade in the region; for economic integration, and for the future of trade policy.
Topic:
Diplomacy, Economics, Regional Cooperation, Regionalism, and Economic Cooperation
Political Geography:
Asia and ASEAN

120. Comparison of the Regional Comprehensive Economic Partnership (RCEP) and Other Free Trade Agreements (FTAs)

Author:
Innwon Park
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study evaluates the desirability of RCEP by comparing it with other mega-lateral FTAs. Evaluating the member-specific scale effects of the FTAs, we find that RCEP will generate significantly larger gains compared with the CPTPP. Evaluation of the provision-specific depth effects of RCEP suggests the possibility of positive gains but these gains may not be significant compared with those derived from the CPTPP. The existing CGE model analyses reveal that RCEP will generate greater gains than the CPTPP. RCEP will be more desirable for China, Japan, and the Republic of Korea and the estimated gains for ASEAN will notably increase as the model explicitly specifies the diagonal ROO cumulation scheme. Considering the sequence of implementing FTAs, we find that the CPTPP will generate greater gains for dual members, but the marginal gains enjoyed by RCEP members will not be substantial.
Topic:
Diplomacy, International Trade and Finance, Regional Cooperation, Free Trade, and Economic Cooperation
Political Geography:
Asia and ASEAN

121. The Post COVID-19 and RCEP: Pandemic Recovery in East Asia

Author:
Shandre Mugan Thangavelu, Shujiro Urata, and Dionisius Narjoko
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The paper examines the impact of the Regional Comprehensive Economic Partnership (RCEP) on the COVID-19 pandemic recovery of the East Asian countries. Recent studies highlight the positive gains from the RCEP agreement for all 15 of its member countries (Itakura, 2022, Petri and Plummer, 2020; Park, 2022). However, the recovery will be not even across East Asia. The East Asian countries of China, Japan, and the Republic of Korea (CJK) are likely to have the largest gains, as these countries dominate the regional global value chain (GVC) activities. The ASEAN least developed countries of Cambodia, the Lao People’s Democratic Republic (Lao PDR), and Myanmar also experience positive gains from RCEP, but need to undertake deeper structural reforms to fully benefit from the agreement. The RCEP framework has elements that will be crucial for the post-pandemic recovery and regional transformation: (i) accelerating and enhancing GVC activities through the single rule-of-origin framework for the 15 RCEP member countries and CJK (China, Japan, and Korea) effects; (ii) services liberalisation and digital transformation in the key services trade of e-commerce, financial, professional, and telecommunications services; (iii) economic cooperation amongst the 15 RCEP member countries to address key contingency issues such as mass vaccination and health infrastructure, protocols for the movement of people, and trade capacity building for ASEAN least developed countries; and (iv) the ‘living’ nature of the RCEP agreement will be able to create a wider regional integration agenda to address key contemporary issues such as environment and climate change, skills development, green transformation, and developing digital and smart urban centres. ASEAN centrality, as highlighted by the RCEP framework, is critical for the post-pandemic recovery and structural transformation of the region.
Topic:
Regional Cooperation, Recovery, Pandemic, and COVID-19
Political Geography:
Asia and ASEAN

122. Australia’s Interests in East Asia’s Regional Comprehensive Economic Partnership

Author:
Shiro Armstrong
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The Regional Comprehensive Economic Partnership (RCEP) agreement was seen as important for Australia economically and politically from its inception. RCEP economies account for roughly two-thirds of Australia’s total trade and being part of an Association of Southeast Asian Nations (ASEAN)-led initiative that progressed broader East Asian economic integration was consistent with the structure of Australia’s trade interests and with Australia’s support for the multilateral trading system. Australia has a track record of pursuing regional cooperation that supports multilateral trade and for supporting regional integration that is outward oriented. RCEP became more important economically, politically, and strategically throughout its negotiations. It furthered East Asian economic integration that avoided fragmentation but also to entrench the ASEAN Economic Community project. Concluding RCEP took on greater importance and urgency as a ballast against the rising protectionism globally in the latter half of 2010. The ASEAN–Australia–New Zealand Free Trade Area (AANZFTA) included an economic cooperation agenda focused on capacity building that was seen as a success for its members and shaped Australia’s approach and support towards economic cooperation being a pillar of RCEP. Negotiations for RCEP were chaired and led by Indonesia and ASEAN. Australia played a proactive role in pushing for high standards – credible market access commitments and new rules – in negotiations. Australia was one of the RCEP member countries that was also negotiating the Trans-Pacific Partnership (TPP) in parallel. The interest in the TPP was to keep the United States productively engaged in the region and to further rule-making and liberalisation amongst the TPP members. Having overlapping membership between the TPP and RCEP would mean that there was less chance of significant divergence or inconsistencies between them, although the approach differed. The deterioration of Australia’s economic and political relationship with China makes the RCEP framework potentially more important for facilitating the rebuilding of trust and confidence.
Topic:
Diplomacy, International Trade and Finance, Regional Cooperation, and Economic Cooperation
Political Geography:
Asia, Australia, and ASEAN

123. China and the Regional Comprehensive Economic Partnership: An Economic and Political Perspective

Author:
Zhang Yunling
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper studies China’s policies and participation in East Asian economic integration and cooperation. The progress of the Regional Comprehensive Economic Partnership (RCEP) is remarkable in the time when global as well as regional economies are facing so many challenges. China as the largest economy in East Asia plays a key role in sustaining regional dynamism. China is active and constructive in initiating the Association of Southeast Asian Nations (ASEAN+1) free trade agreements (FTAs) and an integrated framework of FTAs in East Asia. As RCEP was initiated by ASEAN and supported strongly by China it is essential to keep East Asian economic dynamism: the conclusion of the RCEP negotiations and the implementation has great effects. China’s gains from RCEP are not just economic, but also political. Whilst this paper focuses on economic gains for China, it also analyses the political gains for China, for example, against ‘decoupling’ and political division, which is harmful to East Asian integration and cooperation. The novel coronavirus disease (COVID-19) pandemic is still ongoing, so the timely enforcement of RCEP is important as it gives confidence to the region to keep the region open and to work together to make East Asia dynamic in facing the challenges. Some challenges for East Asia are (i) how to rebuild the supply chains that are either weakened or broken by the pandemic; (ii) how to overcome the new barriers created by government policies in the name of ‘national security’ both in trade and investment areas; and (iii) how to overcome the new divisions created by the United States’ policy under its comprehensive strategic competition with China that leads to the exclusive arrangements in East Asia. East Asian economic integration and cooperation are based on two basic principles: openness and inclusiveness. As a region with great diversity, it is crucial to provide opportunities for all parties with difference. China will continue its open policy and actively participate in multilateral and regional arrangements, and as the largest economy in East Asia it serves as a key pillar to be a centre of the global economy. China will take RCEP as an essential framework to enhance its interest and role in East Asia, as well as in the Asia-Pacific against a politically oriented Indo-Pacific initiative.
Topic:
Regional Cooperation, Geopolitics, Regionalism, and Economic Cooperation
Political Geography:
China, Asia, and ASEAN

124. Heyday of Asian Regionalism? The Implications of the Regional Comprehensive Economic Partnership for the United States

Author:
Mireya Solís
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper analyses the implications of the entry into force of the Regional Comprehensive Economic Partnership (RCEP) for the United States (US). Traditionally, trade policy has been central to the United States’ aim to position itself as a Pacific power and architect of the evolving regional economic architecture. Over the years, however, US trade strategy has evolved in distinct ways: from an emphasis on bilateral trade negotiations and open regionalism (in the Asia-Pacific Economic Cooperation [APEC] forum) to the pursuit of a high-standard transregional trade agreement (in the Trans-Pacific Partnership [TPP]); and more recently under the Trump administration the pursuit of unilateralism and the resort to tariffs as a form of leverage vis-à-vis competitors (China) and partners (allies in Europe and Asia) alike. When the RCEP negotiations launched, there was little concern in US policymaking circles that the emerging trade grouping in Asia could be disadvantageous for the US given that the TPP project was an effective vehicle to advance the US vision for quality economic integration and to cement its position in the dynamic Asian region. However, the US withdrawal from the TPP and the successful conclusion of the RCEP talks (even with the absence of India) have changed that calculus. This paper identifies three main implications of RCEP for the United States at this juncture: growing marginalisation from intra-Asian trade, diminished rulemaking capabilities as alternative standards disseminate widely in the region, and lessened diplomatic clout as the United States struggles to incorporate trade liberalisation into its Asia policy. A fourth possible consequence – a renewed interest in joining the Comprehensive and Progressive for Trans-Pacific Partnership – has not materialised. Instead, the Biden administration is developing an Indo-Pacific Economic Framework that will not include market access negotiations but will focus instead on issues such as supply chain resilience, infrastructure, and the digital economy. The ability of the United States to offer a compelling plan of economic engagement with the region is in question, raising the spectre of marginalisation whilst Asian regionalism makes strides.
Topic:
Diplomacy, Regional Cooperation, Regionalism, and Economic Cooperation
Political Geography:
Asia, North America, United States of America, and ASEAN

125. Changes in Trade and Investment Policies in Thailand and the Implications for Medium-term Growth

Author:
Archanun Kohpaiboon and Juthatip Jongwanich
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
his paper addresses the noticeable changes in trade and investment policies in Thailand in the new millennium and assesses their impact. These changes began with trade policy changes from the World Trade Organization to free trade agreement (FTA)-induced liberalisation, followed by changes in investment policies, all of which are to boost firms’ productivity and medium-term growth. Our results suggest that the policy changes are yet to produce the output the government expects. The signed FTAs’ impact on trade has been limited so far and has occurred selectively on certain product lines, as did the FTA-induced direct investment. Similarly, changes in investment policies had the impact of enticing direct investment but this varied across investors’ nationalities. The impact on firm productivity is also limited and found only for investment promotion policies. Our analysis highlights the role of traditional tools, i.e. trade openness, research and development, and skills upgrading, in fostering firm productivity. Whilst FTAs and investment promotion could be used as a catalyst for firms to enhance productivity, other supporting factors are also needed.
Topic:
International Trade and Finance, Regional Cooperation, Investment, Free Trade, and Economic Cooperation
Political Geography:
Asia and ASEAN

126. What Determines Interfirm Trade Credit? Empirical Evidence from the ASEAN

Author:
Sasidaran Gopalan and Ketan Reddy
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper empirically examines the link between the heterogeneity of firms and their probability of obtaining interfirm trade credit in Asia, with a specific focus on the Association of Southeast Asian Nations (ASEAN) bloc of economies. In doing so, the paper investigates the following three issues: to what extent firm size plays a role in obtaining trade credit, to what degree a firm’s integration into global value chains affects its probability of obtaining trade credit, and the impact of agglomeration on firms’ likelihood of obtaining trade credit.
Topic:
International Trade and Finance, Trade, Global Value Chains, and Credit
Political Geography:
Asia and ASEAN

127. Prediction Errors of Macroeconomic Indicators and Economic Shocks for ASEAN Member States, 1990‒2021

Author:
Masahito Ambashi, Fusanori Iwasaki, and Keita Oikawa
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
In this study, economic shocks on six selected Association of Southeast Asian Nations (ASEAN) Member States (i.e. Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam) are analysed in three dimensions: global, domestic, and uncertainty. Annual actual and prediction values from 1990–2021 macroeconomic indicators – from international organisations such as the Asian Development Bank – were collected, and macroeconomic shocks were calculated based on prediction errors (i.e. actual values minus prediction values). The first finding is that if prediction errors of the real gross domestic product (GDP) growth rates are negative, on average, the countries were significantly subjected to negative economic shocks that were not anticipated. Second, according to a correlation analysis of the actual values and prediction errors of real GDP growth rates, economic fluctuations and shocks are highly synchronised within the countries as well as with the world, as previous literature has indicated. Finally, by conducting regression analyses regarding the prediction error of real GDP growth rates separately for each country, (i) variations of the global real GDP growth rate are positively associated with countries’ economic shocks; (ii) the previous estimates have different quantitative significance amongst the countries; (iii) residual variations approximate country-specific, domestic shocks; and (iv) global and country-level uncertainty indices are correlated with negative economic shocks in some countries. Based on this dataset, the effect of the COVID-19 pandemic is also reviewed, and economic and historical backgrounds are examined that caused past economic shocks to these ASEAN Member States.
Topic:
Economics, Regional Cooperation, Macroeconomics, and Economic Cooperation
Political Geography:
Asia and ASEAN

128. COVID-19, Telework Patterns Within a City, and Changes in Urban Structure – Preliminary Findings

Author:
Ikumo Isono and Kazuhiro Nara
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
With the coronavirus disease (COVID-19, the spread of teleworking means that people do not necessarily have to live near their place of work. Will the role of cities change in this case? Teleworking patterns within a city matter. According to data from the Tokyo metropolitan area, people who live in a particular part of the city or work in the city centre are more likely to telework. Areas with a higher proportion of managers and professionals have higher rates of telework. Those who can telework may move from central Tokyo to other parts of the country, but the destination is mainly the outskirts of Tokyo. In the suburban areas, there was a positive correlation between the rate of increase in the number of migrants from the 23 wards of Tokyo and the teleworking rate. It is reasonable to assume that areas offering a good living environment are unevenly distributed, that the telework rate is high in these areas, and that the number of migrants is increasing in these areas. The government’s story that more people will move to rural areas as a result of widespread telework may not be so simple.
Topic:
Labor Policies, Pandemic, COVID-19, and Remote Work
Political Geography:
Japan and Asia

129. Entry Mode Choice and Performance of Foreign Direct Investment Firms in Emerging Economies: Micro-evidence from Viet Nam

Author:
Linh Bui, Huyen Hoang, and Hang Bui
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Does the right entry mode choice help foreign direct investment (FDI) firms to perform efficiently in emerging economies? This study attempts to answer this question by examining the impact of the entry mode choice made by FDI firms on their post-entry performance in emerging markets. Using a dataset derived from specific firms for the period 2002–2016, this study accounts for the selection biases and inherent differences of FDI firms that affect their selection of entry strategies. The study found that, with regard to the manufacturing sector, the ownership type with a wholly owned subsidiary (WOS) had negative impacts on either the technical efficiency or the total factor productivity (TFP) of firms. Conversely, regarding all sectors in the economy, the WOS is likely to have a positive role on technical efficiency and TFP. It is also interesting to see that for firms with an equity joint venture (EJV) type, the higher proportion of capital contribution from domestic firms might lead to lower technical efficiency and TFP. It implies that the higher degree of management and control by the domestic firms compared with foreign firms would have negative impacts on the EJV firms’ performance.
Topic:
Economics, Foreign Aid, Foreign Direct Investment, and Emerging Powers
Political Geography:
Asia and Vietnam

130. Projecting Infrastructure Needs and the Financing Mechanism: A Review of Estimations by ADB, McKinsey, and the OECD

Author:
Fauziah Zen and Michael Regan
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
How much does a country, a region, and the world need to spend on infrastructure development to fulfil demand? This question has been asked frequently because governments try to see it as a reference for budget allocation and evaluation of development progress. Since infrastructure consists of a wide range of types, qualities, and sizes, it is difficult to come up with a number that represents these variants. Several widely cited attempts have been made to provide estimations of infrastructure needs. This paper aims to assess the features, scope, methods, and suggested financing mechanism of the projections made by the Asian Development Bank (2017), the Organisation for Economic Co-operation and Development (2017), and the McKinsey Global Institute (2016). It is not meant to focus on the limitations of these projections, but to understand the process used to put these estimates together and the extent to which they provide comparative information.
Topic:
Development, Economics, Emerging Markets, and Infrastructure
Political Geography:
Asia and ASEAN

131. Implicit Subsidies for Infrastructure and Their Implications for Contingent Liabilities in Selected East Asian Countries

Author:
Astrid Dita and Sandy Maulana
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
A government's investment decision for infrastructure development is a form of budget commitment which results in direct liabilities and possible contingent liabilities. The latter is often overlooked when the project preparation is weak where potential risks are insufficiently identified and mitigated and its impact on budget sustainability may worsen in the absence of sound surveillance. Infrastructure projects may thus lead to unmitigated fiscal risk without proper investment decision-making and monitoring framework particularly in the presence of less-than-mature fiscal systems and low public investment management capacity (e.g. as demonstrated by the inability to develop sound project business cases or distinguish project financing from funding issues).
Topic:
Development, Infrastructure, Governance, and Investment
Political Geography:
Asia and ASEAN

132. COVID-19, Long-Term Care, and Migration in Asia

Author:
Azusa Sato and Helen Dempster
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Countries throughout Asia are experiencing rapidly aging populations and increasing life expectancy, leading to a large and growing demand for long-term care (LTC) services. Despite the shift to providing care within communities and at home, governments are struggling to provide enough LTC to meet demand. A large part of the constraint is the lack of available workers. While many countries in the region have migration schemes to bring in LTC workers, they are insufficient. At the same time, the COVID-19 pandemic has had an outsized impact on older people throughout the region, and has exposed deficiencies in the structure of migrant care labor. This report explores the impact of these three dynamics—LTC, migration, and COVID-19—on the current and future LTC workforce in the Asian region. It showcases 11 countries of origin and destination, including the demand for and supply of LTC, how it is financed and resourced, and where and how migrant workers are sourced. It puts forward recommendations for how governments throughout Asia can ethically and sustainably increase LTC worker migration; improve wages, working conditions, and recruitment processes within the sector; and learn lessons from COVID-19.
Topic:
Migration, Labor Issues, Pandemic, and COVID-19
Political Geography:
Asia

133. Beyond India’s Lockdown: PMGKY Benefits During the COVID-19 Crisis and the State of Digital Payments

Author:
Alan Gelb, Anurodh Giri, Anit Mukherjee, Ritesh Rautela, Mitul Thapliyal, and Brian Webster
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
India imposed a lock-down in response to the COVID-19 pandemic in March 2020 and began a gradual re-opening in June. A telephonic survey in April examined the early effectiveness of information and the massive PMGKY social protection program (Policy Paper 217). This paper analyzes a second-round survey, conducted six months later. Logistical and information constraints had relaxed, and incomes and jobs had begun to stabilize for some. There were not strong indications of differential access to benefits by income or location, but constraints to providing public employment had tightened in the face of increased demand, resulting in greater job rationing. Men made more use of digital channels, with a clear smartphone ownership hierarchy between men and women; this divide carried over into the growing autonomous use of digital payments which is conditioned on access to smartphones. Survey results confirm strong local agglomeration effects in digital payments, mirroring the general pattern with higher use in states hosting India’s major technology hubs. At the same time, trust-based concerns reduced the use of assisted digital cash-outs through agents.
Topic:
Economics, Pandemic, COVID-19, and Digitalization
Political Geography:
India and Asia

134. East Asian Cities: Past Development and Onrushing Challenges

Author:
Shahid Yusuf
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The East Asian export-led development model has served as a beacon for decades. For the many urbanized and rapidly urbanizing countries, the East Asian experience with and response to emerging challenges can be equally instructive. High-income East Asian economies are at or approaching peak urbanization. China is likely to catch up within the next three decades. Since the 1950s, urbanization was accelerated by industrialization, which provided a plenitude of jobs directly and indirectly. It generated the resources that helped build urban infrastructure and housing, financed essential services, and created modern, urban livability. However, East Asian cities, like cities in other high- and middle-income countries, face new challenges. Services are displacing manufacturing as growth drivers and providers of jobs; the absorption of digital technologies, urban greening, and control of pollution/carbon emissions is more urgent; climate change is necessitating the upgrading of services and infrastructure to enhance resilience; climate change will also compel a managed withdrawal from some urban locations; and both services and physical facilities must adapt to meet the needs of aging populations. Responding to these challenges calls for strategic long-range planning, technological advances, implementation capacity, and resource mobilization. By 2050, 70 percent of the global population will live in cities. Therefore, how East Asians tackle these challenges can inform and guide policymakers in developed and developing countries alike.
Topic:
Development, Infrastructure, Urbanization, and Urban
Political Geography:
East Asia and Asia

135. Building a Quad-South Korea Partnership for Climate Action

Author:
Kristi Govella
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
Climate change is a pressing global problem that requires action at the local, national, and international levels. While most policy has logically focused on creating international pacts to address and mitigate climate change, interest in regional or minilateral cooperation among smaller groups of countries has also grown in recent years. When the Quadrilateral Security Dialogue—more commonly known as the Quad—convened its first leader-level summit in March 2021, its member countries Australia, India, Japan, and the United States identified climate change as a priority for the grouping and for the Indo-Pacific. They established a Quad Climate Working Group to strengthen implementation of the Paris Agreement and to cooperate on climate mitigation, adaptation, resilience, technology, capacity building, and finance.1 Since then, the Quad has continued to expand its climate activities. In September 2021, the grouping added the formation of a green-shipping network and the establishment of a clean-hydrogen partnership to its goals.2 In May 2022, the four partners took the additional step of launching the Quad Climate Change Adaptation and Mitigation Package (Q-CHAMP).3 Why have the Quad countries decided to include climate change on their agenda? They share serious concerns about climate change, which poses a significant threat to themselves and to the Indo-Pacific as a whole. In recent years, climate change has risen in prominence on the domestic political agendas of the four Quad partners, and there are gains to be achieved through coordination and cooperation of their separate national efforts. At a time when many countries feel that international institutions simply are not working quickly or effectively enough, minilateral initiatives such as the Quad have gained appeal as a more flexible way to facilitate joint action.
Topic:
Foreign Policy, Climate Change, Partnerships, Quad Alliance, and Defense Cooperation
Political Geography:
Asia, South Korea, United States of America, and Indo-Pacific

136. Embedding Human Rights in European and US China Policy

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

137. Next-generation Perspectives on Taiwan

Author:
Bonnie S. Glaser
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
Over the past few years, Taiwan has received a surge of international attention. As the coronavirus pandemic began to spread worldwide in 2020, Taiwan emerged as a success story with relatively low numbers of cases and deaths. In the global battle against the virus, it provided medical supplies, medicine, and technology to countries in need, cooperated on vaccine research and development, and shared its best practices. The pandemic’s impact on global semiconductor supply chains also led to heightened interest in Taiwan, which dominates the foundry market, or the outsourcing of semiconductor manufacturing. The island is home to the Taiwan Semiconductor Manufacturing Company, which produces more than 90 percent of global output of the most advanced semiconductors and is gearing up to launch next-generation three-nanometer chips this year. Another reason for increased attention to Taiwan stems from international awareness of China’s growing diplomatic and military pressure on the island. Since President Tsai Ing-wen assumed office in 2016, Beijing has poached eight of Taiwan’s diplomatic allies and blocked it from participating in international organizations, including the World Health Organization. The Chinese military flew nearly 1,000 warplanes in Taiwan’s air-defense identification zone in 2021. China has also stepped up its use of disinformation, United Front tactics, and other measures to widen splits within Taiwan’s political system and induce pessimism among its people about their future to achieve its goal of taking over the island. With the upswing of global interest in Taiwan, there is a pressing need for greater knowledge about the many factors that make it so crucial to the world. The Taiwan-US Policy Program (TUPP) was launched in 2017 to provide future leaders a deeper understanding of Taiwan and its relations with the United States through meetings with officials and experts in Washington, 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, their writing, and their overall worldview. It imbues them with an appreciation for Taiwan’s experience 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 the preservation of peace and stability in the Taiwan Strait. After a two-year hiatus due to the coronavirus pandemic, TUPP resumed in January 2022 for a virtual session. Although holding virtual meetings with officials and experts from Taiwan and the United States was not ideal, the program was nonetheless successful in achieving its goals. Each participant gained insights into Taiwan and its role in their respective fields. This year’s cohort also included for the first time a few experts from Europe, expanding the program’s reach. Over time, TUPP seeks to create a body of global experts with knowledge about Taiwan and support for sustaining and expanding its ties to the world. Hopefully, TUPP will contribute to ensuring that Taiwan remains peaceful and prosperous. The contributions here, written by nine of the eleven members of the 2022 TUPP delegation, underscore the importance of deeper study and understanding of Taiwan. I sincerely hope that they stimulate even greater global interest in Taiwan and its future.
Topic:
Foreign Policy, European Union, COVID-19, and Defense Cooperation
Political Geography:
China, Taiwan, Asia, and United States of America

138. Expanding Engagement among South Korea and the Quad Countries in the Indo-Pacific

Author:
Kristi Govella, Garima Mohan, and Bonnie S. Glaser
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
Since its revival in 2017, the quadrilateral dialogue among Australia, India, Japan, and the United States known as the “Quad” has become a stronger, more institutionalized grouping with a broad and growing agenda. As a leading economy, a vibrant democracy, and a key US strategic ally, South Korea stands out as one of the most promising potential partners for the Quad. With a new administration in office in Seoul, the time is ripe for South Korea to expand its engagement with the Quad countries in the Indo-Pacific. Even without formally expanding the membership of the Quad, which is currently not under consideration by its members, there are pragmatic and effective ways for these five countries to pursue their shared interests and values through a flexible set of mechanisms across a wide variety of crucial issues. After a brief review of the debates about the Quad in South Korea, this paper presents a framework for the country to consult, coordinate, and cooperate with Quad members through distinct institutional pathways: bilateral mechanisms, sub-Quad minilateral mechanisms, issue-specific engagement to achieve a specific functional goal, and more formal Quad Plus engagement on a broad strategic level. The paper offers the following recommendations for South Korea and the Quad countries to deepen their engagement in eight areas that correspond with Quad working groups and activities: critical and emerging technologies, infrastructure, health, climate change, education and people-to-people exchange, maritime safety and security, cybersecurity, and outer space.
Topic:
Foreign Policy, Quad Alliance, and Defense Cooperation
Political Geography:
Asia, South Korea, and Indo-Pacific

139. Six Lessons from a Decade of Asia Strategy Simulations

Author:
Zack Cooper
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
How can the United States and its allies and partners succeed in the Indo-Pacific and better prepare for long-term competition in the region? Since the US rebalance to Asia began, the German Marshall Fund of the United States has brought together rising experts from Asia, Europe, and the United States to examine this question through a series of workshops and simulations conducted via the Young Strategists Forum (YSF). The discussions that have taken place during these sessions suggest six lessons about effective long-term strategies for the Indo-Pacific. First, trying to maintain the status quo is neither realistic nor strategic. Established powers tend to describe their objectives in terms of maintaining the status quo. This aim is not just unrealistic, but often deprives them of the ability to adjust the existing order in potentially beneficial ways. US leaders must present a vision of the future that is defined by looking forward not backward. Second, the United States needs to calibrate its responses to near-term crises with an eye to mobilizing the largest possible balancing coalition in the long run. In the simulations, US teams often miss short-term opportunities that could yield long-term benefits. Thinking strategically sometimes means allowing other countries to recognize that they face a serious threat today and cannot simply rely on the United States to solve problems. Third, overreaching by China presents opportunities for the United States. Over the last decade, China’s growth in power has been accompanied by increased assertiveness, in YSF simulations and in real life. China’s behavior creates opportunities for US and other leaders to create and expand coalitions that can push back against it. Fourth, acknowledging the reality of impending multipolarity in the Indo-Pacific can benefit the United States. US experts, including participants in YSF simulations, often tend to see the competition in the Indo-Pacific as largely bipolar between the United States and China. Regional actors, however, typically regard the Indo-Pacific as increasingly multipolar. By championing the rise of new power centers, the United States can foster a regional order that is broadly supportive of its interests yet less dependent on US guarantees. Fifth, focusing on “swinging” states as well as “swung” states pays dividends for the United States. Over the last five years, the United States has done an impressive job of bringing together those countries that are most willing to push back against China. But the region’s “swinging” states—those that have not yet made a clear alignment decision—deserve more attention. Quick wins with these actors are unlikely, but sustained engagement today can set the stage for realignment tomorrow. Finally, building robust coalitions requires US leadership. Many of the lessons we have learned over the last decade have to do with the importance of recognizing that other countries have greater capacity for independent action than is often acknowledged by US observers. That does not mean that US leadership is unimportant—in fact, YSF simulations suggest that it is critical if other states are to join coalitions to push back against China. The United States often labels its various allies as “lynchpins” or “keystones” in the region, but the fact remains that the most effective regional groupings are still reliant on its coordinating role, especially when it comes to China.
Topic:
Foreign Policy, Strategic Planning, Simulation, and Defense Cooperation
Political Geography:
China, Asia, and United States of America

140. The Future of the Quad and the Emerging Architecture in the Indo-Pacific

Author:
Garima Mohan and Kristi Govella
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
The Quadrilateral grouping of Australia, India, Japan, and the United States (the Quad) has come a long way from its origins, establishing itself as a crucial pillar of the Indo-Pacific regional architecture and significantly shifting in tone and focus from its early iterations. Since its revival in 2017, the Quad has been elevated to a leader-level dialogue, it has begun issuing joint statements, and it has developed a new working-group structure to facilitate cooperation. It has also significantly broadened and deepened its agenda to include vaccines, climate change, critical and emerging technologies, infrastructure, cyber, and space. These recent changes to the Quad raise several questions about its future trajectory. What are the drivers of engagement, the domestic support, and the bureaucratic capacity in the four countries to continue investing in the Quad? How well does the Quad’s new working-group structure function, and will the working groups be able to deliver tangible results? How has the Quad’s agenda evolved, and will it return to its initial focus on security challenges? Are the Quad countries open to cooperation with additional countries and, if so, what form will this take? This paper analyzes these questions drawing on recent publications, official statements, and interviews with key experts and policymakers in the four countries. In doing so, it offers five key takeaways into the Quad as an evolving part of the Indo-Pacific architecture, as well as a vehicle for achieving the goals of its four member countries.
Topic:
Foreign Policy, Quad Alliance, and Defense Cooperation
Political Geography:
Japan, India, Asia, Australia, United States of America, and Indo-Pacific

141. "Best and Bosom Friends" Putin, Xi and the Challenge to the West

Author:
Michael Cox
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
LSE IDEAS
Abstract:
In this latest Strategic Update, LSE IDEAS co-founder Professor Michael Cox highlights China as a significant player in the current tragedy occurring within Ukraine. Prof Cox traces the relationship between the People’s Republic and the USSR, through to the latter’s collapse into the Russian Federation, their formation of a strategic partnership against a unipolar post-Cold War order, and the rise in power of Xi Jinping alongside two international crises caused by Russian aggression in Ukraine. This Update finds that, whilst there are limits to their shared interests, China is politically committed to its Russian partner, and this status-quo leaves us in a more dangerous world.
Topic:
Foreign Policy, Partnerships, Xi Jinping, Vladimir Putin, and Russia-Ukraine War
Political Geography:
Russia, China, and Asia

142. China’s Digital Silk Road in Indonesia: Progress and implications

Author:
Zulfikar Rakhmat
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
LSE IDEAS
Abstract:
This Strategic Update discusses the progress of China’s Digital Silk Road in Indonesia, a major destination, in both its hard and soft aspects, as well as the potential impact of its implementation. Chinese companies are offering a response to Indonesia’s needs, but concerns exist, especially surrounding security and surveillance, that Indonesia’s increasing reliance on China could also further erode its democracy.
Topic:
Security, Foreign Policy, Economy, Surveillance, and Belt and Road Initiative (BRI)
Political Geography:
China, Indonesia, Asia, and Indo-Pacific

143. What Putin’s War in Ukraine Means for the Future of China-Russia Relations

Author:
Björn Alexander Düben
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
LSE IDEAS
Abstract:
Björn Alexander Düben analyses China’s reaction to, and motivation in implicitly supporting, Russia’s invasion of Ukraine, even as Putin’s strategic blunder becomes increasingly difficult to deal with. The author finds that, as long as Putin remains in power, long-term alignment since 2014 and a shared authoritarian world-view will cement closer ties between the PRC and Russian Federation; this at the cost of the latter devolving to a client-state dependent on China to keep its economy afloat, whilst the PRC’s cautious state banks further diminish Russian hopes of financial cooperation in order to avoid secondary sanctions from the West.
Topic:
Bilateral Relations, Sanctions, Authoritarianism, Economy, Vladimir Putin, and Russia-Ukraine War
Political Geography:
Russia, China, Ukraine, and Asia

144. Decoding China’s “Common Prosperity” Drive

Author:
Xin Sun
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
LSE IDEAS
Abstract:
The term “common prosperity” has quickly risen to prominence in Chinese domestic politics amid an intense regulatory crackdown on China’s leading tech companies. However, this new policy agenda offers no clear road map or explicit policy instructions, giving way to various interpretations which while insightful do not depict the complete picture. In this strategic update, Xin Sun argues that the fundamental purpose of common prosperity is to support a new political order that keeps significant power in the hands of Xi and his closest allies and bolsters the supreme leader’s political survival in the coming decades.
Topic:
Regulation, Business, Domestic Policy, and Prosperity
Political Geography:
China and Asia

145. Microchips and Semiconductors: The U.S. Seeks Autonomy

Author:
Andrzej Dąbrowski
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs
Abstract:
The United States has turned to support of the domestic microchip industry in response to the increased risk of Chinese aggression against Taiwan, one of the leading producers, as well as to address disruptions in supply chains caused by the COVID-19 pandemic. A law on this passed with bipartisan consent and is intended to help finance a more resilient American sector towards global changes in manufacturing these components. Thanks to the CHIPS Act, the U.S. can reduce its dependence on microchip imports and undermine China’s ability to dominate the market.
Topic:
Markets, Science and Technology, Autonomy, Industry, Supply Chains, Semiconductors, and Microchips
Political Geography:
China, Asia, North America, and United States of America

146. North Korea Continues to Develop Its Nuclear Forces

Author:
Oskar Pietrewicz
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs
Abstract:
North Korea is conducting further missile tests to check new types of weapons and increase the credibility of its nuclear deterrence. The adoption of a new nuclear doctrine that allows pre-emptive nuclear strikes also serves this purpose. North Korea is taking advantage of the period of tension between the U.S., Russia, and China, which prevent the UN Security Council from adopting further sanctions. In this situation, the U.S. and its allies should strengthen defence and deterrence capabilities against North Korea and set achievable goals to reduce the risk of escalation of tensions before possible negotiations.
Topic:
Defense Policy, Nuclear Weapons, Sanctions, and Deterrence
Political Geography:
Asia and North Korea

147. Japan Focuses Policy on Economic Security

Author:
Oskar Pietrewicz
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs
Abstract:
Japan is stepping up efforts to increase its economic security. In August, some new regulations came into force aimed at strengthening, among others, the resilience of supply chains and developing technological potential. Japan is thus responding to the challenges of China’s policy, the U.S.-China rivalry, and global technological progress. Improving economic security will require the government to cooperate with both Japanese business and international partners, including the U.S. and the EU.
Topic:
Science and Technology, Regulation, Supply Chains, and Economic Security
Political Geography:
Japan, China, and Asia

148. China Tightens Policy towards Taiwan

Author:
Marcin Przychodniak
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs
Abstract:
China treated the visit of Speaker of the House of Representatives Nancy Pelosi to Taiwan at the beginning of August as an expression of U.S. efforts to change the status quo in the region. The reaction of the Chinese authorities was calculated as a controlled escalation of tensions in the Taiwan Strait, but without the risk of direct military confrontation. Harsh rhetoric, military exercises around the island, and the limitation of dialogue with the U.S. confirmed the intention of China to take over Taiwan in the coming years. For the EU, this means the need to intensify support for Taiwan, including the development of political and economic contacts.
Topic:
Foreign Policy, Territorial Disputes, and Geopolitics
Political Geography:
China, Taiwan, and Asia

149. Inside China’s Techno-Security State

Author:
Tai Ming Cheung
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:
Since coming to power, Xi Jinping has significantly elevated the importance of national security and technological innovation in the country’s overall priorities. He has invested considerable time, effort, and political capital to establish an expansive techno-security state based upon his strategic and ideological vision. This brief examines the five major methods Xi’s administration has undertaken to develop its techno-security state: developing a national security state, innovation-driven development, military strengthening, military-civilian fusion, and economic securitization.
Topic:
Security, Defense Policy, Diplomacy, Industrial Policy, International Security, Innovation, Strategic Competition, and Regional Security
Political Geography:
China, Asia, and Indo-Pacific

150. Digitalisation for Sustainable Infrastructure: The Road Ahead

Author:
Carlo Secchi and Alessandro Gili
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
In today’s tumultuous and fast-changing times, digitalisation and technology are game changers in a wide range of sectors and have a tremendous impact on infrastructure. Roads, railways, electricity grids, aviation, and maritime transport are deeply affected by the digital and technological transition, with gains in terms of competitiveness, cost-reduction, and safety. Digitalisation is also a key tool for fostering global commitment towards sustainability, but the race for digital infrastructure is also a geopolitical one. As the world’s largest economies are starting to adopt competitive strategies, a level playing field appears far from being agreed upon. Why are digitalisation and technology the core domains of global geopolitical competition? How are they changing the way infrastructure is built, operated, and maintained? To what extent will road, rail, air, and maritime transport change by virtue of digitalisation, artificial intelligence, and the Internet of Things? How to enhance cyber protection for critical infrastructure? What are the EU’s, US’ and China's digital strategies?
Topic:
Science and Technology, Infrastructure, European Union, Sustainability, and Digitalization
Political Geography:
China, Europe, Asia, North America, and United States of America