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161. China Maritime Report No. 31: China's Submarine Industrial Base: State-Led Innovation with Chinese Characteristics

Author:
Sarah Kirchberger
Publication Date:
09-2023
Content Type:
Special Report
Institution:
China Maritime Studies Institute, U.S. Naval War College
Abstract:
In recent years, China’s naval industries have made tremendous progress supporting the modernization of the People’s Liberation Army Navy (PLAN) submarine force, both through robust commitment to research and development (R&D) and the upgrading of production infrastructure at the country’s three submarine shipyards: Bohai Shipyard, Huludao; Wuchang Shipyard, Wuhan; and Jiangnan Shipyard, Shanghai. Nevertheless, China’s submarine industrial base continues to suffer from surprising weaknesses in propulsion (from marine diesels to fuel cells) and submarine quieting. Closer ties with Russia could provide opportunities for China to overcome these enduring technological limitations by exploiting political and economic levers to gain access to Russia’s remaining undersea technology secrets.
Topic:
Nuclear Weapons, Navy, Industry, Submarines, and People's Liberation Army (PLA)
Political Geography:
China and Asia

162. The Maritime Fulcrum of the Indo-Pacific: Indonesia and Malaysia Respond to China’s Creeping Expansion in the South China Sea

Author:
Scott Bentley
Publication Date:
01-2023
Content Type:
Book
Institution:
China Maritime Studies Institute, U.S. Naval War College
Abstract:
China now is attempting to expand its control to the southernmost extent of its nine-dash-line claim in the South China Sea, in waters ever closer to Indonesian and Malaysian shores. This area of the South China Sea, spanning from Indonesia’s Natuna Islands to the South Luconia Shoals, has greater strategic importance than the Spratly or Paracel Island chains farther to the north. Whereas the Spratlys have for centuries been regarded as “dangerous ground” and commercial mariners have avoided them, the vital sea lines of communication (SLOCs) connecting the Pacific and Indian Oceans flow through this part of the southern South China Sea. Therefore, these areas are far more vital to international commerce and navigation than the dangerous grounds closer to China’s Spratly Islands outposts.
Topic:
Territorial Disputes, Armed Forces, Maritime, Commerce, and Expansion
Political Geography:
China, Indonesia, Malaysia, Asia, Indo-Pacific, and South China Sea

163. Space: America's New Strategic Front Line

Author:
Henry D. Sokolski
Publication Date:
10-2023
Content Type:
Book
Institution:
Nonproliferation Policy Education Center
Abstract:
Last week, the Congressional Commission on the Strategic Posture of the United States released its final report. Although Congress tasked it to assess the role of space systems in America’s strategic posture, the commission dedicated less than a half-page of its 160-page review to this matter. Of its 20 pages of specific recommendations, the commission made none on space. This seems odd. As China and Russia build up their nuclear arsenals well beyond what America has deployed, the cost and impracticality of quantitatively countering these threats only grows. The commission report rightly recommends the United States make its strategic nuclear forces less vulnerable to a potential first strike. But what of the argument that to do this America and its allies must be able to stun or disable its adversaries’ military eyes, ears, voices, and nervous systems both on Earth and in space? Those who argue this maintain that if America commands space, it can be assured of victory in war and, better yet, be able to deter conflicts. Does it follow that if America and its allies lose assured command of space, acquiring more and better nuclear weapons may be for naught? What does securing command of space demand? What would it enable our military to do? What space capabilities are our key space adversary — China — and our key Asian allies—Japan and South Korea — planning to employ? What will implementing America’s current space strategy entail and cost? What might alternatives to this strategy entail? Which, if any, space capacities and military actions does the Outer Space Treaty (to which Russia, China, the United States, and most states in Asia and Europe are parties) allow or prohibit? Can these limits be enforced? What can space war simulations do to help get the answers? NPEC commissioned some of the nation’s top military and legal space experts to examine these issues. It then held a series of space simulations to test their answers out. The result, which my staff and I are releasing today, is a 354-page volume, Space: America’s New Strategic Front Line (introduction below). It features insights from space policy experts and practitioners and more than suggests that strategic deterrence will depend on securing space superiority.
Topic:
Security, Defense Policy, Nuclear Weapons, Nonproliferation, and Space
Political Geography:
Russia, Japan, China, South Korea, North America, and United States of America

164. SOVEREIGNTY OVER THE PARACEL ISLANDS IN 1884-1945: AN APPROACH FROM THE RIVALRY BETWEEN FRANCE, CHINA, AND JAPAN

Author:
Quyet Luu and Nguyet Nguyen
Publication Date:
07-2023
Content Type:
Journal Article
Journal:
Journal of Liberty and International Affairs
Institution:
Institute for Research and European Studies (IRES)
Abstract:
The Paracel Islands are situated in the South China Sea geographic center and have an important strategic location for the military and the economy. Since 1884, France has represented the Vietnamese state as a protectorate to manage the archipelago. In the context of France seeking to expand its influence into the Asia-Pacific region, disputes over sovereignty over the Paracel Islands occurred during the colonial period between France (representing Vietnam), China, and Japan. The article aims to analyze the importance of the Paracel Islands in the policies of France, China, and Japan in general. Moreover, the specific activities of France in the struggle with China and Japan to affirm and protect sovereignty over the Paracel Islands would also be analyzed. Based on primary and secondary data, along with historical research methods, research methods in international relations, and other interdisciplinary research strategies, the article concludes that the Paracel Islands play an important role in the strategies of France, China, and Japan. Hence, the Paracel issue in this period has gone beyond the framework of traditional territorial disputes, becoming "internationalization” with consequences that persist to the present day. France's policy to exploit and administer the Paracel Islands was persistent, thorough, and systematic in the military, economic, political, and diplomatic spheres.
Topic:
Diplomacy, Sovereignty, History, Territorial Disputes, and Internationalization
Political Geography:
Japan, China, France, Asia-Pacific, South China Sea, and Paracel Islands

165. CHINA-INDIA COUNTERBALANCING MEASURES THROUGH INTERNATIONAL CORRIDORS AND PORTS: THE FOCUS ON CHABAHAR AND GWADAR PORTS

Author:
Kashif Hasan Khan and Ali Omidi
Publication Date:
07-2023
Content Type:
Journal Article
Journal:
Journal of Liberty and International Affairs
Institution:
Institute for Research and European Studies (IRES)
Abstract:
Beijing and New Delhi, as new world emerging powers, despite border skirmishes, have not considered themselves arch-rivals. Still, the necessities of real politics have forced India to take counter-measures towards China’s grand connectivity strategy in the framework of BRI and the Maritime Silk Road. This article assumes that China’s grand connectivity strategy has not targeted India in particular, but unavoidably it has affected India’s strategic interests in the Indian Ocean and Eurasia. In a qualitative and case study methodology, this research explains China’s grand connectivity strategy and how it affects Indian strategic interests. It also elaborates on India’s counter-measures vis-à-vis China policy. It concluded that the Chinese connectivity strategy has affected Indian strategic interests in the Indian Ocean and Eurasia. Therefore, Chabahar, Gwadar ports, and Malacca Strait are centers of gravity in these great connectivity rivalries.
Topic:
Foreign Policy, Belt and Road Initiative (BRI), Silk Road, Port, and Strategic Interests
Political Geography:
China and India

166. THE IMPACT OF COLLECTIVE MEMORY ON THAILAND’S INVOLVEMENT IN THE BELT AND ROAD INITIATIVE

Author:
Sanyarat Meesuwan
Publication Date:
07-2023
Content Type:
Journal Article
Journal:
Journal of Liberty and International Affairs
Institution:
Institute for Research and European Studies (IRES)
Abstract:
This study uses the theory of collective memory in international politics to examine the connection between collective memory and foreign policy to investigate why the Belt and Road Initiative has witnessed slow progress in Thailand. Qualitative data were gathered from various sources, including books, newspapers, journals, policy documents, and textbooks. The study concludes that cooperation between states is essential for achieving shared objectives but is contingent upon establishing mutual trust. Collective memories that one country maintains concerning another country can influence mutual understanding and trust, becoming ingrained even if the situation responsible for the memories changes or no longer exists. In the case of Thailand and China, the Thai government’s push for the high-speed rail project faced criticism and concerns due to the public’s deep-seated fears and distrust of China, the result of historical events and past experiences. This paper’s findings highlight the state’s role in creating collective memory and otherness, recognizing that external variables such as major power activities play a significant role.
Topic:
Foreign Policy, International Cooperation, Belt and Road Initiative (BRI), and Collective Memory
Political Geography:
China, Thailand, and Southeast Asia

167. Time to say goodbye? The impact of environmental regulation on foreign divestment

Author:
Haiou Mao, Holger Görg, and Guopei Fang
Publication Date:
09-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
We look at divestments by foreign firms – a topic that has received comparatively little attention in the literature – and investigate how changes in the regulatory environment in the host country may impact on such divestment decisions. We use the implementation of China’s Two Control Zone (TCZ) policy as a “quasi-natural experiment”, using detailed firm level combined with city level data for the empirical analysis. Our results show that the implementation of TCZ policy has led to higher probabilities of divestments by foreign firms in targeted TCZ cities and industries. The mechanism behind this seems to be a TCZ-induced increase in discharge fees and efforts to reduce SO2 emissions. Allowing for heterogeneity of effects, we find that the effect is particularly strong for firms from source countries with less stringent environmental regulation, and those using less advanced technology. We furthermore show that firms using intermediates from polluting industries also experience a higher probability of divestment.
Topic:
Climate Change, Environment, Foreign Direct Investment, Regulation, Business, and Divestment
Political Geography:
China and Asia

168. China as an International Lender of Last Resort

Author:
Sebastian Horn, Bradley C. Parks, Carmen M. Reinhart, and Christoph Trebesch
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper shows that China has launched a new global system for cross-border rescue lending to countries in debt distress. We build the first comprehensive dataset on China’s overseas bailouts between 2000 and 2021 and provide new insights into China’s growing role in the global financial system. A key finding is that the global swap line network put in place by the People’s Bank of China is increasingly used as a financial rescue mechanism, with more than USD 170 billion in liquidity support extended to crisis countries, including repeated rollovers of swaps coming due. The swaps bolster gross reserves and are mostly drawn by distressed countries with low liquidity ratios. In addition, we show that Chinese state-owned banks and enterprises have given out an additional USD 70 billion in rescue loans for balance of payments support. Taken together, China’s overseas bailouts correspond to more than 20 percent of total IMF lending over the past decade and bailout amounts are growing fast. However, China’s rescue loans differ from those of established international lenders of last resort in that they (i) are opaque, (ii) carry relatively high interest rates, and (iii) are almost exclusively targeted to debtors of China's Belt and Road Initiative. These findings have implications for the international financial and monetary architecture, which is becoming more multipolar, less institutionalized, and less transparent.
Topic:
Debt, Emerging Markets, International Trade and Finance, Financial Crisis, Belt and Road Initiative (BRI), and Sovereign Debt
Political Geography:
Africa, China, and Asia

169. The changing dynamics of the G7, G20 and BRICS: Informal multilateral cooperation is increasingly important in an era of strategic competition

Author:
Juha Jokela and Alana Saul
Publication Date:
04-2023
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
Increasing strategic competition among major powers has had a negative effect on the efficacy of formal multilateral cooperation. This has also been reflected in informal forums such as the G7, G20 and BRICS. Yet some new dynamics have emerged. Since Russia was excluded from the G8 in 2014, the G7 has become a key forum for Western cooperation. Russia’s full-scale invasion of Ukraine has further geared the group towards a stronghold of Western economies and democracies. The BRICS group has continued to meet at leaders’ level, and has consolidated its position. Despite variation in its members’ interests, the group aims to balance the G7, and its importance for China and Russia has been elevated. Currently, the G20 constitutes a forum in which strategic competition can potentially be managed. Along with the G7 and BRICS countries, other powers play an increasingly notable role. The dynamics of the group also displays an increasing “Southernization” of informal multilateral cooperation.
Topic:
European Union, Democracy, Multilateralism, and Strategic Competition
Political Geography:
Russia, China, Europe, Asia, and United States of America

170. Enhancing small state preparedness: Risks of foreign ownership, supply disruptions and technological dependencies

Author:
Mikael Mattlin, Shaun Breslin, Elina Sinkkonen, Liisa Kauppila, and Annika Björkdahl
Publication Date:
08-2023
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
The post-Cold War liberalist view, according to which interdependences supported a virtuous cycle of mutual gains, has given way to a realist-tinged view that regards economic interdependence as a cause of insecurity and an element in conflicts. In this new environment of increasing great power competition and technological decoupling, all states are not created equal. Major states such as the United States and China can be system shapers, whereas small states tend to be system takers. Unlike smaller states, they have a greater ability to use their investment leverage, supply chain dominance and control of core technologies. For smaller states with open economies, such as Finland and Sweden, these capabilities of major powers create vulnerabilities in the form of security risks of foreign ownership, supply disruptions and critical technological dependencies. The report explores how small states can mitigate such risks. A series of innovative Delphi backcasting exercises in Finland and Sweden brought together 113 sectoral experts and generalists to ponder ways to prevent dystopian scenarios from unfolding. The target years of the scenarios extended from 2027 to 2035, encouraging ideas on both short- and longer-term solutions. Instead of aiming for a consensus of expert views, the process sought to produce a variety of effective means and measures that a small state could choose to adopt. The exercise consisted of nine scenarios, presented as comic art. The narratives on the risks of foreign ownership focused on 1) acquisitions of gaming companies gathering personal data, 2) transfers of real estate ownership in Lapland and 3) venture capital investments in emerging technology start-ups. The scenarios on supply disruptions dealt with 4) discriminatory practices limiting access to antibiotics, 5) political retaliation limiting access to water treatment components and 6) sanctions on wind power materials, components and minerals. As for high technology dependencies, the cases included 7) the maintenance of military technology, 8) the cybersecurity of health technology and 9) the supply of chemicals for research and development activities. According to the report, small states have the least leeway in navigating the risk environments created by technological dependencies, whereas the toolkits to tackle the potential dangers of foreign ownership and supply disruptions are more extensive. Although different issues and insecurities require different bespoke solutions, all the risk categories call for active mitigation efforts. Most of the suggested Finnish and Swedish expert solutions can be clustered into three alternative approaches: protectionist/interventionist, liberal and technologically oriented. Protectionist/interventionist solutions would expand the state’s powers in controlling, guiding and limiting economic activities. Key suggestions included: covering acquisitions and greenfield investments in national foreign direct investment screening screening real estate acquisitions with a wide range of countries of origin imposing country-specific limitations to real estate acquisitions screening venture capital investments in emerging technologies initiating a national security act to limit foreign control rapidly imposing country- and company-specific limitations to bids in critical industries increasing tariffs supporting domestic or EU-level production through subsidies and industrial policy friendshoring the production of critical goods expanding the scope of supply stockpiling in pharmaceuticals and water treatment components The more liberal approach towards national preparedness would focus on solving the challenges primarily through carrots instead of sticks – to avoid limiting entrepreneurial freedoms and interfering with the dynamics of the capitalist market economy. The proposed solutions included: initiating value debates to guide individuals’ choices when accepting investments formulating a national innovation strategy to boost domestic companies’ operating conditions in emerging technology fields teaching “technology literacy” to guide the use of foreign-owned products engaging all stakeholders in making decisions on foreign ownership diversifying the sources of critical goods such as antibiotics enhancing awareness of risks and making “plan Bs” in supply chain management deepening the EU’s single market to offer genuine scalability opportunities for start-ups The third, more technologically oriented approach would rely on new innovations or technical solutions to enhance small state preparedness. Key ideas included: innovating new medicines to replace antibiotics prioritising non-conventional technologies such as small modular reactors (SMRs) enhancing domestic capacity to produce key components with 3D printing researching alternative materials to replace critical chemicals developing the recycling, recovery and transportation of critical chemicals adopting geofencing and coding solutions to enhance cybersecurity designating emerging technologies as focus areas in higher education increasing the adaptability of technical solutions through standardisation These three approaches prioritise different key solutions for enhancing small state preparedness. However, they represent generic policy preferences rather than ready-made policy recommendations. Ideally, states can formulate their own pick-and-mix toolkit by combining elements from the different approaches. The complementary nature of some of the expert views was also suggested by the fact that many – even most – respondents argued for diversification as a solution to various challenges. For example, and regardless of the chosen strategy, tendering rules could be improved by placing quality over price, taking geopolitical risks into account and allowing multiple winners in contrast to the currently dominant winner-takes-it-all logic, which leads to overly concentrated supply chains. Moreover, at least minor legislative tightenings were widely proposed to be made on foreign ownership – especially with regard to that of nationals of authoritarian states. These changes were, however, typically proposed to be complemented with such balancing acts as long-term leases and incentives to develop and acquire domestic products and companies. Ultimately, by highlighting alternative approaches to small state preparedness, this report seeks to encourage democratic discussion on a broader political choice: what type of state and economy do we want in the future? It is not only their identity that guides what states do; adopted policies and means also shape state identities over time.
Topic:
Security, Science and Technology, Supply, and Geoeconomics
Political Geography:
China, Finland, Asia, Sweden, and United States of America