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151. China's Course to Carbon Neutrality

Author:
Cory Combs
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
China is in the midst of a wholesale economic transformation, driven by the central government’s pursuit of sustainability in all its forms: economic, social, and environmental. At the heart of this transformation sit Xi Jinping’s “dual carbon” targets: one to peak emissions before 2030, and the other to achieve carbon neutrality before 2060. However, such straightforward guiding targets belie the monumental complexity of unraveling and then rebuilding the fossil fuel–driven economy that enabled China’s rapid rise as a global economic power. The difficulties of moving China’s economy up the value chain – particularly from low-grade, emissions-intensive industrial manufacturing toward high value-add, green and low-carbon production – are compounded by the immense political frictions posed by entrenched interests and bureaucratic inertia. In this context, it is imperative for observers – particularly those keen on engaging with China during its grand green transformation experiment – to understand the many pieces, players, and problems involved. To this end, this report takes stock of China’s planning and reform efforts across the domains of climate, energy, and industrial upgrading since the 14th Five-Year Plan (2021–2025) was adopted. It then assesses the key drivers and constraints shaping these efforts, with the aim of elucidating the most likely path ahead – even as Beijing itself continues to map it out.
Topic:
Climate Change, Environment, Economy, Sustainability, and Carbon Emissions
Political Geography:
China and Asia

152. China’s 20th Party Congress Leadership Reshuffle: Stasis or Sweep?

Author:
Christopher K Johnson
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
President and Chinese Communist Party (CCP) General Secretary Xi Jinping successfully thwarted another “Twitter coup” in late September 2022, making clear he will remain China’s top leader for at least the next five years. But there is much less certainty about who else will make up the new leadership team at the 20th Party Congress that will assist Xi in guiding the country through its most challenging period in decades. There are virtually no hard rules in CCP politicking limiting the range of possible outcomes, and even the “norms” that are often cited as governing the process of choosing a new leadership lineup are, at best, loose conventions rather than predictable practices. Xi’s extreme centralization of power also means that China’s already deeply opaque political system is even more so, and more than two and a half years of COVID isolation for China has made it much more challenging to glean authoritative insights. Nevertheless, one still gets a very clear sense that the personnel arrangements for the party congress are largely in hand, and that Xi Jinping is firmly in command and very comfortable with them. If we accept that as the baseline, it is possible to deduce the most likely scenarios for personnel turnover at the apex of CCP power and decision-making, the Politburo Standing Committee (PBSC). As with so many things in Xi Jinping’s unique political universe, it seems that the outcome will probably be one of two fairly binary, and perhaps nearly equally likely, possibilities. The first, a “stasis” scenario, would see very little change to the PBSC as Xi either strictly adheres to the convention, followed since 2002, that officials 68 or older must retire, or largely abides by it except for some PBSC incumbents, most probably Premier Li Keqiang, who may step down even though he is 67. In the second “sweep” scenario, Xi could adjust the age criteria downward or just outright ignore it, creating a lot more room for new entrants to the PBSC.
Topic:
Leadership, Domestic Politics, Political Parties, Xi Jinping, and Chinese Communist Party (CCP)
Political Geography:
China and Asia

153. China’s National ETS and the Power Market: How the ETS Can Achieve Significant Emission Reductions

Author:
Yan Qin, Alistair Ritchie, and Yi Chen
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
China’s newly established national emissions trading system (ETS) is intended to serve as the primary tool in assisting China in meeting its "dual carbon" target of CO2 peaking before 2030 and carbon neutrality by 2060. It is the largest ETS globally, accounting for 40 percent of China's CO2 emissions and more than 10 percent of worldwide emissions, with the potential to double its current size once industrial sectors are added. In its initial phase, it covers the power sector, particularly more than 2,000 enterprises operating coal- and gas-fired power stations. However, some critical challenges need to be overcome before the ETS can fulfill its emissions reduction potential in the power sector by driving fuel switching away from coal and toward renewables and low-carbon fuels through the carbon price. China's National ETS and The Power Market: How the ETS Can Achieve Significant Emission Reductions examines these challenges in relation to both the ETS itself and its interactions with the power market. It also proposes a policy pathway to address these challenges and unlock their potential to drive significant and cost-effective CO2 emissions reductions in the power sector and raise large amounts of revenue to fund the transition to carbon neutrality across the expanding ETS sectors.
Topic:
Climate Change, Markets, Carbon Emissions, and Energy
Political Geography:
China and Asia

154. The EU’s Proposed Carbon Border Adjustment Mechanism and Its Implications for Asia

Author:
Hubert Fallmann, Alistair Ritchie, and Yi Chen
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
To achieve a climate-neutral European Union (EU) by 2050 in line with the Paris Agreement, the EU needs to more ambitiously reduce greenhouse gas (GHG) emissions in the coming decade and update its climate and energy policy framework. The recently adopted European Climate Law sets a new EU target for 2030 of reducing GHG emissions by at least 55 percent compared to 1990 levels. To deliver this, the European Commission has proposed a “Fit for 55” package containing, among other initiatives, legislative proposals for a revision of the EU Emissions Trading System (EU ETS) with a more stringent emissions cap and a Carbon Border Adjustment Mechanism (CBAM). The CBAM will put a carbon price on imports of a targeted selection of goods with the aim of 1). ensuring that ambitious climate action in the EU does not lead to carbon leakage, and 2). encouraging partner countries to implement similar carbon-pricing policies. This policy, even at its proposal stage, has created a significant impact worldwide in supporting the uptake of carbon-pricing policies and in encouraging consideration of similar carbon border adjustment policies. The EU’s Proposed Carbon Border Adjustment Mechanism (CBAM) and Its Implications for Asia investigates the details of the EU’s proposed CBAM and its specific implications for companies and governments in Asia.
Topic:
Climate Change, Energy Policy, European Union, and Carbon Emissions
Political Geography:
Europe and Asia

155. Chinese Cyber Nationalism During the Pandemic: A Discourse Analysis of Zhihu

Author:
Talkeetna Saiget
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Pacific Forum
Abstract:
The COVID-19 global pandemic has elicited a rise in cyber nationalism in China, as the world’s most populous nation outperformed the “scientifically” advanced western nations in the handling of the crisis. Chinese netizens on social messaging platform Zhihu cite upsurging cases of COVID-19 and death tolls in western countries as evidence of China’s zero-COVID strategy success, and have generated a new trend of Chinese cyber nationalism. Within this new trend, positive perceptions of western countries and their ideologies declined greatly. As previous studies have predicted, Chinese netizens are becoming more and more disappointed in western countries and “have no choice but to side with China.” This has also prompted China to be more confident in challenging the global narrative and seeking to guide the international order on COVID-related issues amid the China-US rivalry and thus facilitating a strong emotion of “China against the West.” However, this strong surge of emotion does not accurately translate into support of Chinese President Xi Jinping’s zero-COVID-19 policy.
Topic:
Nationalism, COVID-19, Cyberspace, and Zero-COVID
Political Geography:
China and Asia

156. US-Taiwan Deterrence and Defense Dialogue: Responding to Increased Chinese Aggressiveness

Author:
Jeffrey Ordaniel
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Pacific Forum
Abstract:
Taiwan is already under attack by the People’s Republic of China (PRC) politically, economically, psychologically, and militarily—the latter through more aggressive Chinese People’s Liberation Army (PLA) gray zone military operations short of actual direct conflict. This multidimensional threat requires a multidimensional response in ways that complement and enhance military deterrence. PRC behavior represents a global problem that demands a global response. PRC pressure on Taiwan has increased considerably over the past year, even before Beijing used the visit by House Speaker Nancy Pelosi as an excuse to further ramp up pressure. The August 2022 PLA military exercise around Taiwan appears aimed at further creating a “new normal” that could reduce warning times should Beijing invade. However, such PRC actions are not “normal.” They are unilateral, destabilizing, and, in some instances, illegal changes to the status quo. Such Chinese pressure tactics, combined with the “wake up call” provided by the Russian invasion of Ukraine, have sensitized the citizens and governments of Taiwan, the United States, and the international community to the growing possibility—if not probability—of a PRC invasion and have increased public perceptions about the need and willingness to defend Taiwan democracy. The PRC’s nuclear build-up is also a great cause of concern. This concern is driven not by the threat of nuclear war (given US nuclear superiority) but by the possibility of nuclear blackmail aimed at discouraging Washington from getting involved in a Taiwan confrontation. Taiwanese are concerned about crisis escalation (especially to the nuclear level) but worry more about the PRC deterring the United States. The United States, working closely with allies and other like-minded states, should be more proactive and less reactive in responding to increased PRC aggressive behavior. With the US Department of Defense (DoD) in the lead, the US Government needs to better assess Chinese strengths and weaknesses vis-à-vis Taiwan with an eye toward countering strengths and exploiting weaknesses, while also examining ways to broaden the challenge along multiple fronts in cooperation with various allies and partners. Think tanks can and should supplement this analysis. While continued strong support for Ukraine is important to demonstrate Western resolve and prevent more Russian territorial gains, the PRC remains the “pacing threat” and thus should remain the focus of US national security policy and defense procurement strategy.
Topic:
Defense Policy, Diplomacy, Deterrence, Dialogue, and Regional Security
Political Geography:
China, Taiwan, Asia, and United States of America

157. Partnerships for Policy Transfer: How Brazil and China Engage in Triangular Cooperation with the United Nations

Author:
Laura Trajber Waisbich and Sebastian Haug
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
This paper offers a comparative analysis of Brazilian and Chinese partnerships with the United Nations (UN) as a mechanism and channel for policy transfer. In international policy travel flows, China and Brazil currently hold privileged places as hubs from which development-related policies travel and through which they circulate. Both countries have invested in systematising their development experience and transferring development policies within their regions and beyond – often through triangular cooperation, i.e. South–South cooperation supported by third actors such as UN entities. So far, however, this variegated engagement has remained under the radar of scholarly attention. To address this gap, we examine 35 policy transfer partnerships – 17 for Brazil and 18 for China – forged with different parts of the UN system over the last two decades. In order to offer a first systematic account of partnership trajectories, we provide an overview of partnership types (namely projects, programmes and policy centres) and transfer dimensions (including the policies themselves, transfer agents and governance arrangements). Our comparative mapping presents an evolving landscape: while Brazil was first in institutionalising robust policy transfer partnerships with numerous UN entities and then slowed down, China started more cautiously but has significantly expanded its collaboration with the UN system since 2015. The partnerships analysed cover a substantial range of sectors, with a particular focus – for both Brazil and China – on agricultural policies. While Brazilian partnerships with the UN primarily engage with linkages between agriculture and social protection, however, China–UN partnerships focus more on productivity and market linkages. As the first comprehensive mapping and comparative analysis of Brazilian and Chinese policy transfer partnerships with the UN, this paper contributes to a better understanding of (triangular) cooperation schemes between international organisations and their member states, as well as debates about how policies deemed as successful travel around the globe.
Topic:
Development, International Cooperation, United Nations, and Partnerships
Political Geography:
China, Asia, Brazil, and South America

158. How Does Urban Rail Development in China and India Enable Technological Upgrading?

Author:
Emmanuel Theodore Asimeng and Tilman Altenburg
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The socioeconomic wellbeing of urban areas depends on a well-functioning transportation system that makes it easier for people to access goods and services. Whereas most urban areas in emerging economies are expanding in size and human population, high motorisation and inadequate public transport services have resulted in congestion, traffic accidents and increasing transport-related greenhouse gas (GHG) emissions. Urban rail development can help address the current transportation problem because trains can move a large number of people at high speed, provide reliable services, contribute to lower GHGs and have a low accident rate. However, urban rail is expensive and requires many technical and technological capabilities often unavailable in emerging economies because they are technology latecomers. This paper examines how two emerging economies, China and India, have adopted industrial policies to develop local capabilities for urban rail technology. The paper shows how the Chinese government has moved from purchasing urban rail technology from multinational companies (MNCs) to the current situation where it has developed local capabilities, owns rail technology patents and competes with the same MNCs on the international market. The paper also demonstrates how India is gradually improving the local manufacturing of rail subsystems as opposed to importation. Overall, the paper suggests a pathway to industrial policy adoption that demonstrates how emerging economies can catch up with urban rail technology development to address their local transportation needs.
Topic:
Development, Industrial Policy, Science and Technology, Multinational Corporations, Urban, and Railways
Political Geography:
China, India, and Asia

159. Green Jobs in Cities: Challenges and Opportunities in African and Asian Intermediary Cities

Author:
Wolfgang Scholz and Michael Fink
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Cities account for approximately 70 per cent of global energy consumption and about 75 per cent of greenhouse gas emissions due to the density of economic activities and infrastructure and their often path-dependent development patterns. Cities adopting a green transformation process can minimise their environmental impact and maximise opportunities to improve and support the natural environment. Topics to address are energy efficiency and reduction of non-renewable energy sources to reduce their carbon footprint; actively support waste reduction and management; establish green and resilient infrastructure; encourage nature-based solutions; enhance the efficiency of new buildings; encourage low-carbon transport; and improve water cycle management. Also, these fields will lead to a greener urban economy, create more green jobs – or respectively change jobs towards becoming green – and deliver improved quality of life outcomes for residents. The aim of this discussion paper is to address the challenges, opportunities and fields of actions – respectively interventions – of these economic, but also social transformations on the job market on the level of cities. The regional focus is on African and Asian cities in developing countries. A special focus is on intermediary cities with between 1 to 5 million inhabitants since they constitute the fastest-growing urban areas today and more importantly, they have both the capacity and expertise to guide an economic transformation while still being, at the same time, not too large to be managed effectively, as outlined above. The fields of action for cities in a transformation towards a green economy, thereby creating green jobs, can be clustered into: • land use planning • green buildings and construction • sustainable mobility and urban transport • green and blue urban infrastructure services with nature-based solutions (NBSs) as a cross-cutting issue • renewable energy and energy efficiency The employment effects of a transformation towards a green economy play an important role. The opportunities for cities in Africa and Asia to create green jobs under their own local mandates of decision-making in urban planning and within their own service providers, and/or to support the “greening” of the private sector, will obviously create more green jobs, and respectively shift current jobs into green jobs.
Topic:
Development, Cities, Carbon Emissions, Opportunity, Energy, and Green Jobs
Political Geography:
Africa and Asia

160. India’s Approach to Food Security Resilience Amid COVID-19: Relevance to ASEAN?

Author:
Jose M. L. Montesclaros
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
The International Monetary Fund recently lauded India’s feat of minimising the COVID-19 pandemic’s impacts on extreme poverty, owing to its food subsidy policies; in contrast, more than 4.7 million people fell into extreme poverty among ASEAN member states (AMS). This NTS Insight highlights relevant aspects of India’s food security approaches which allowed it to provide encompassing food subsidies amidst disruptions. It then assesses their relevance to AMS in facing future disruptions. India’s feat built on its digital identity and digital ration card systems, to minimise leakages in subsidised food. These are supported by India’s food procurement and distribution/stockpile management systems for achieving stockpile targets. Its government guarantees to purchase whatever crops farmers produce, at a pre-announced price. On surface, India’s feat seems to contradict AMS’ purely laissez-faire approach of leaving supply outcomes to the market. In reality, India’s farmers are able to sell their crops in open markets, and government guarantees only supplement the market, to ensure sufficient food stocks and reduce reliance on higher-priced imported crops. As such, it is worth exploring whether more can be done in improving AMS’ resilience amidst growing food supply chain instability, including strengthening systems for digital identity, distribution, stockpile management and procurement.
Topic:
Food Security, Pandemic, Resilience, and COVID-19
Political Geography:
Asia and ASEAN

161. Planetary Health: Reflections from Asia

Author:
Margareth Sembiring
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
Planetary Health is a concept that advocates the care of the planet for human own survivability. It underscores the health implications of environmental degradation brought about by human activities and development progress, and calls for a systemic approach that considers and addresses socio-environmental trade-offs of certain policy and/or economic objectives. In view of multiple crises that have been happening in recent years – from the COVID-19 pandemic to the war in Ukraine – which have further negatively affected the environment, understanding how Planetary Health can be applied to address continuing environmental decline is critical. Planetary Health is a relatively new term in Asia. Drawing from the discussions in the 6th NTS-Asia Consortium Annual Conference in April 2022, this NTS Insight maps the different ways Indonesia, India, Bangladesh, Japan, and China engage Planetary Health in their specific contexts. The interpretations of the concept are likely to influence the trajectory of its implementation.
Topic:
Health, International Cooperation, Recovery, Pandemic, and COVID-19
Political Geography:
Asia

162. Expanding the Peaceful Uses of Nuclear Technology and Climate Change Adaptation: Opportunities and Challenges

Author:
Julius Caesar Trajano
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
While ongoing debates on the critical role of nuclear power plants in achieving the goals established in the 2015 Paris Agreement remain unsettled, the peaceful applications of nuclear technology in climate change adaptation have been expanding in recent years. The peaceful uses of nuclear technology cannot be excluded from innovative approaches to addressing the world’s most pressing and complex challenge─ climate change. This NTS Insight examines how nuclear technology can be deployed to strengthen climate adaptation measures and presents case studies from several Southeast Asian countries that have nuclear research and scientific programmes. Nuclear technology is being utilised in adopting climate-smart agriculture, modernising water management, enhancing greenhouse gas emissions analysis, and combatting plastic pollution. This Insight offers agendas for action by Southeast Asian countries to address key challenges to expanding the role of nuclear technology in addressing climate change.
Topic:
Climate Change, Science and Technology, Nuclear Power, and Green Transition
Political Geography:
Asia

163. COVID-19 and the Health of Banking Sector in Japan and South Korea: A Comparative Study

Author:
Munim Kumar Barai
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The economies of Japan and South Korea are dominated by banks. Both countries have created a complex financial structure, including a well-established banking industry at their heart that supports economic operations. However, both countries’ banking sectors have previously faced crises such as the Asian Financial Crisis (mostly in South Korea), the Japanese economic slowdown, and the financial crisis of 2007-08 (both). While the Bank of Japan (BOJ) approved the quantitative easing (QE) monetary policy and lowered interest rates to manage the crises, the Bank of Korea (BOK) pursued interest and financial restructuring as well as banking system digitization to overcome the crises. Covid-19 has disrupted the normal operation of banks, and the central banks and governments of both countries have implemented a variety of monetary and other measures to mitigate its economic and financial consequences. This study aims to identify and assess the health of domestic banks in Japan and South Korea for the Covid-19 ex-ante and interim periods. Several important variables, i.e., portfolios of assets and liabilities, asset productivity, stockholders' equity, profitability, and operating efficiency, have been included to evaluate the health of their banks. This compari-son of health metrics for 2010 to 2020 could help identify changes or shifts in the banking sector of Japan and Korea. The study has used ex-ploratory and descriptive methodologies to undertake qualitative and quantitative evaluations of important bank health indicators in the ex-ante and interim periods of Covid-19. It also used a hybrid method to produce research goals and arguments, including a framework based on what was already known in the field.
Topic:
Financial Crisis, Economy, COVID-19, and Banking
Political Geography:
Japan, Asia, and South Korea

164. Modernizing the People's Liberation Army: The Human Factor

Author:
Marc Julienne and Constantin Lagraulet
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Institut français des relations internationales (IFRI)
Abstract:
The tremendous demographic challenges facing China will not significantly affect the People’s Liberation Army (PLA) in the immediate future, but will become more problematic in the medium and long term. The rapid aging of the population and the resulting socio-economic imbalances will put pressure on defense budgets, military wages and the general attractiveness of the army. For the time being, the PLA’s primary goal in terms of human resources is to build a less oversized, more professional army, prepared for high-intensity combat. This objective is in line with the institutional reform of 2016, which shortened the chain of command and strengthened the political and ideological control of the Communist Party of China (CPC) over the PLA through an overhaul of the Central Military Commission (CMC). This reform also involved a major restructuring of China’s armed forces. The PLA is pursuing a streamlining target that emphasizes quality over quantity. This qualitative improvement concerns equipment, forces and chains of command, and is driven by the need to elevate modernity, operational effectiveness and interoperability. An analysis of the evolution of the PLA Navy Marine Corps and the People’s Armed Police (PAP) demonstrates this qualitative upgrading trend and the prioritization of combat readiness. To integrate increasingly modern and complex equipment, the PLA is also focusing on recruiting and retaining young conscripts and volunteers with a high level of education, in order to increase the number of commissioned and non-commissioned officers. The major reforms being carried out thus aim to enhance the status of the military so as to strengthen its economic and social attractiveness. On the other hand, the PLA, like other armies around the world, is confronted with societal phenomena such as internet addiction, near-sightedness and obesity, which hinder its ambitions and force it to make trade-offs in its selection standards.
Topic:
Foreign Policy, Demographics, Modernization, Chinese Communist Party (CCP), and People's Liberation Army (PLA)
Political Geography:
China, Taiwan, East Asia, and Asia

165. “Open” Telecom Networks (Open RAN): Towards a Reconfiguration of International Competition in 5G?

Author:
Mathilde Velliet
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Institut français des relations internationales (IFRI)
Abstract:
In line with the anti-Huawei diplomatic campaign of the Trump and Biden administrations, the United States has promoted an alternative: Open RAN, a concept defined by "open" network architectures. At the intersection of 5G geopolitics and standards, what risks and opportunities does Open RAN present for European technological sovereignty? The Radio Access Network (RAN) is the radio part of a mobile telecommunications system that enables the connection between a mobile device (such as a phone or computer) and the core network. While traditionally a single vendor (such as Huawei, Ericsson, or Nokia) provides a “proprietary” or “closed” solution for this part of the network, Open RAN (Open Radio Access Network) is a concept describing disaggregated architectures that divide the RAN into several bricks connected by open interfaces. The objective is to allow the operator to buy these hardware and software bricks from various suppliers, and to choose freely the most suitable option for each part. In the current context of a concentrated 5G market, dominated by three major manufacturers and even facing the risk of an Ericsson-Nokia duopoly with the exclusion of Huawei from many countries, telecom operators emphasize the flexibility and diversification of suppliers allowed by Open RAN, which would allow both more innovation and cost reduction. In line with its diplomatic campaign against “unreliable” Chinese suppliers, the United States has actively promoted Open RAN as an alternative. However, Open RAN seems far from being a panacea for Europe: in addition to the difficulties that remain in terms of maturity, security, performance and transparency of the specification process, it risks increasing European dependence on foreign suppliers. Although Huawei is not part of the international bodies working on Open RAN (such as the Telecom Infra Project or the O-RAN Alliance), many companies close to the Chinese political and military authorities are. Beyond the question of supplier security, American lobbying is linked to the commercial opportunity that Open RAN represents for American companies, currently leaders in the cloud, software and generic hardware components…even though they do not have a major 5G champion. Open RAN is therefore an issue at the crossroads of the geopolitics of 5G and standards, to which the European Union is beginning to provide a common political and analytical response, despite the diversity of positions among member states.
Topic:
5G, Telecommunications, and International Competition
Political Geography:
China, Europe, Asia, and United States of America

166. How China’s Foreign Aid Fosters Social Bonds With Central Asian Ruling Elites

Author:
Nargis Kassenova
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
China has become a global power, but there is too little debate about how this has happened and what it means. Many argue that China exports its developmental model and imposes it on other countries. But Chinese players also extend their influence by working through local actors and institutions while adapting and assimilating local and traditional forms, norms, and practices. With a generous multiyear grant from the Ford Foundation, Carnegie has launched an innovative body of research on Chinese engagement strategies in seven regions of the world—Africa, Central Asia, Latin America, the Middle East and North Africa, the Pacific, South Asia, and Southeast Asia. Through a mix of research and strategic convening, this project explores these complex dynamics, including the ways Chinese firms are adapting to local labor laws in Latin America, Chinese banks and funds are exploring traditional Islamic financial and credit products in Southeast Asia and the Middle East, and Chinese actors are helping local workers upgrade their skills in Central Asia. These adaptive Chinese strategies that accommodate and work within local realities are mostly ignored by Western policymakers in particular. Ultimately, the project aims to significantly broaden understanding and debate about China’s role in the world and to generate innovative policy ideas. These could enable local players to better channel Chinese energies to support their societies and economies; provide lessons for Western engagement around the world, especially in developing countries; help China’s own policy community learn from the diversity of Chinese experience; and potentially reduce frictions.
Topic:
Foreign Policy, Foreign Aid, and Elites
Political Geography:
China, Central Asia, and Asia

167. A Historical Evaluation of China’s India Policy: Lessons for India-China Relations

Author:
Vijay Gokhale
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The violent clash in the Galwan valley in eastern Ladakh in 2020 fundamentally altered the dynamics of the India-China relationship. China’s increasing transgressions and attempts at coercion in the border areas since 2008–2009 have put the boundary question to the center of the India-China relationship. The salience of this question has also increased because the geopolitical backlash to China’s actions in 2020 has been greater than in previous instances, and because India’s policymakers and strategic community are no longer willing to give Beijing the benefit of the doubt regarding its intentions and actions. This has prompted a comprehensive relook in India at the past, present, and future of the relationship. While much of this has focused on the relationship from the Indian perspective and on trying to understand India’s China policy, the current chill in ties has highlighted the necessity of understanding China’s India policy. Thus, using Chinese sources, this paper analyzes the drivers of that policy and the options available to Indian policymakers to engage with, adapt to, and mold it. This paper argues that from the time of Mao Zedong’s rise to the helm of the Chinese Communist Party and the founding of the People’s Republic of China in 1949, China’s India policy has been shaped by its view of the larger great power strategic triangle of China, the Soviet Union (later Russia), and the United States. As this triangle has evolved, this has had a direct effect on the India-China relationship. For much of the past seventy years, China was the weakest corner of the triangle and therefore driven by goals of security and status. In that context, it saw India—another large, developing country in Asia—as a competitor for security and status alike. As a result, China always looked at India through the lens of its own relations with the Soviet Union and the United States. It did not view India on its own merits, or credit it with agency, but as unequal as well as untrustworthy. China’s objective during the Cold War was to keep India as neutral as possible. In the post–Cold War period, the goal evolved to limit through containment and coercion India’s capacity to harm China’s strategic goal of hegemony. This paper analyzes China’s India policy in three phases. In the first phase between 1949 and 1962, China viewed the United States as its primary adversary and its core objective was to keep India neutral and away from the U.S. camp on matters of concern to Beijing. Flowing from this was the secondary objective of utilizing India’s influence in the developing world to build “Asian solidarity” to stem U.S. inroads into Asia.
Topic:
Foreign Policy, Bilateral Relations, Territorial Disputes, and Military
Political Geography:
China, India, and Asia

168. How Malaysian Politics Shaped Chinese Real Estate Deals and Economic Development

Author:
Guanie Lim
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Iskandar Malaysia is the oldest and by far the most prominent economic corridor in Malaysia. Located in the southernmost state of Johor, the corridor came to host several real estate developments (such as Princess Cove and Forest City) involving multinational corporations (MNCs) from China almost immediately after the Belt and Road Initiative (BRI) was launched in 2013. On one level, the infrastructure-spending spree associated with the BRI helped boost Malaysia’s economy as Chinese real estate MNCs invested in Iskandar Malaysia to grow their overseas portfolios. However, their involvement in the corridor disrupted the existing dynamics between Malaysia’s central and local governments. Although these Chinese projects offered an opening for Johor’s state government to counter Putrajaya’s dominance in the economic corridor, some swiftly became a magnet for divisive electoral campaigning and voter anger. Combined with several socioeconomic issues, the discontent generated by these Chinese real estate projects contributed to the unexpected defeat of the long-ruling United Malays National Organization (UMNO) in Malaysia’s May 2018 general election. Chinese real estate MNCs have sought to adapt to these shifting dynamics, yet it is uncertain to what degree their adaptive strategies will bear fruit amid a looming real estate crisis back in China and other related issues. Ultimately, Chinese real estate investment has been both a tool and an enabler of efforts undertaken by various Malaysian stakeholders, rather than the all-powerful China-imposed juggernaut that some commentators on Malaysia’s development over the last two decades have tended to see. Despite the allure of lucrative real estate deals, it is equally important to recognize the potential pitfalls when local politics go awry. Events in Iskandar Malaysia demonstrate that it is politically unsustainable to push real estate projects that are too expensive for most local residents to afford.
Topic:
Politics, Entrepreneurship, Risk, Economic Development, and Real Estate
Political Geography:
China, Malaysia, and Asia

169. Localization and China’s Tech Success in Indonesia

Author:
Gatra Priyandita, Dirk Van Der Kley, and Benjamin Herscovitch
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
On average, Indonesians distrust China and many Chinese firms. Yet Huawei and to a lesser extent ZTE have successfully positioned themselves as trusted cybersecurity providers to the Indonesian government and the Indonesian nation. This has been no easy feat given long-held Indonesian animosity toward China. Many Chinese companies have faced protests over concerns they were taking local jobs. Huawei and ZTE have suffered no such fate. Nor has there been a broad coalition of Indonesian voices against using Chinese technology in critical telecommunications infrastructure. In short, Indonesians care a lot more about Chinese cement plants than they do about Huawei involvement in 5G networks. Gatra Priyandita Gatra Priyandita is an analyst at the International Cyber Policy Centre at the Australian Strategic Policy Institute, where he leads a project researching cyber-enabled intellectual property theft. He is a political scientist by training and specializes in the study of foreign policy and security in Southeast Asia. He holds a PhD in political science from the Australian National University. This is a vastly different conversation to those happening in rich liberal democracies. Huawei and ZTE have been able to achieve success in Indonesia, despite a sense of ambivalence among the Indonesian political and defense establishment about Chinese intentions and growing Western scrutiny over the use of Chinese technology in broadband networks. As other papers in this series have demonstrated, Huawei and ZTE needed to localize their strategies. Like elsewhere in the world, available evidence suggests that part of Huawei’s and ZTE’s value proposition is cheaper prices (compared to those of competitors) for high-quality technology. But that is only part of the story. Huawei has positioned itself as Indonesia’s cybersecurity provider of choice by offering enormous cybersecurity and other related training programs across the country for groups ranging from senior government officials to students in rural Indonesia. Much of this training is technically focused on practical vocational skills with a hope that students one day will become customers. In addition, the company offers an attractive maintenance and upkeep package. Since the mid-2000s, Chinese information and communications technology (ICT) firms have created training centers in partnership with local Indonesian telecoms companies and universities to train the next generation of Indonesian engineers and tech specialists. Government agencies are also increasingly targets of training and capacity-building programs, with Huawei claiming that 7,000 government officials have participated in its training programs. The Indonesian government, corporations, and ordinary citizens alike have welcomed Huawei and ZTE as essential partners in their efforts to build both the infrastructure and human capital necessary to prosper in the twenty-first century’s digital economy. What Huawei and ZTE offer is knowledge transfer, not technology transfer. The technology is still being built in China by Chinese firms. Huawei’s role in training relates instead to capacity building. Indonesians will install, maintain, and use the networks. China will build the hardware. There is also evidence that China has had some rhetorical success in pushing its version of cyberspace governance. Beijing’s preferred cyberspace governance language was inserted into a memorandum of understanding between Indonesia’s National Cyber and Crypto Agency and the Cybersecurity Administration of China. However, it is difficult to see how the memorandum has influenced Indonesia’s cybersecurity governance in practice. One of the concerns often leveled by rich liberal democracies is that reliance on Chinese tech will end up aligning the political interests of countries like Indonesia with those of China. Other key worries are China’s pervasive espionage and the enduring (though as yet unrealized) risk that Chinese companies with a dominant role in an ICT ecosystem could be used by Beijing to apply coercive political pressure. Despite Indonesia’s embrace of Huawei and ZTE, political leaders in Jakarta have not simply disregarded the hard security questions posed by upgrading ICT equipment, especially when foreign suppliers are involved. Indonesian officials simply rate the need for development and cybersecurity-related capacity building higher than the risk of using Chinese ICT hardware in their critical infrastructure systems. If rich liberal democracies are concerned about this trend, then they need to offer workable alternatives that place Indonesia’s enormous digital development needs at the heart of any value proposition. It is unlikely that Indonesia will stop using Chinese hardware in its infrastructure, but alternatives could prevent overreliance.
Topic:
Foreign Policy, Science and Technology, Cybersecurity, Telecommunications, and Localization
Political Geography:
China, Indonesia, and Asia

170. Engaging China on Strategic Stability and Mutual Vulnerability

Author:
George Perkovich
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The United States and Chinese governments, for the foreseeable future, will have the resources to keep each other’s societies vulnerable to nuclear mass destruction. If these governments are not self-destructive, they will want to keep their competition from escalating into armed conflict that could lead to nuclear war. The constructs of strategic stability and mutual vulnerability can help significantly if both governments embrace them and interpret them similarly or even if the leaders of the two countries accurately understand how they differ in their perspectives on them. Unfortunately, to date, on these issues the United States and China are like a quarrelling married couple who tried therapy for one or two appointments, found it dissatisfying, and then alternated in making excuses for not trying again, perhaps with a different therapist or format. Each says they have tried and the other doesn’t listen or understand. Both suspect that the other isn’t saying what they really feel or want; what they really feel is hostility and distrust and what they really want is to get richer and more powerful without being hassled or attacked. It would be easier if they could just go their separate ways, but the property and wealth they depend on will be lost (or at least severely diminished) if they split up or do each other harm. This paper suggests that U.S. and allied interests require persistence in inviting China to dialogue on strategic stability; to demonstrate goodwill, the United States should acknowledge mutual vulnerability as a fact and necessary policy. The need for both moves is reflected in the fact that neither government has defined what it might mean by stability or mutual vulnerability. To help test intentions and prompt harder thinking, the paper plays the role of therapist and offers definitions of both concepts—strategic stability and mutual vulnerability—so that the two sides can critique them more freely and without recrimination. These definitions are broader and deeper than usual, reflecting the growing problem of managing escalation of conventional conflict to nuclear war, the scenario that drives U.S. and Chinese concerns and military posturing. Further, broader definitions are necessary to comprehend the dangers stemming from the entanglement of conventional, cyber, and nuclear weapons and command and control systems. The paper then sketches four benefits of declaring mutual vulnerability, contrary to opponents of the idea, before discussing steps that the United States and China could subsequently take to reflect and build each other’s confidence in such a policy. Finally, if perceived U.S. requirements in the future will be greater than the arsenal needed to deter or defeat Russia or China alone, how will Russia and China be persuaded not to try to build up to balance the additional U.S. force? In other words, if the United States is in two separate but interacting arms races (and deterrence relationships), how could each opponent (China and Russia) be persuaded to negotiate limits on their arsenal lower than the total the United States would insist on possessing to deter two nuclear opponents? Answers to these questions will affect strategic stability and mutual vulnerability of all parties but will take a long time to develop. To begin the process, the paper suggests asking Chinese leaders whether their silence on Putin’s nuclear first-use threats means that China has changed its own policy on nuclear use or that it never took a no-first-use policy seriously in the first place. Is China concerned that the capabilities that the United States and its allies may develop to strengthen defenses against Russia could be used against China too, and if so, might arms control be a wiser approach? Ultimately, the paper suggests that if China and the United States can sustain a process of serious dialogue, they will keep their relationship from worsening even if they cannot formally restrain their competition. And if dialogue leads one to ask the other for deeds to demonstrate goodwill, the paper has suggested some such deeds that could be undertaken with no security hazard and only slight political risk. No one should have the illusion that happiness is in this couple’s future. All this work would be to allow a nonviolent cohabitation that is better than the alternative of destitute divorce or murder-suicide.
Topic:
Government, Nuclear Weapons, Strategic Stability, and Vulnerability
Political Geography:
China, Asia, North America, and United States of America

171. Why Brazil Sought Chinese Investments to Diversify Its Manufacturing Economy

Author:
Celo Hiratuka
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Since the beginning of the twenty-first century, economic relations between Brazil and China have grown significantly. The main driver of this process has been China’s enormous demand for agricultural, energy, and mineral commodities. On the one hand, Brazil’s strong competitiveness in these products has helped the country consolidate its role as an important supplier to China, increasing exports and turning China into the main destination for Brazilian exports since 2009.1 On the other hand, China, by virtue of its status as the “factory of the world,” has established itself as the main supplier of manufactured products to Brazil.2 Nonetheless, Brazilian scholars, think tanks, and private manufacturing firms have raised concerns. They have done so despite the great boost in bilateral trade flows; the favorable trade balance for Brazil; and the leveraging of businesses in several Brazilian sectors such as soybeans, iron ore, and oil. These concerns are related to the excessive concentration of Brazilian exports in a few products, the environmental impacts of these exporting activities, and the effects of strong Chinese manufacturing competition on Brazil’s domestic market. These worries have become more significant when one considers the growing importance of manufacturing changes with the diffusion of Fourth Industrial Revolution technologies and the search for new renewable energy sources and environmental sustainability. For Brazil, this matter reflects a need to advance bilateral relations beyond existing export trade volumes and toward new drivers of more diversified economic growth that will help the country escape a specialization in commodities. The fortunes of the Chinese company BYD in Brazil are highly relevant to these trends. BYD is a company that has diversified from the production of batteries into different innovative industrial sectors, such as renewable energy and electric vehicles. BYD has also been expanding rapidly in international markets, and in that process it chose Brazil as an important market, where it has built factories to produce electric bus chassis, photovoltaic panels, and batteries for electric buses. BYD’s trajectory in Brazil certainly has not been smooth. On the contrary, the firm has had to adapt to market fluctuations and, above all, to changes in the Brazilian government’s economic policies, which have made the company’s experience in the country quite turbulent. Despite this, BYD survived its first years in Brazil and more recently has been showing signs of continuing to invest in the Brazilian market. Analysis of BYD’s experience in Brazil shows, on the one hand, that there are important possibilities for new economic relations with China that go beyond trade in commodities, with productive investments that can potentially help Brazil simultaneously incorporate more knowledge-intensive activities and drive positive environmental impacts by generating renewable energy and reducing carbon emissions. On the other hand, the story of BYD also shows that the transformation of these possibilities into effective benefits requires coordinated actions on the part of Brazilian policymakers to offer a long-term horizon for Chinese investments. In that spirit, Brazil must craft a long-term strategy for its economic relationship with China to increase the odds that bilateral engagement can advance in a new and more sustainable, mutually beneficial direction.
Topic:
Bilateral Relations, Economy, Investment, Manufacturing, and Engagement
Political Geography:
China, Asia, Brazil, and South America

172. What China Is Learning From West African Managerial Practices

Author:
Abdoulkadre Ado
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Joint ventures have enabled Chinese companies to cultivate a presence in three West African countries—Ghana, Niger, and Nigeria. Investing in joint ventures has enabled Chinese cultural adaptation by emphasizing training programs in languages commonly spoken in West Africa, embracing local management styles, and assimilating some local practices. This has been especially true in three key economic sectors: free trade zone promotion and related services, transportation and aviation, and oil and gas. Chinese firms are also complementing these growing business arrangements with the use of local languages, social media outreach, and other forms of local engagement with West Africans. In doing so, Chinese organizations have responded to some of the demands of their African partners in local, state, and central government posts. It would be beneficial for African governments, businesses, and corporate managers to explore further ways to incentivize Chinese government decisionmakers and Chinese businesses to use joint ventures more often as the vehicle for their investments in Africa. To deepen the impact of such efforts, they should also encourage Chinese organizations active in West Africa, and across the continent in general, to embrace the use of local languages, especially for conducting business, and to train more Chinese expatriates to use African managerial philosophies that have proven to respect local values while being effective in African markets. Research on China’s engagement abroad and Chinese firms’ business operations in foreign countries often argues that Chinese organizations are not keen to adapt to local contexts. As a result, some analysts of China-Africa relations argue, or at least imply, that China does things as it wishes in Africa and that African countries have little agency in shaping how Chinese governmental and commercial players operate in their countries. Some analysts have even characterized African countries’ relationships with Beijing as the “Chinisation of Africa.”1 This line of thinking tends to assume that local contexts have mattered little for Chinese economic activities in Africa so far. But Chinese commercial engagement in Africa is increasingly adaptative to local contexts, conditions, and complexities. In Ghana, Niger, and Nigeria, Chinese actors are adjusting their ways of doing business to consider local realities with respect to both formal and informal institutions. For one thing, the Chinese players who are active in these three countries are acknowledging and mobilizing African practices and cultural traditions to support their own business goals and sometimes those of their local partners. The level of Chinese economic engagement tends to differ from one African country to another, with some places being more welcoming of a Chinese commercial presence than others. The specific patterns of Chinese adaptation also tend to vary between different parts of Africa. For instance, these adaptations may look different in a Francophone country like Niger than they would in a country like Nigeria. Niger is a nation where China’s adaptation differs from its adaptation in Ghana or Nigeria since language and managerial practices partly are derived from various French and British cultural traditions and colonial imprints in those three African countries.
Topic:
Business, Engagement, Management, and Adaptation
Political Geography:
Africa, China, Asia, and West Africa

173. China Is Playing by Turkey’s Media Rules

Author:
Çağdaş Üngör
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Chinese players have localized their strategies to improve China’s image in Turkey in recent years. Although China and Turkey have long maintained friendly relations at the official level, Turkish people remained notably skeptical of China throughout the 2000s. Indeed, Turkey’s unfavorable public opinion has been a constant headache for China, whose propaganda outlets in the country produce little Turkish language content that actually resonates with domestic audiences. Turkey also has few explicitly pro-China voices and no sizable overseas Chinese community, which has made positive public relations into an uphill battle for Beijing. But having acknowledged these weaknesses in recent years, the Chinese regime has opted for strategies that aim at building a new synergy with local actors in the Turkish mediasphere. Beijing has adapted to the local rules of Turkish media and sought new opportunities to elevate China’s image in Turkey by leveraging its friendly ties with Ankara. The Turkish government, which exerts substantial influence over domestic media, has provided new platforms for China to realize its soft power goals within a largely polarized setting with little press freedom. In this context, Turkey’s progovernment newspapers have published “advertorials” celebrating the achievements of the Chinese Communist Party. Similarly, journalists from Turkey’s state-owned Anadolu Agency have participated in Chinese-sponsored press tours to Xinjiang, where Beijing has sought to undercut the Turkish narrative around abuses against the Uyghurs. On the other end of Turkey’s polarized ideological spectrum, China has also appealed to left-wing opposition groups through its narratives, which emphasize the country’s anti-imperialist credentials. Such messaging strategies may already have produced some results in Turkey, as the most recent opinion polls reflect a gradual increase in the number of Turkish citizens who perceive China as a potential partner.
Topic:
Media, Domestic Politics, and Soft Power
Political Geography:
China, Turkey, Middle East, and Asia

174. Hard Cash and Soft Power: When Chinese Firms Win EU Contracts

Author:
Allison Carragher
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The European Union is a committed defender of open markets. This extends to its public procurement mechanisms, which remain open to all bidders. EU policymakers have developed tools intended to defend the bloc’s interests in the face of increased economic and strategic competition from the People’s Republic of China (PRC), but few policymakers understand how the European public views the debate. As the first major EU-funded, China-built infrastructure project, the Pelješac Bridge in Croatia provides a unique opportunity to conduct a thorough analysis of European public opinion toward EU tendering policy and Chinese companies. Brussels has labelled the PRC a partner for cooperation and negotiation, an economic competitor, and a systemic rival,1 but the nuances of this policy remain difficult to ascertain. Projects and policies presented by China as “cooperation” often contain elements of economic competition or are leveraged by the PRC for strategic gain. However, this dichotomy has not filtered down to citizens. Extensive polling reveals that Croatians share very few of the concerns of EU policymakers. Furthermore, the PRC state-owned construction firm enjoys more visibility than the EU, which provided hundreds of millions of euros for the project. In terms of soft power, which is here defined as the ability of a country to shape the narrative, the Pelješac Bridge has been a resounding success for the PRC. The Croatian public has largely embraced the PRC’s preferred image of itself as a reliable and trustworthy economic partner and a benign power that does not interfere in domestic affairs. This opinion diverges from official EU policy and glosses over evidence of the PRC’s unfair economic practices, environmental and labor shortcomings, and interference in European democracies. Notably, the PRC’s soft-power gains were achieved on the EU’s own dime. It is not in the EU’s interest to bankroll the economic and soft-power ambitions of its systemic rival. As a democratic institution, the EU has a responsibility to both respond to public opinion and educate its citizenry when EU interests are at stake. In this case, the EU should recalibrate its tendering policy to be fairer and better aligned with its own economic and strategic interests. This process is currently underway, but it should also be extended to co-financing arrangements like the Team Europe approach, which combines traditional EU assistance with support from individual EU member states and international financial institutions. These policies must also be paired with renewed efforts at visibility and branding. Lastly, there is a need to collect and publish better data on the end users of EU funds in order to evaluate successes and identify future issues.
Topic:
Infrastructure, European Union, Economy, Business, Soft Power, and Strategic Competition
Political Geography:
China and Asia

175. Public responses to foreign protectionism: Evidence from the US-China trade war

Author:
David Steinberg and Yeling Tan
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
America's recent turn toward protectionism has raised concerns about the future viability of the liberal international trading system. This study examines how and why public attitudes toward international trade change when one's country is targeted by protectionist measures from abroad. To address this question, the authors fielded three original survey experiments in the country most affected by US protectionism: China. First, they find consistent evidence that US protectionism reduces Chinese citizens' support for trade. This finding is replicated in parallel experiments on technology cooperation, and further validated outside of the China context with a survey experiment in Argentina. Second, they show that responses to US protectionism reflect both a "direct reciprocity" logic—citizens want to retaliate against the United States specifically—and a "generalized reciprocity" logic that reduces support for trade on a broader, systemic basis.
Topic:
Economics, International Trade and Finance, Protectionism, and Competition
Political Geography:
China, Asia, North America, and United States of America

176. North Korea as a complex humanitarian emergency: Assessing food insecurity

Author:
Marcus Noland
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
North Korea is a complex humanitarian emergency with food insecurity at its core. As of August 2022, both quantity and price data point to a deteriorating situation, made worse by the regime’s self-isolating response to the COVID-19 pandemic and the war in Ukraine. Food availability has likely fallen below minimum human needs and on one metric is the worst since the 1990s famine. Food insecurity in North Korea is not only a humanitarian issue but also a strategic one. In this context, the diplomatic leverage conferred by aid is unclear, nor is North Korea’s priority as a recipient, in light of competing needs elsewhere. Resolution of North Korea’s chronic food insecurity would require changes in the regime’s domestic and foreign policy commitments, but this seems unlikely due to enablement by China and Russia.
Topic:
Food Security, Crisis Management, Humanitarian Crisis, COVID-19, and Russia-Ukraine War
Political Geography:
Asia and North Korea

177. Why gender disparities persist in South Korea’s labor market

Author:
Karen Dynan, Jacob Funk Kirkegaard, and Anna Stansbury
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Although the South Korean economy fared relatively well on the whole during the pandemic, the labor market consequences were uneven, with women experiencing worse outcomes than men. These gender disparities have reinforced and highlighted important longer-term gender-related challenges in the South Korean labor market. Despite an above-average level of female tertiary education, the gender pay gap in South Korea is at the top of the range among OECD countries. The labor force participation rate is 20 percentage points lower for women than for men, a difference that is about one-quarter larger than the average for high-income countries. These disparities—as well as fertility that is the lowest of any advanced economy country in the world—reduce South Korea's future economic prospects and will contribute to fiscal challenges as the population rapidly ages. The analysis in this paper suggests that the combination of low female employment and low fertility in South Korea reflects features of the traditional nature of work that create a particularly stark tradeoff for women between work and family and put pressure on women to choose one or the other. This tradeoff has increased in recent years because the opportunity cost of having a child has risen with the rapid growth in the tertiary education rate of South Korean women. Regressions based on individual-level data from the Korean Labor and Income Panel Study (KLIPS) show that the entire gap in female labor force participation is driven by married women, particularly women with children. Unmarried women with no children are just as likely to be employed as men. A sizable "child earnings penalty" for South Korean women is fully explained by women dropping out of the labor force after the birth of their first child rather than reducing hours or hourly wages. Although South Korea has made strides toward making work more family friendly, there is scope to do better.
Topic:
Economics, Inequality, Labor Market, Fertility, and Gender
Political Geography:
Asia and South Korea

178. Savings transition in Asia: Unity in diversity

Author:
Prema-chandra Athukorala and Wanissa Suanin
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the national savings behaviour in the process of economic growth through a comparative analysis of countries in developing Asia from a historical perspective. Developing Asia provides an ideal laboratory for the study with considerable differences in the savings behaviour among countries and over time within individual countries, notwithstanding the ‘model saver’ image based on the average savings rate. The empirical analysis distinguishes between private and government savings rates, with specific emphasis on the former. The results of the empirical analysis are consistent with the view of ‘virtuous circle’ between growth and savings, with growth initiating the savings transition. No evidence to suggest that a prior phase of promoting savings through specific policy initiatives is needed to initiate the process of growth and structural transformation. The private savings rate is associated positively with per capita gross domestic product, export orientation, and foreign resource inflows and negatively with the young dependency ratio of the population and domestic credit availability.
Topic:
Economic Growth, Exports, Savings, and Structural Transformation
Political Geography:
Asia

179. Space Traffic Management: Time for Action

Author:
Mir Sadat and Julia Siegel
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Atlantic Council
Abstract:
Outer space has long been characterized as “contested, congested, and competitive.” More than four thousand eight hundred active satellites currently orbit Earth, representing over forty nations, and nearly twenty-five thousand satellites are projected to join by 2030. Moreover, spacefaring entities are testing the limits of space exploration: Visionary space companies are aiming to launch space tourism programs and send humans to space within the decade, and governments and militaries are increasing activity in cislunar space—the sphere formed by the Earth-Moon radius—to leverage advantageous orbital regions. As humanity expands its frontiers deeper into the galaxy, the threats to US and allied space capabilities will continue to increase. Yet, despite the proliferation of space activity, the ability of international and national bodies to track and regulate space objects—often referred to as space traffic management (STM)—reflects a past era wherein few actors conducted limited operations in space. The current state of STM can be more aptly described as space situational awareness (SSA), or the mere knowledge of objects in orbit. Global actors (including national governments, corporations, and international organizations) track space objects and notify satellite operators when the probability of collision is notable. While collision avoidance maneuvers are standard when there is a one in ten thousand chance of collision, it is ultimately up to the operators to determine whether and when they will move. The limits of this decentralized approach to SSA were illustrated in September 2019 when a European Space Agency satellite veered off path to avoid a Starlink satellite whose operator missed an email notification signaling a high probability of collision.
Topic:
Security, Defense Policy, National Security, and Space
Political Geography:
Russia, China, Eurasia, Asia, and United States of America

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

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

181. Negotiating Local Business Practices With China in Benin

Author:
Folashade Soule
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Commercial negotiations between Benin and China demonstrate how both sides navigate the dynamics of Africa-China business-to-business relationships. In Benin, Chinese and local Beninese officials engaged in drawn-out negotiations on a deal to construct a business center aimed at deepening business links between Chinese and Beninese merchants. Strategically located in Cotonou, Benin’s principal economic city, the center aims to promote investment and wholesale businesses by serving as a hub for China’s business-to-business relations not just in Benin but regionally in West Africa, especially in the large and growing neighboring market of Nigeria. This paper relies on original research and fieldwork conducted in Benin from 2015 to 2021 and the author’s access to draft and final contracts from the negotiations, which allow for a side-by-side comparative textual analysis, as well as initial field interviews and follow-up interviews with key negotiators, Beninese businessmen, and former Beninese students in China. The paper shows how Chinese and Beninese authorities negotiated the establishment of the center and, above all, how Beninese authorities made Chinese negotiators adapt to local Beninese labor, construction, and legal norms and put pressure on their Chinese counterparts. This strategy meant that negotiations took longer than usual to complete. China-Africa cooperation is often characterized by speedy negotiations, an approach that in some cases turns out to be harmful—since this can allow vague and unfair clauses to be featured in final contracts. The negotiations over the Chinese business center in Benin is a good example of how well-coordinated negotiators that take their time and work in coordination with various counterparts throughout the government can help facilitate better outcomes in terms of high-quality infrastructure and compliance with prevailing construction, labor, environmental, and business norms, while also preserving a good bilateral relationship with China.
Topic:
Foreign Policy, Development, Bilateral Relations, and Business
Political Geography:
Africa, China, Asia, and Benin

182. How Huawei’s Localization in North Africa Delivered Mixed Returns

Author:
Tin Hinane El Kadi
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Trade between China and North Africa has increased significantly since the early 2000s, but it has largely reproduced patterns of unequal exchange. Since they were unveiled, the Belt and Road Initiative (BRI) and the Chinese government’s 2016 Arab Policy Paper have signaled the promise of a qualitative shift in China’s engagement with the region. China has committed to increase investments in high-value-added sectors and to boost cooperation in science and technology with countries across North Africa. The digital space is a notable aspect of recent China–North African partnerships. Chinese tech firms are becoming ever more important actors in North Africa through the Digital Silk Road, the digital component of the BRI. North African governments see the Digital Silk Road as an opportunity to help bridge the digital divide and bolster their own national efforts to build digital economies and create high-quality jobs for the millions of unemployed university graduates across the region. In recent years, the region has become home to notable Digital Silk Road projects such as smart cities, satellite navigation centers, data centers, and network infrastructure. Huawei’s localization strategies in Algeria and Egypt show that, far from imposing a one-size-fits-all blueprint on other countries, as Beijing is often depicted as doing in U.S. and European media and policy discussions, Chinese tech players adapt their engagement depending on local development agendas. Flexibility, customization, and services tailored to local demand have been cornerstones of Huawei’s localization strategies in North Africa. Accommodating local development priorities is central to Huawei’s success in globalizing its business ventures. The Chinese firm has responded favorably to Algeria’s and Egypt’s attempts to leverage foreign companies for conducting more value-added activities within their respective economies. Among other things, Huawei opened its first African factory in Algeria, employing Algerians to assemble products for and beyond the Algerian market. It also launched an OpenLab for conducting research and development (R&D) activities in Egypt and established partnerships with several universities in the region to train local students. However, closer scrutiny of Huawei’s localization in both Algeria and Egypt indicates that the company improved its brand image without engaging in meaningful capacity building. For all its success at winning the hearts of government officials across the region, Huawei has engaged in training, manufacturing, and R&D in a way designed to maintain the firm’s technological edge. The Chinese tech giant has managed to localize seemingly developmental activities in North Africa without contributing much to technological upgrading. North African governments should take lessons from China’s playbook of how it became a technological superpower. This means adopting policies that could maximize the benefits of Chinese and non-Chinese investments by ensuring positives spillovers and protecting potential local tech champions. Increasing economic integration across North African countries and moving beyond fragmented bilateral commercial negotiations with China are two steps that may help level the playing field with the Asian giant.
Topic:
Development, Science and Technology, Telecommunications, Huawei, and Digital Space
Political Geography:
China, Asia, Algeria, North Africa, and Egypt

183. The Digital Silk Road and China’s Influence on Standard Setting

Author:
Alex He
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
China is striving to become a leader in international standard setting, and the Digital Silk Road, part of China’s Belt and Road Initiative to expand its global infrastructure and markets, is key to realizing this goal. Both roads depend on standard connectivity, fuelled by Chinese private companies that are the driving force behind China’s growing role as a leader in technology development and shaping standards in both domestic and global markets. However, China faces strong competition to gain more influence in international standard-setting bodies, which are dominated by the European Union and the United States.
Topic:
Infrastructure, Digital Economy, Trade, Digital Culture, Silk Road, and Digitalization
Political Geography:
China, Europe, Asia, North America, and United States of America

184. The private sector advances in China: The evolving ownership structures of the largest companies in the Xi Jinping era

Author:
Tianlei Huang and Nicolas Véron
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper documents recent structural changes in China’s corporate landscape, based on company-level data, providing a complementary perspective to that of official Chinese statistics. We classify China’s largest companies by revenue since 2004 (based on Fortune Global 500 rankings), and largest listed companies by market capitalization since 2010, into state and private-sector categories, using a conservative definition of the private sector. Among the largest companies by revenue, the private sector was nonexistent in the mid-2000s but has grown steadily in the past decade, even though the state sector still dominates. The aggregate revenue of private-sector companies has grown from zero in Fortune’s ranking in 2005 (based on 2004 revenue) to $104 billion in the 2011 ranking, or merely 3.8 percent of the $2.78 trillion in aggregate revenue for all Chinese companies in the ranking, and to $1.7 trillion in the latest 2021 ranking (based on 2020 revenue), or 19 percent of the Chinese companies’ aggregate revenue. As for market value of the largest listed firms, the private sector’s share in the top 100 listed Chinese companies was only 8 percent at end-2010 but crossed the 50 percent threshold in 2020 and retreated slightly in 2021 to 48 percent, following that year’s regulatory crackdown on several private-sector-dominated industries. These findings do not support a narrative of broad-based rollback in recent years of previous private-sector expansion.
Topic:
Economy, Private Sector, Corporations, and Business Management
Political Geography:
China and Asia

185. Public responses to foreign protectionism: Evidence from the US-China trade war

Author:
David Steinberg and Yeling Tan
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
America's recent turn toward protectionism has raised concerns about the future viability of the liberal international trading system. This study examines how and why public attitudes toward international trade change when one's country is targeted by protectionist measures from abroad. To address this question, the authors fielded three original survey experiments in the country most affected by US protectionism: China. First, they find consistent evidence that US protectionism reduces Chinese citizens' support for trade. This finding is replicated in parallel experiments on technology cooperation, and further validated outside of the China context with a survey experiment in Argentina. Second, they show that responses to US protectionism reflect both a "direct reciprocity" logic—citizens want to retaliate against the United States specifically—and a "generalized reciprocity" logic that reduces support for trade on a broader, systemic basis.
Topic:
Economics, Political Economy, Public Opinion, Trade, and Protectionism
Political Geography:
China, Asia, North America, and United States of America

186. Defying United Nations Sanctions: Three Reasons for African Engagement with North Korea

Author:
Tycho van der Hoog
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The United Nations (UN) sanctions against North Korea are weakened by structural evasion techniques and weak enforcement. The African continent is a crucial node in the global illicit networks of North Korea. This paper examines three motives for African states to cooperate with North Korea, with a particular focus on the context of southern Africa: historical affinity (reciprocity), the practical issue of maintenance dependency (necessity), and the presence of weak enforcement regimes (opportunity). Based on a deep reading of UN Panel of Experts reports, academic literature and policy papers, novel archival material, and an interview with a defected North Korean diplomat, this paper argues that solutions to strengthen the sanctions regime can be successful only if they are grounded in African initiatives.
Topic:
Security, Economics, United Nations, and Sanctions
Political Geography:
Africa, Asia, and North Korea

187. Debunking the Korean Peninsula "Arms Race": What's Behind South Korea's Military Force Development?

Author:
Markus Garlauskas and Axel Catellier
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Following a record number of North Korean missile launches, as well as tests by South Korea, assertions have been widely and uncritically made that Seoul is participating in an inter-Korean arms race. This paper challenges that paradigm by arguing that South Korea’s military acquisitions, displays, and testing of new weapons are better explained as proactive efforts to build military capabilities to support national security priorities in a broader context, rather than reactions to the threat from North Korea. While North Korea’s reasons for weapons testing are well-documented, South Korea’s military buildup in recent years has received far less attention. This paper examines drivers behind South Korea’s military investments and makes recommendations for how the Republic of Korea (ROK)-United States alliance could incorporate these capabilities into alliance military operations beyond simply deterring or defeating North Korea. To do so, it examines how broader drivers affect ROK strategic thinking, the demands this puts on the ROK military, and how those demands translate to specific defense acquisitions. With the start of a new ROK presidential administration, it is an opportune time for Seoul and Washington to coordinate approaches on capabilities development in ways that would benefit both countries in the years to come.
Topic:
Security, Armed Forces, Arms Race, and Military
Political Geography:
Asia, South Korea, and North Korea

188. Inter-Korean Reconciliation and the Role of the U.S.: Facilitator or Spoiler?

Author:
Gabriela Bernal
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Although the Korean Peninsula has been divided for over 70 years, North and South have not been able to make lasting progress in terms of reconciliation. While there are multiple factors directly influencing the extent to which inter-Korean relations can progress, this paper focuses on the role of the United States. When it comes to inter-Korean reconciliation efforts, is the U.S. more of a facilitator or a spoiler? By looking at three case studies spanning three South Korean administrations—Roh Tae-woo, Roh Moo-hyun and Moon Jae-in—this paper attempts to find patterns and lessons related to Washington’s role in the complex inter-Korean reconciliation process. The cases reveal that the U.S. has played the role of both facilitator and spoiler in each case, and that whatever role the U.S. plays depends on its own relationship with North Korea at that time. The U.S. is most likely to play a facilitating role when the administrations in Washington and Seoul are both willing to engage diplomatically with Pyongyang, when progress is being made in denuclearization talks, when the geopolitical environment is conducive towards diplomacy and engagement with North Korea, and when the U.S. adopts a reciprocal negotiating strategy. The paper concludes by considering the conditions necessary to achieve inter-Korean reconciliation and to establish long-term peace on the peninsula. Key factors include the need for trust-building and reciprocity between the U.S. and North Korea, and adopting a more holistic approach that goes beyond the nuclear problem and aims to establish a lasting relationship between Washington and Pyongyang.
Topic:
International Relations, Security, Foreign Policy, Bilateral Relations, and Reconciliation
Political Geography:
Asia, South Korea, North Korea, and United States of America

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

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

190. South Korea's Public Diplomacy during the COVID-19 Pandemic: Seeking Status as an Authority in Global Governance

Author:
Kadir Ayhan
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The COVID-19 pandemic caught almost all countries unprepared. Some countries, including South Korea (hereafter Korea), managed to deal with the pandemic relatively more successfully than others and had a proactive global posture from early on, including providing aid, and public diplomacy campaigns. In this paper, I explore Korea’s COVID-19-related public diplomacy activities and its aims. I analyze Korea’s COVID-19 humanitarian aid trends, its policy documents, and the tweets related to the pandemic posted by the country’s official public diplomacy account. I find that the pandemic catalyzed what Korea had already been aiming to do, which is improve its global status to be among top authorities across various issue-areas. Due to the nature of the pandemic, Korea’s public diplomacy has been themed around international cooperation and solidarity. I suggest that Korea should hold onto its international cooperation emphasis on public diplomacy, to form the basis for its status-seeking as an authority in global governance in the post-pandemic era.
Topic:
International Relations, Diplomacy, Domestic Policy, COVID-19, and Health Crisis
Political Geography:
Asia, South Korea, and Global Focus

191. Elementary education in India versus China: Guidelines for NEP implementation

Author:
Naveen Kumar and Vinitha Varghese
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper documents the state of elementary education in India and China since the 1960s, key lessons for India from China’s shift in focus from ‘quantity’ to ‘quality’, and evidencebased guidelines for effective implementation of India’s New Education Policy 2020 (NEP 2020). The divergent policy focus has led to differential trajectories for elementary education in the two emerging economies, with China being decades ahead in improving literacy rates. China’s adoption of the New Curriculum Reform 20 years before India’s NEP 2020 has put China on the path to achieving equitable development of ‘quality’ compulsory schooling. India’s NEP 2020 has components that have the potential to improve quality, equity, and efficiency of the education system. This paper makes the following recommendations for effective implementation of some of the NEP 2020 components: (1) an additional worker should be recruited at every preschool centre; (2) more resources should be allocated towards implementation, evaluation, and needed recalibration of the management of school clusters; (3) teacher recruitment, training, and rewards should be revamped; (4) standardized tests should be protected from data corruption, fudging, or grade inflation; and (5) a national-level road map and regular evaluations have to be introduced to ensure participation of socio-economically disadvantaged groups in education.
Topic:
Education, Literacy, and Schools
Political Geography:
China, South Asia, India, and Asia

192. Taxless fiscal states: Lessons from 19th-century America and 21st-century China

Author:
Yuen Yuen Ang
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
How do modern fiscal states arise? Perhaps the most dominant explanation, based on the European experience, is that democratic institutions that limited the extractive power of states—exemplified by the 1688 Glorious Revolution in England—paved the way for the rise of fiscal capacity and subsequent prosperity. Revisionist accounts, however, reveal that this dominant narrative is flawed. In fact, numerous factors converged to enable the rise of European fiscal states, and in England, debt and land were particularly salient factors. Building off this literature, I bring attention to the role of ‘taxless public financing’ (i.e. financing public infrastructure through means other than taxation) in the making of fiscal states in two seldom compared cases: 19th-century America and 21st-century China. Both countries relied heavily on taxless financing to launch an infrastructure boom that spurred rapid growth along with massive corruption and financial risks.
Topic:
History, Finance, Tax Systems, and Land
Political Geography:
China, Asia, North America, and United States of America

193. The private sector advances in China: The evolving ownership structures of the largest companies in the Xi Jinping era

Author:
Nicolas Véron and Tianlei Huang
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
This paper documents recent structural changes in China’s corporate landscape, based on company level data, providing a complementary perspective to that of official Chinese statistics. We classify China’s largest companies by revenue since 2004 (based on Fortune Global 500 rankings), and largest listed companies by market capitalisation since 2010, into state and private-sector categories, using a conservative definition of the private sector. Among the largest companies by revenue, the private sector was non-existent in the mid-2000s but has grown steadily in the past decade, even though the state sector still dominates. The aggregate revenue of private-sector companies grew from zero in Fortune’s ranking in 2005 (based on 2004 revenue) to $104 billion in the 2011 ranking, or merely 3.8 percent of the $2.78 trillion in aggregate revenue for all Chinese companies in the ranking, and to $1.7 trillion in the latest 2021 ranking (based on 2020 revenue), or 19 percent of the Chinese companies’ aggregate revenue. As for market value of the largest listed firms, the private sector’s share in the top 100 listed Chinese companies was only 8 percent at end-2010 but crossed the 50 percent threshold in 2020 and retreated slightly in 2021 to 48 percent, following that year’s regulatory crackdown on several private-sector-dominated industries. These findings do not support a narrative of broad based rollback in recent years of previous private-sector expansion.
Topic:
Business, Private Sector, and Corporations
Political Geography:
China and Asia

194. Assessing the economic, societal and cultural impact of YouTube in India

Author:
Oxford Economics
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Oxford Economics
Abstract:
Recent research by Oxford Economics suggests YouTube contributed 6,800 Cr to the Indian economy in 2020 and supported 6,83,900 jobs. But its impact goes further, bringing a rich array of economic, cultural and societal benefits to India. YouTube generates substantial revenue for creators, artists, and media companies, who in turn support a broad ecosystem of employees and businesses in India. Creators deliver a wealth of educational tools and materials, which are valued by students, parents, and teachers alike.
Topic:
Economics, Mass Media, Social Media, and YouTube
Political Geography:
India and Asia

195. Climate change and food prices in Southeast Asia

Author:
Oxford Economics
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Oxford Economics
Abstract:
Southeast Asia’s climate has become warmer, wetter and more unpredictable over the past decade. Our bespoke analysis finds that these changes in weather conditions have had a significant impact on the cost of food production in levels terms and in increased food price volatility. Specifically, a 1% increase in temperature versus a year ago is found to increase food production costs by 0.5-0.8% across Southeast Asian economies, and extreme heat events in Thailand and Vietnam in recent years have driven price spikes of 5-6%. Climate futures in which temperatures rise fastest and weather volatility increases most have the potential to generate ever-faster food price growth and greater price spikes. More stable food prices are, therefore, one key incentive for governments in the region to do their part to help the world transition toward net zero. But the sector’s intensive use of energy and logistics to produce and distribute food will mean the shift to low-carbon energy could also have major cost implications for the sector. So while prices may be more stable in a net-zero world, they will nevertheless face pressures from the transition. Fortunately, the government can explore a range of policy options to ease the cost of transition and mitigate the impact of food price volatility. These policy options encompass agricultural policy, energy efficiency, social policy, and trade and investment policies. Together with Food Industry Asia, Oxford Economics looks forward to developing this debate in the months and years ahead, building on the foundations presented in this report.
Topic:
Climate Change, Food Security, Weather, and Price
Political Geography:
Asia and Southeast Asia

196. Off Track – The role of China’s CRRC in the Global Railcar Market

Author:
Oxford Economics
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Oxford Economics
Abstract:
With $35 billion in total revenue in 2021, CRRC, the Chinese state-owned railroad rolling stock manufacturer, is the largest player in the $71 billion global railroad rolling stock industry. Like other Chinese state-owned enterprises (SOEs), CRRC is the beneficiary of both implicit and explicit government subsidies. According to its annual reports, CRRC received $271 million in explicit Chinese government subsidies in 2020, and nearly $1.3 billion total between 2015 and 2020. Implicit government subsidies to SOEs like CRRC are harder to quantify and come in a variety of forms. For example, an SOE may obtain production inputs, such as financing or land, at below market-rate prices. It may also sell its outputs at above market-rate prices, a possibility that is particularly relevant to rail manufacturing, where much of the output is sold to government entities. Estimates by other researchers show that explicit government subsidies represent only about a quarter of the total government subsidies that Chinese SOEs receive. Since the 1990s, China has pursued a policy towards SOEs of “grasping the large, letting go of the small,” investing in national champions to dominate their respective industries. Under the management of the State-owned Assets Supervision and Administration Commission (SASAC) since 2003, SOEs have been encouraged to “go big and go global” through domestic consolidation and expansion, as well as through foreign mergers and acquisitions. The effect of these policies, which are fundamentally mercantilist in nature, has been for these national champion SOEs like CRRC to capture their domestic markets, using the economic rents so generated to finance global expansion. Between 2006 and 2018, SOEs’ share of the assets of the largest global firms has increased from approximately 6% to 20%, with Chinese SOEs accounting for essentially all of this increase. While SASAC has targeted specific industries for its national champion, the overall trend in recent years has been towards continued government divestment from legacy SOEs. SOEs’ share of national industrial employment fell from 60% in 1998 to 38% in 2003 to 20% in 2010. Thus, as reflected in planning documents, the selection of industries for the fostering of national champions is anything but random and reflects the strategic interests of the Chinese government. In the case of rail, the government’s strategic interest is transparent and is laid out in the Belt and Road Initiative (BRI)—China seeks to dominate an integrated global rail transportation network based on Chinese technical standards. China expects to obtain significant financial and geopolitical benefits from this outcome and may be willing to absorb losses on individual foreign rail projects in order to break into foreign markets.
Topic:
Infrastructure, Hegemony, Railways, and Air Travel
Political Geography:
China and Asia

197. Not all political relation shocks are alike: Assessing the impacts of US-China tensions on the oil market

Author:
Yifei Cai, Valérie Mignon, and Jamel Saadaoui
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper assesses the effects of US-China political tensions on the oil market. Relying on a quantitative measure of these relationships, we investigate how their dynamics impact oil demand, supply, and prices over various periods, starting from 1971 to 2019. To this end, we estimate a structural vector autoregressive model as well as local projections and show that political tensions between the two countries pull down oil demand and raise supply at medium- and long-run horizons. Overall, our findings show that conflicting relationships between these two major players in the oil market may have crucial impacts, such as the development of new strategic partnerships.
Topic:
Security, Oil, Conflict, Rivalry, and Energy Crisis
Political Geography:
China, Asia, North America, and United States of America

198. The Belt and Road Initiative as Ten Policy Commandments: Review of Xi’s Kazakhstan and Indonesia Launch Speeches

Author:
Lauren A. Johnson
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
China Studies Centre, The University of Sydney
Abstract:
In 2019 Foreign Policy described China’s Belt and Road Initiative (BRI) as “the most talked about and least defined buzzword of this decade”. Given that confusion and the importance of leader political speeches in China, especially those of current President Xi Jinping, it is surprising that the BRI literature has little in-depth analysed the two launch speeches of 2013. This article seeks to fill that gap with study of those speeches and focus on the five cooperationoriented areas announced in each. In comparative context those ten pillars appear not to be descended from New Era Chinese heaven but rather demonstrate substantive thematic overlap with the ten pillars of what was once relatively mainstream macroeconomic development policy, the Washington Consensus. Yet, in the case of the BRI there is a relative implicit implementation emphasis also. In forward context of contemporary global political economy tensions, the need to recover from the COVID-19 pandemic, the G7’s Build Back Better and the European Union’s Global Gateway ambitions also, this article may offer a timely fresh and comparative lens on the BRI.
Topic:
Development, International Cooperation, Infrastructure, Hegemony, and Belt and Road Initiative (BRI)
Political Geography:
China, Asia, and Global Focus

199. Europe’s Area of Maritime Interest in Northeast Asia

Author:
Philip Shetler-Jones
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Participation in the monitoring of UN sanctions on North Korea is Europe’s most prominent operational contribution to Indo-Pacific security, but is also characterised by a fragmented, bilateral approach that contradicts the trajectory of recent European policies that strive for a more meaningful and coordinated investment in this area. A coordinated European presence in the region built around the sanctions monitoring task is within reach, and steps taken to achieve it would dramatically enhance the policy coherence and impact of European action on Northeast Asian security.
Topic:
Security, Foreign Policy, Military Affairs, European Union, and Maritime
Political Geography:
Europe, Asia, and North Korea

200. Japan and the War in Ukraine

Author:
Eyal Ben-Ari
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Jerusalem Institute for Strategy and Security (JISS)
Abstract:
Two weeks after the war began, Japan announced that its new National Security Strategy scheduled to be published this year would recategorize Russia from “partner” to “security challenge,” thus placing it alongside China and North Korea.
Topic:
Security, Defense Policy, Military Strategy, and Conflict
Political Geography:
Russia, Japan, China, Europe, and Asia