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112. Decoding China’s Technology and Industrial Policy: Seven Terms You Need to Know
- Author:
- Barry Naughton, Siwen Xiao, and Yaosheng Xu
- Publication Date:
- 03-2024
- Content Type:
- Policy Brief
- Institution:
- University of California Institute on Global Conflict and Cooperation (IGCC)
- Abstract:
- China’s technology and industrial policy programs have grown in scope and intensity since 2020, but the vocabulary used to describe them is vague and often misleading. This policy brief decodes seven essential terms and shows that they have concrete and complementary meanings. When understood in concert, they reveal the establishment of a large-scale, government-directed program of mission-oriented research, development, and application. Together these terms outline a substantial expansion of the Chinese government’s direct role in organizing economic activity, and hint at some of the limits of that expansion.
- Topic:
- Economics, Industrial Policy, Science and Technology, Research and Development, and Terminology
- Political Geography:
- China and Asia
113. The Quantum Race: U.S.-Chinese Competition for Leadership in Quantum Technologies
- Author:
- Juljan Krause
- Publication Date:
- 02-2024
- Content Type:
- Policy Brief
- Institution:
- University of California Institute on Global Conflict and Cooperation (IGCC)
- Abstract:
- Quantum computing is poised to unleash innovation across various sectors, from materials science to pharmaceutical and medical research, finance, logistics, and even climate change management. Quantum computing also has the potential to provide the backbone for future artificial intelligence and autonomous systems that cannot be realized with digital hardware alone, while quantum communication can strengthen security in cyberspace. For these reasons, quantum technologies feature prominently in the emerging technologies race between the United States and China. In this policy brief, IGCC postdoctoral fellow Juljan Krause analyzes China’s advances in quantum communication, which aim to signal China’s technological leadership while protecting Chinese communications from foreign surveillance. He argues that Chinese leadership in quantum communication will have strategic repercussions, particularly as it is likely to give China’s efforts to shape global industry standards additional momentum. Even if quantum communication has no immediate military implications, policymakers should consider how the technology could embolden China further.
- Topic:
- Industrial Policy, Science and Technology, Innovation, and Quantum Computers
- Political Geography:
- China, Asia, and Indo-Pacific
114. The Sky Is Not the Limit. Geopolitics and Economics of the New Space Race
- Author:
- Alessandro Gili
- Publication Date:
- 01-2024
- Content Type:
- Special Report
- Institution:
- Italian Institute for International Political Studies (ISPI)
- Abstract:
- Space is a contested domain for its very nature and today it is evidently becoming an increasingly important enabler of economic and military power. An increasing number of actors, infrastructures and technologies deployed in space also raises concerns for safety and security, especially in cyberspace. Many countries are striving to achieve space capabilities and autonomous access to space, and this is having a tremendous geopolitical impact, especially since space is emerging as an increasingly critical military and strategic domain. The development of the new space economy, which is increasingly involving the private sector and many industrial actors and services, will also be a game changer for the international economy. The space race likewise implies disruptive technologies that could contribute massively to the energy and digital transitions, accelerating solutions that could benefit humanity. A new international governance system for space is therefore needed urgently, considering that the current rules are no longer able to respond to a sector evolving at such a rapid pace. Which actors are leading the race? Which economic sectors could benefit the most and what could the new space economy mean for the world? How is space emerging as a military domain against a backdrop of increasing international tensions? What would a new system of global governance for space look like?
- Topic:
- Economics, Politics, Infrastructure, Geopolitics, Regulation, and Energy Security
- Political Geography:
- Russia, China, Europe, India, Italy, Global Focus, United States of America, and Space
115. Unpacking China’s industrial policy and its implications for Europe
- Author:
- Alicia Garcia-Herrero and Robin Schindowski
- Publication Date:
- 05-2024
- Content Type:
- Working Paper
- Institution:
- Bruegel
- Abstract:
- China is often credited with a successful application of industrial policy. One important particularity of China’s industrial policy is that it aims at levelling the playing field between the state economy and the private economy in access to finance, yet within a framework of strategic goals. This aim is not relevant for market economies, such as those of the European Union, but only for those where state enterprises are clearly privileged. Notwithstanding the difficulties in making valid comparisons, our analysis of how China conducts industrial policy in a variety of sectors points to success in some sectors but not all. More importantly, productivity growth in China has already been declining for two decades. Given the very large resources that China has put into industrial policy, with subsidies being only one part, it is surprising that success is not more evident. This relates partly to factors including cronyism and regional protectionism. While the former might be less relevant for the EU given the different institutional background, the latter certainly is relevant since the EU faces the potential consequences of member country-level industrial policy for its single market. A lesson from China seems to come from the sectoral focus, with a long-term and economic-security mindset. The EU is far from this, but it is in the process of linking economic security to industrial policy. Finally, responding to China’s industrial policy involves diverse investigations and challenges in measuring subsidies accurately. Understanding China’s very diverse and complex approach to helping companies achieve the government’s industrial policy goals is crucial for anticipating the consequences of China’s actions. These could be positive, such as cheaper imports of green technology, or negative, such as Chinese overcapacity spilling over to the EU single market.
- Topic:
- Industrial Policy, Markets, European Union, and Economy
- Political Geography:
- China, Europe, and Asia
116. How to de-risk: European economic security in a world of interdependence
- Author:
- Jean Pisani-Ferry, Beatrice Weder di Mauro, and Jeromin Zettelmeyer
- Publication Date:
- 05-2024
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- Pandemic-related supply disruptions, the energy crisis provoked by Russia’s invasion of Ukraine and economic coercion by China have put economic security high on the European Union policy agenda. The question is how exactly the EU should ‘de-risk’ its external economic relationships without foregoing the benefits of trade. The standard answer is that it should identify product-level trade dependencies, mainly on the import side, and reduce them, mainly through diversification of suppliers, while otherwise maintaining maximum trade integration. This Policy Brief argues that this answer falls short. First, product-level dependencies cannot be identified reliably even with sophisticated analysis and data. As a result, both ‘missed dependencies’ and ‘false positives’ are inevitable. Second, external shocks and coercion could be propagated through exports, productive assets held abroad and financial channels as much as through imports. The analysis has five main implications Import de-risking should focus on a few product categories for which the costs of supply interruptions would be unquestionably large. This reduces false positives. De-risking and/or buffers to deal with exports and financial coercion require more attention. De-risking must be complemented by raising resilience against all shocks, whatever theirorigin. This requires a deeper and broader European single market. De-risking and resilience must be complemented by deterrence. A sufficiently high probability of chronic trade conflict – or one very large conflict – may justify reducing overall integration with a large trading partner, on both the export andimport sides. EU economic security policies have been right to emphasise the reduction of import dependence on chips and critical raw materials, and the creation of a powerful legal instrument to deter coercion (the Anti-Coercion Instrument). In most other respects, there is room for improvement.
- Topic:
- European Union, Risk, Trade, Imports, Economic Security, and Interdependence
- Political Geography:
- China and Europe
117. Global supply chains: lessons from a decade of disruption
- Author:
- Luca Léry Moffat and Niclas Poitiers
- Publication Date:
- 03-2024
- Content Type:
- Working Paper
- Institution:
- Bruegel
- Abstract:
- This paper explores both the character and impact of three recent shocks to global supply chains: the COVID-19 pandemic, the Russian invasion of Ukraine and the US-China trade war. These were large shocks which have had significant impacts on domestic and international supply chains, but these impacts have differed in their longevity, economic impact and policy responses. We show that supply chains were remarkably resilient against shocks of such magnitude. However, this resilience was also achieved thanks to the equally remarkable size and scope of policy responses and global supply chain reorganisation. We recommend that pre-emptive policies may be justified to shield households and industry from future shocks. Given the entangled nature of these shocks and that their effects continue to reverberate, we emphasise the need for extensive future research to understand the nature of these shocks and the effectiveness of policy responses.
- Topic:
- Global Markets, Trade Wars, Trade, COVID-19, Supply Chains, and Russia-Ukraine War
- Political Geography:
- China, Global Focus, and United States of America
118. Geopolitics in the Pacific Islands: Playing for advantage
- Author:
- Meg Keen and Alan Tidwell
- Publication Date:
- 01-2024
- Content Type:
- Policy Brief
- Institution:
- Lowy Institute for International Policy
- Abstract:
- Pacific Islands Countries are leveraging geopolitical rivalries to maximise their development options. But unmanaged competition for influence among key development partners can compromise good governance and privilege geopolitical posturing over local priorities. Australia, the United States, and other traditional donors can capitalise on areas of strength, such as social inclusion and regional and multilateral initiatives. Joint efforts along these lines and the pooling of resources would scale up impact and set higher accountability standards. Despite the risk that higher standards will open gaps for non-traditional donors with less burdensome criteria, there is much long-term value in traditional development partners collaborating in a “race to the top” in meeting the region’s needs.
- Topic:
- Foreign Policy, Development, Regional Cooperation, Foreign Aid, Geopolitics, and Donors
- Political Geography:
- China, Australia, Australia/Pacific, United States of America, and Pacific Islands
119. China Threats and the Exploitation of China Threats: The 2024 Taiwan General Election
- Author:
- Chin-en Wu
- Publication Date:
- 01-2024
- Content Type:
- Commentary and Analysis
- Institution:
- East Asia Institute (EAI)
- Abstract:
- The presidential and legislative elections took place in Taiwan on January 13, 2024. The Democratic Progressive Party (DPP or so-called the green camp) selected Vice President Lai Ching-te as their candidate, who also serves as the party chairman. The opposing Chinese Nationalist (Kuomintang, KMT or so-called the blue camp) nominated the incumbent mayor of New Taipei, Hou Yu-ih, for the presidential candidacy. The Taiwan People’s Party (TPP or so-called the white camp) chose its leader, former Taipei City mayor Ko Wen-je, as the presidential candidate. Despite initial plans for a joint campaign team between KMT and TPP, a final agreement was not reached. Lai’s victory marked a historic moment, representing the first time since the introduction of direct elections in 1996 that a party has won more than two consecutive presidential terms. Lai secured the presidency with 40% of the votes, followed by Hou with 34%, and Ko with 26%. Lai Ching-te and Hou Yu-yi are political figures within traditional political parties, lacking individual charisma, especially Hou Yu-yi, the former police-in-chief. Ko Wen-je, on the other hand, is a candidate with populist characteristics, appearing as a political outsider at the national level, free from the burden of past ruling records, providing an option beyond the blue-green divide. His interactive style sometimes resembles that of an internet celebrity, using straightforward language to comment on issues or point out social and political problems, in many cases without proposing feasible solutions to these problems. Young people prefer Ko’s relaxed, somewhat sarcastic way of communication. The other part of the general election is the legislative election. DPP gained 51 seats out of 113 seats and lose its majority in the parliament. KMT won 52 seats and become the largest party. TPP gained eight seats. The result makes the new DPP government a minority government.
- Topic:
- Elections, Domestic Politics, and Cross-Strait Relations
- Political Geography:
- China, Taiwan, and Asia
120. Climate Change in China’s Governance: Agenda, Agents, and International Collaboration
- Author:
- Guoguang Wu
- Publication Date:
- 06-2024
- Content Type:
- Special Report
- Institution:
- Asia Society
- Abstract:
- China is the world's leading emitter and a key player in the international community's fight against climate change, but its climate action remains underpinned by a black box of policies, actors, and international influences. As China accelerates action to achieve domestic and international climate goals, it is more important than ever to detangle these webs and peer into the black box, to develop an understanding of what motivates China's decision-makers and how climate policy choices are made. In this insightful new report, Climate Change in China’s Governance: Agenda, Agents, and International Collaboration, Asia Society Policy Institute’s Center for China Analysis Senior Fellow on Chinese Politics Guoguang Wu conducts an in-depth investigation of China’s climate-related policies, politics, governance, and international relations. He finds that the Xi Jinping administration has paid special attention to climate action by advancing the green technology revolution and reducing energy dependence. However, at the same time, there are signs that China may be relaxing rather than strengthening its climate commitment. By conducting a deep dive into the evolving political actors and departments working on China’s climate agenda, Guoguang finds that ultra-concentrated political power and fragmented governance under Xi and the Chinese Communist Party pose obstacles to China’s climate action over the next five years.
- Topic:
- International Relations, Climate Change, Governance, and Green Technology
- Political Geography:
- China and Asia