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- Author: Scott Lincicome
- Publication Date: 01-2021
- Content Type: Journal Article
- Journal: The Cato Journal
- Institution: The Cato Institute
- Abstract: Labor market and cultural disruptions in the United States are real and important, as is China’s current and unfortunate turn toward illiberalism and empire. But pretending today that there was a better trade policy choice in 2000—when Congress granted China “permanent normal trade relations” (PNTR) status and paved the way for broader engagement—is misguided. It assumes too much, ignores too much, and demands too much. Worse, it could lead to truly bad governance: increasing U.S. protectionism; forgiving the real and important failures of our policymakers, CEOs, and unions over the last two decades; and preventing a political consensus for real policy solutions. Indeed, that is happening now.
- Topic: International Relations, Economics, Markets, Bilateral Relations, Trade, Protectionism
- Political Geography: China, Asia, North America, United States of America
- Author: Kam Hon Chu
- Publication Date: 01-2021
- Content Type: Journal Article
- Journal: The Cato Journal
- Institution: The Cato Institute
- Abstract: In addition to foreign investment absorption, Hong Kong plays a pioneering role in the internationalization of the renminbi (RMB). Despite the lack of comprehensive statistics on the volume of offshore RMB transactions, Hong Kong is for sure one of the largest, if not the largest, global centers for offshore RMB businesses. According to the Triennial Central Bank Survey (BIS 2019), for instance, Hong Kong was the largest global offshore RMB foreign exchange market, with an average daily turnover of US$107.6 billion as of April 2019, considerably higher than the US$56.7 billion for London and the US$42.6 billion for Singapore.
- Topic: Economics, Markets, Investment, Financial Development
- Political Geography: China, Asia, Hong Kong
- Author: Martin Chorzempa
- Publication Date: 06-2021
- Content Type: Journal Article
- Journal: The Cato Journal
- Institution: The Cato Institute
- Abstract: Digital currency and fintech have been some of the most powerful forces for freedom and personal liberty in China for the past decade, but their future influence is uncertain. Starting as a disruptive force that gave Chinese unprecedented autonomy in their financial lives, connected either to global cryptocurrency networks or local tech ecosystems built by private firms, a new chapter is beginning. In this new era, one speech urging an emphasis on innovation instead of regulation can seemingly bring the full force of the Chinese state to bear onto a firm that once disrupted state banks with impunity. Technologies like blockchain first embraced by libertarians and cryptography enthusiasts as freeing money from dependence on the state look poised to become tools for governments to increase their ability to monitor and shape financial transactions. Meanwhile, disruptive fintech tools have become symbiotic with the major state banks, which will retain their role as the core of the financial system.
- Topic: Economics, Science and Technology, Finance, Digital Currency , Transactions
- Political Geography: China, Asia
4. Questioning Industrial Policy: Why Government Manufacturing Plans Are Ineffective and Unnecessary
- Author: Scott Lincicome, Huan Zhu
- Publication Date: 06-2021
- Content Type: Working Paper
- Institution: The Cato Institute
- Abstract: In the wake of the COVID-19 pandemic and rising U.S.-China tensions, American policymakers have again embraced “industrial policy.” Both President Biden and his predecessor, as well as legislators from both parties, have advocated a range of federal support for American manufacturers to fix perceived weaknesses in the U.S. economy and to counter China’s growing economic clout. These and other industrial policy advocates, however, routinely leave unanswered important questions about U.S. industrial policy’s efficacy and necessity: What is “Industrial Policy”? Advocates of “industrial policy” often fail to define the term, thus permitting them to ignore past failures and embrace false successes while preventing a legitimate assessment of industrial policies’ costs and benefits. Yet U.S. industrial policy’s history of debate and implementation establishes several requisite elements – elements that reveal most “industrial policy successes” not to be “industrial policy” at all. What are the common obstacles to effective U.S. industrial policy? Several obstacles have prevented U.S. industrial policies from generating better outcomes than the market. This includes legislators’ and bureaucrats’ inability to “pick winners” and efficiently allocate public resources (Hayek’s “Knowledge Problem”); factors inherent in the U.S. political system (Public Choice Theory); lack of discipline regarding scope, duration, and budgetary costs; interaction with other government policies that distort the market at issue; and substantial unseen costs. What “problem” will industrial policy solve? The most common problems purportedly solved by industrial policy proposals are less serious than advocates claim or unfixable via industrial policy. This includes allegations of widespread U.S. “deindustrialization” and a broader decline in American innovation; the disappearance of “good jobs”; the erosion of middle‐class living standards; and the destruction of American communities. Do other countries’ industrial policies demand U.S. industrial policy? The experiences of other countries generally cannot justify U.S. industrial policy because countries have different economic and political systems. Regardless, industrial policy successes abroad – for example, in Japan, Korea and Taiwan – are exaggerated. Also, China’s economic growth and industrial policies do not justify similar U.S. policies, considering the market‐based reasons for China’s rise, the Chinese policies’ immense costs, and the systemic challenges that could derail China’s future growth and geopolitical influence. These answers argue strongly against a new U.S. embrace of industrial policy. The United States undoubtedly faces economic and geopolitical challenges, including ones related to China, but the solution lies not in copying China’s top‐down economic planning. Reality, in fact, argues much the opposite.
- Topic: Government, Industrial Policy, Manufacturing, COVID-19
- Political Geography: China, Asia, North America, United States of America
- Author: Scott Lincicome
- Publication Date: 01-2021
- Content Type: Commentary and Analysis
- Institution: The Cato Institute
- Abstract: Both the American left and right often use “national security” to justify sweeping proposals for new U.S. protectionism and industrial policy. “Free markets” and a lack of government support for the manufacturing sector are alleged to have crippled the U.S. defense industrial base’s ability to supply “essential” goods during war or other emergencies, thus imperiling national security and demanding a fundamental rethink of U.S. trade and manufacturing policy. The COVID-19 crisis and U.S.-China tensions have amplified these claims. This resurgent “security nationalism,” however, extends far beyond the limited theoretical scenarios in which national security might justify government action, and it suffers from several flaws. First, reports of the demise of the U.S. manufacturing sector are exaggerated. Although U.S. manufacturing sector employment and share of national economic output (gross domestic product) have declined, these data are mostly irrelevant to national security and reflect macroeconomic trends affecting many other countries. By contrast, the most relevant data—on the U.S. manufacturing sector’s output, exports, financial performance, and investment—show that the nation’s total productive capacity and most of the industries typically associated with “national security” are still expanding. Second, “security nationalism” assumes a need for broad and novel U.S. government interventions while ignoring the targeted federal policies intended to support the defense industrial base. In fact, many U.S. laws already authorize the federal government to support or protect discrete U.S. industries on national security grounds. Third, several of these laws and policies provide a cautionary tale regarding the inefficacy of certain core “security nationalist” priorities. Case studies of past government support for steel, shipbuilding, semiconductors, and machine tools show that security‐related protectionism and industrial policy in the United States often undermines national security. Fourth, although the United States is not nearly as open (and thus allegedly “vulnerable”) to external shocks as claimed, global integration and trade openness often bolster U.S. national security by encouraging peace among trading nations or mitigating the impact of domestic shocks. Together, these points rebut the most common claims in support of “security nationalism” and show why skepticism of such initiatives is necessary when national security is involved. They also reveal market‐oriented trade, immigration, tax, and regulatory policies that would generally benefit the U.S. economy while also supporting the defense industrial base and national security.
- Topic: Defense Policy, National Security, COVID-19, Free Market, Deindustrialization
- Political Geography: China, North America, United States of America
- Author: John Mueller
- Publication Date: 05-2021
- Content Type: Commentary and Analysis
- Institution: The Cato Institute
- Abstract: China, even if it rises, does not present much of a security threat to the United States. Policymakers increasingly view China’s rapidly growing wealth as a threat. China currently ranks second, or perhaps even first, in the world in gross domestic product (although 78th in per capita GDP), and the fear is that China will acquire military prowess commensurate with its wealth and feel impelled to carry out undesirable military adventures. However, even if it continues to rise, China does not present much of a security threat to the United States. China does not harbor Hitler‐style ambitions of extensive conquest, and the Chinese government depends on the world economy for development and the consequent acquiescence of the Chinese people. Armed conflict would be extremely—even overwhelmingly—costly to the country and, in particular, to the regime in charge. Indeed, there is a danger of making China into a threat by treating it as such and by engaging in so‐called balancing efforts against it. Rather than rising to anything that could be conceived to be “dominance,” China could decline into substantial economic stagnation. It faces many problems, including endemic (and perhaps intractable) corruption, environmental devastation, slowing growth, a rapidly aging population, enormous overproduction, increasing debt, and restive minorities in its west and in Hong Kong. At a time when it should be liberalizing its economy, Xi Jinping’s China increasingly restricts speech and privileges control by the antiquated and kleptocratic Communist Party over economic growth. And entrenched elites are well placed to block reform. That said, China’s standard of living is now the highest in its history, and it’s very easy to envision conditions that are a great deal worse than life under a stable, if increasingly authoritarian, kleptocracy. As a result, the Chinese people may be willing to ride with, and ride out, economic stagnation should that come about—although this might be accompanied by increasing dismay and disgruntlement. In either case—rise or demise—there is little the United States or other countries can or should do to affect China’s economically foolish authoritarian drive except to issue declarations of disapproval and to deal more warily. As former ambassador Chas Freeman puts it, “There is no military answer to a grand strategy built on a non‐violent expansion of commerce and navigation.” And Chinese leaders have plenty of problems to consume their attention. They scarcely need war or foreign military adventurism to enhance the mix. The problem is not so much that China is a threat but that it is deeply insecure. Policies of threat, balance, sanction, boycott, and critique are more likely to reinforce that condition than change it. The alternative is to wait, and to profit from China’s economic size to the degree possible, until someday China feels secure enough to reform itself.
- Topic: Government, GDP, Geopolitics, Economic Growth
- Political Geography: China, Asia, United States of America
- Author: Vijay Gokhale
- Publication Date: 03-2021
- Content Type: Working Paper
- Institution: Carnegie Endowment for International Peace
- Abstract: China and India struggle to comprehend each other’s international ambitions. The misperceptions that follow lead to a lack of trust, border skirmishes, and potentially worse. On June 15, 2020, Indian and Chinese troops engaged in a brawl that left twenty Indian soldiers dead while causing an unspecified number of Chinese casualties. The clash is a part of a broader border standoff along the Galwan River between the two forces on the Line of Actual Control that is yet to be resolved. The Indian strategic community is broadly in agreement that this border dispute marks an implacable decline in India-China ties. They argue that the very basis of relations that emerged after former Indian prime minister Rajiv Gandhi’s visit to Beijing in 1988 has been shaken, if not destroyed. Yet, how did the two countries manage to reach this nadir in ties, and furthermore, what does the Galwan clash signify for the future of Sino-Indian relations? This paper argues that, long before the present border dispute occurred, Sino-Indian relations had been steadily declining due to rampant misperceptions of the other side, contributing to a lack of trust. The most fundamental misperception between the two countries is the inability to comprehend each other’s international ambitions, yielding the fear that their foreign policies are targeted against the other. This paper traces the impact and development of these misperceptions on Sino-Indian ties through three different phases before considering the future of the relationship after the Galwan dispute.
- Topic: Foreign Policy, Bilateral Relations, Territorial Disputes, Borders
- Political Geography: China, South Asia, India, Asia
- Publication Date: 04-2021
- Content Type: Working Paper
- Institution: Carnegie Endowment for International Peace
- Abstract: During the pandemic, Chinese medical and equipment supplies to Chile have come mostly from a diverse cast of Chinese players with local experience in Chile. They adapted to Chile’s unique system of emergency and disaster management. 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: Diplomacy, Disaster Relief, Health, Pandemic, COVID-19
- Political Geography: China, Asia, South America, Chile
- Author: Chunbing Xing
- Publication Date: 06-2021
- Content Type: Working Paper
- Institution: United Nations University
- Abstract: This paper examines the evolution of China’s industrial and occupational structure in the last two decades and its impact on wage inequality. We find that non-routine cognitive and interpersonal tasks have increased, while routine cognitive tasks first increased and then declined. Occupation structural change is accompanying rising wage inequality. The wage premium for educated workers rose sharply in the 1990s and remained high thereafter. Occupations with high routine task intensity are associated with lower wages. While the return to education has become the largest contributor to wage inequality, routine task intensities have yet to play a significant role.
- Topic: Education, Labor Issues, Employment, Inequality, Work Culture
- Political Geography: China, Asia
- Author: Lane Burdette
- Publication Date: 05-2021
- Content Type: Journal Article
- Journal: Journal of Public and International Affairs (JPIA)
- Institution: School of Public and International Affairs, Princeton University
- Abstract: Submarine cables are critical infrastructure that carry nearly all internet traffic. However, unclear international governance does not always guarantee their protection, leaving global information networks vulnerable to sabotage and espionage. China’s access to submarine cables for strategic manipulation is greatly expanded through the Digital Silk Road and territorial claims in the South China Sea, posing a clear threat that requires a U.S. response. Current U.S. policy is uncoordinated and can be sorted into the isolationist, cooperative, competitive, and militaristic responses, which each present unique frameworks for future action. The isolationist response would disconnect the United States from insecure cable networks, limiting China’s influence over U.S. assets but reducing international connectivity. The cooperative response emphasizes international norms-setting processes to achieve multilateral agreements protecting cables from state influences. The competitive response advocates U.S. competition with China in the submarine cable market through alternate assistance programs, which would increase the redundancy of a secure network. Finally, the militaristic response explores the role of America’s military in defending submarine cables from foreign exploitation. This article recommends that future policy emphasize a combination of the competitive and militaristic responses in order to most immediately and effectively address China’s threat to information security along submarine cables while minimizing U.S. risk.
- Topic: International Relations, Politics, Governance, Military Affairs
- Political Geography: China, North America, Asia-Pacific, United States of America
- Author: Nicola De Blasio, Fridolin Pflugmann
- Publication Date: 05-2021
- Content Type: Policy Brief
- Institution: Belfer Center for Science and International Affairs, Harvard University
- Abstract: President Xi Jinping’s pledge during the 2020 United Nations General Assembly, that China would reach peak carbon dioxide emissions by 2030 and achieve carbon neutrality before 2060, is a significant step in the fight against climate change. Since China is the world’s top contributor of greenhouse gases, there is no doubt that Beijing needs to be front and center of any effort to curb global emissions. In 2019, China accounted for almost 30 percent of global emissions, about twice as much as the second largest emitter, the United States.1 But while U.S. emissions have been on an overall decline since 2007,2 China’s have increased, raising concerns over whether Beijing can actually deliver on its targets. This reality should not distract from the fact that China is also the world’s top developer of renewables and other clean energy technologies. For example, China was the world’s largest installer of photovoltaics (PV) by 2013 and, in less than two years, also became the global leader in solar module manufacturing. At the same time, China leveraged its industrial might and economies of scale to drive down modules’ costs—which, by the end of 2018, were 90 percent lower than only ten years before. In this context, renewable hydrogen could significantly accelerate China’s transition to a low-carbon economy, increasing the likelihood of meeting its carbon neutrality goal. Renewable hydrogen offers significant advantages for China. It can help Beijing meet its climate and pollution goals—at a time when coal continues to dominate—while avoiding increased reliance on imported fuels. As a readily dispatchable means of storing energy, hydrogen can help to address intermittency and curtailment issues as renewable energy increases its share of China’s energy mix. As a sustainable mobility energy carrier, it can power fuel-cell electric vehicles or be the base for synthetic fuels. Finally, renewable hydrogen can open new avenues for developing clean technology manufactured goods for both internal and export markets. Today, most of China’s hydrogen is produced from coal via 1,000 gasifiers, accounting for 5% of the country’s total coal consumption. Hydrogen costs vary significantly as a function of production technology and prices of fossil fuels and electricity. Production from coal remains the lowest cost option: about 30 percent cheaper than hydrogen from natural gas. Therefore, reducing the carbon footprint of coal-based hydrogen will be critical in a low-carbon economy. In the medium term, coal-based hydrogen with carbon capture, utilization and storage will likely remain China’s lowest-cost clean hydrogen production pathway. Hence, the underlying question is whether Beijing will prioritize cost considerations or put its full industrial might behind the development and deployment of renewable hydrogen. In March 2019, the Chinese government took a significant step forward by announcing measures to promote the construction of hydrogen facilities for new energy vehicles. Wan Gang, who is known as China’s “father of the electric car,” called for China to “look into establishing a hydrogen society” and “move further toward fuel cells.”3 Given that Gang made a similar call two decades ago on vehicle electrification, which played a key role in China’s current battery electric vehicles market dominance, close attention is warranted.
- Topic: Security, Energy Policy, Environment, Natural Resources, Renewable Energy, Hydrogen
- Political Geography: China, Asia-Pacific
- Author: Joshua Fitt
- Publication Date: 02-2021
- Content Type: Special Report
- Institution: Georgetown Journal of International Affairs
- Abstract: Many of China’s technology companies perfect their products in the domestic market by facilitating the party-state’s oppression and data control, and subsequently seek to export the technology to fledgling authoritarian states or nations with fragile democracies. This is part of Beijing’s strategy to enhance its digital instruments of national power, normalize illiberal uses of technology, and equip foreign governments with the tools to replicate aspects of the CCP’s authoritarian governance model. If Washington wants to blunt this strategy, the US government needs to implement a comprehensive strategy of its own to address this.
- Topic: Science and Technology, Governance, Law, Authoritarianism, Grand Strategy, Multilateralism
- Political Geography: China, Asia, North America, United States of America
- Author: Jennifer A. Hillman, David Sacks
- Publication Date: 03-2021
- Content Type: Special Report
- Institution: Council on Foreign Relations
- Abstract: The Belt and Road Initiative (BRI), Chinese President Xi Jinping’s signature foreign policy undertaking and the world’s largest infrastructure program, poses a significant challenge to U.S. economic, political, climate change, security, and global health interests. Since BRI’s launch in 2013, Chinese banks and companies have financed and built everything from power plants, railways, highways, and ports to telecommunications infrastructure, fiber-optic cables, and smart cities around the world. If implemented sustainably and responsibly, BRI has the potential to meet long-standing developing country needs and spur global economic growth. To date, however, the risks for both the United States and recipient countries raised by BRI’s implementation considerably outweigh its benefits. BRI was initially designed to connect China’s modern coastal cities to its underdeveloped interior and to its Southeast, Central, and South Asian neighbors, cementing China’s position at the center of a more connected world. The initiative has since outgrown its original regional corridors, expanding to all corners of the globe. Its scope now includes a Digital Silk Road intended to improve recipients’ telecommunications networks, artificial intelligence capabilities, cloud computing, e-commerce and mobile payment systems, surveillance technology, and other high-tech areas, along with a Health Silk Road designed to operationalize China’s vision of global health governance.1 Hundreds of projects around the world now fall under the BRI umbrella.
- Topic: International Trade and Finance, Infrastructure, Hegemony, Conflict, Belt and Road Initiative (BRI), Regionalism
- Political Geography: China, Asia, North America, United States of America
- Author: Malcolm Cook
- Publication Date: 05-2021
- Content Type: Policy Brief
- Institution: Lowy Institute for International Policy
- Abstract: China will not agree to a South China Sea Code of Conduct (COC) that is consistent with the 2016 South China Sea arbitral tribunal ruling, and therefore any COC which China agrees with the Association of Southeast Asian Nations (ASEAN) will harm Australia’s interests. But a lack of Australian support for such a Code would aggravate relations with Southeast Asian states and ASEAN, and with China. Australia should use the time afforded by the drawn-out Code of Conduct negotiations to coordinate with the five littoral Southeast Asian states affected by China’s unlawful maritime claims. Australia should emphasise the need for consistency with international law, especially the 2016 arbitral ruling. The Biden administration is likely to increase pressure on Australia to conduct freedom of navigation operations (FONOPS) in the South China Sea. Such action may risk a significant Chinese response against Australia.
- Topic: Foreign Policy, Territorial Disputes, Maritime, Alliance, Freedom of Movement
- Political Geography: China, Australia, Southeast Asia, Asia-Pacific, United States of America, South China Sea
- Author: Claire Young
- Publication Date: 02-2021
- Content Type: Policy Brief
- Institution: Lowy Institute for International Policy
- Abstract: Australia’s interests in Antarctica are better served by the Antarctic Treaty System (ATS) than anything we could negotiate today. We should redouble our commitment to its ideals of science-driven, rules-based management — and counter the narrative of ATS ‘failure’. China is pushing the boundaries of ATS practice by exploiting fisheries and tourism, and probably seeking access to Western technologies in Antarctica. And in the future, Beijing could lead a coalition of states seeking mineral riches that only China is likely to be capable of retrieving. Australia should watch China’s activities closely, but react cautiously. We should be wary of false analogies with the Arctic and not overreact to marginal military developments. We should shield the ATS from Australia–China tension and US–China competition.
- Topic: Science and Technology, Treaties and Agreements, Natural Resources, Tourism, Geopolitics, Fishing, Coalition
- Political Geography: China, Asia, Australia, Arctic
- Author: Yang Jiang
- Publication Date: 04-2021
- Content Type: Policy Brief
- Institution: Lowy Institute for International Policy
- Abstract: Almost every governmental policy decision made today has a China angle, and building understanding of China has become more pressing for Australian policymaking than ever. Despite the urgent demand within the Australian public service for China expertise and language skills, the existing skills of many Chinese-Australians are being overlooked. Australia has a significant, diverse, and growing population of Chinese-Australians, but they are underrepresented and underutilised in the public service. A better harnessing of the skills and knowledge of this community — including via improved recruitment processes, better use of data, skills-matching, and reviewing and clarifying security clearance processes and requirements — would have substantial benefits for Australian policymaking in one of its most important bilateral relationships.
- Topic: Foreign Policy, Government, Bilateral Relations, Public Service
- Political Geography: China, Asia, Australia
- Author: Richard McGregor, Jude Blanchette
- Publication Date: 04-2021
- Content Type: Special Report
- Institution: Lowy Institute for International Policy
- Abstract: After more than eight years in office, Xi Jinping has made himself into China’s most powerful leader since Deng Xiaoping, but in doing so, Xi has destabilised elite politics and demolished the power sharing norms that evolved since the 1980s. By removing de jure and de facto term limits on the most senior position of power, and thus far refusing to nominate his successor, Xi has solidified his own leadership position but potentially pushed the country towards a destabilising succession crisis. There are various scenarios for what happens after Xi, ranging from a peaceful transfer of power to a split at the top if he is forced out of office in a coup or by illness or death.
- Topic: Leadership, Domestic politics, Xi Jinping
- Political Geography: China, Asia
- Author: Arzan Tarapore
- Publication Date: 05-2021
- Content Type: Commentary and Analysis
- Institution: Lowy Institute for International Policy
- Abstract: The still-unresolved Ladakh crisis has created a new strategic reality for India, marked by renewed political hostility with China, and an increased militarisation of the Line of Actual Control. This new strategic reality imposes unequal costs on India and China. India is likely to defer much-needed military modernisation and maritime expansion into the Indian Ocean — which would impair its ability to compete strategically with China. In contrast, China incurred only marginal material costs; it was probably more concerned with the prospect of continued deterioration in its relationship with India. Even that cost was more threatened rather than realised, and largely reduced when the disengagement plan was agreed.
- Topic: Crisis Management, Strategic Competition, Militarization, Disengagement
- Political Geography: China, South Asia, India, Asia
- Author: Patrick Porter, Michael Mazarr
- Publication Date: 05-2021
- Content Type: Commentary and Analysis
- Institution: Lowy Institute for International Policy
- Abstract: There is a growing bipartisan consensus in Washington on a tighter embrace of Taiwan, which may soon become a stronger implied US commitment to go to war in the event of a Chinese invasion. Taiwan matters to US security and the regional order, and the United States should continue to make clear that aggression is unacceptable. But those advocating a stronger US security commitment exaggerate the strategic consequences of a successful Chinese invasion. The stakes are not so high as to warrant an unqualified US pledge to go to war. American decision-makers, like their forebears confronting the seeming threat of communism in Indochina, may be trapping themselves into an unnecessarily stark conception of the consequences of a successful Chinese invasion of Taiwan. It would be irresponsible for the United States to leave itself no option in the event of Chinese aggression other than war. But nor should Washington abandon Taiwan. There is a prudent middle way: the United States should act as armourer, but not guarantor. It should help prepare Taiwan to defend itself, to raise costs against aggression, and develop means of punishing China with non-military tools.
- Topic: Conflict Prevention, Foreign Policy, Territorial Disputes, Crisis Management
- Political Geography: China, Taiwan, Asia, United States of America
- Author: Greg Raymond
- Publication Date: 06-2021
- Content Type: Commentary and Analysis
- Institution: Lowy Institute for International Policy
- Abstract: China has land borders with mainland Southeast Asia and strong strategic imperatives to develop land routes to the sea. It has both potential and motivation to pursue an infrastructural sphere of influence in the Mekong subregion through Belt and Road Initiative (BRI) projects joining southern China and mainland Southeast Asia. The poorer states, especially Laos and Cambodia, have been receptive to the BRI and infrastructure investment, but Thailand and Vietnam, strong states and protective of sovereignty, have been more cautious. This means China’s impact is significantly varied across the subregion. China’s Special Economic Zones (SEZs) in Cambodia, Laos, and Myanmar are in some cases dissolving borders and in others carving out Chinese-controlled enclaves, all increasing the People’s Republic of China (PRC) presence and influence.
- Topic: Infrastructure, Foreign Direct Investment, Regional Integration, Borders, Belt and Road Initiative (BRI)
- Political Geography: China, Asia, Vietnam, Cambodia, Thailand, Southeast Asia, Laos, Myanmar