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21. Revitalization of Maritime Silk Road Based on the Security Implications and Cooperation

Author:
Hamsu Abdul Gani
Publication Date:
07-2021
Content Type:
Journal Article
Journal:
AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:
Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:
The revitalization of the Silk Road as a trade route, cultural exchange, religion, science and civilization based on the “Maritime Silk Road” (MSR) is the focus of strategic studies and international relations. ASEAN countries, including Indonesia in the MSR route and the contestation of the United States and China who are fighting for dominance in the Indo-Pacific region, face challenges and opportunities. The results of this research, which uses a normative approach, show that the revitalization of the MSR may give positive impacts to China’s foreign affairs for the good interaction and communication among people by economic trade.
Topic:
Globalization, International Trade and Finance, Maritime, and Silk Road
Political Geography:
China and Asia

22. Can the Biggest Emitters Set Up a Climate Club? A Review of International Carbon Pricing Debates

Author:
Carole Mathieu
Publication Date:
06-2021
Content Type:
Special Report
Institution:
Institut français des relations internationales (IFRI)
Abstract:
The world’s largest emitting countries are reconsidering the role of carbon pricing instruments and increasingly looking at carbon border adjustment mechanisms (CBAMs) to address leakage concerns. This renewed momentum should trigger a broader discussion on how to make trade policies compatible with the climate agenda. With the Glasgow climate conference (COP26) approaching, the concept of putting a price on carbon is generating unprecedented interest in Canada and the United States (US), China and Japan. But the European Union (EU) still stands as an exception; it is the only regional trading bloc that is determined to leverage the full potential of its emissions trading system (ETS). To date, others have lacked the political backing to deploy nation-wide carbon pricing initiatives with a design sturdy enough to drive meaningful emission reductions. Canada has made significant progress with the adoption of a national framework for carbon pricing in 2018. The country’s draft regulations foresee the introduction of a federal ETS as of 2022 and a gradual increase in carbon prices, but its ambitions risk being upset by the lack of consistent efforts in the US, its largest trading partner. Given US political divides, a federal carbon pricing scheme is unlikely to materialize in the short run. In China, the long-delayed national ETS has finally been launched. However, its scope is restricted to the power sector for now, and it is likely to only have a modest impact on coal use with its current design. Several arguments may discourage China from fully extending its ETS as planned and rather argue in favor of introducing a complementary carbon tax. Japan has also engaged an expert debate on the benefits of introducing carbon pricing at the national level, but the government is struggling to find a balance between the risk of worsening competitiveness and the need to mobilize investment in clean technologies. For the EU, the upcoming reform of the EU ETS is an opportunity to introduce a truly demanding cap reduction for the 2023-2030 period and make this flagship instrument more robust, predictable, and fair. To initiate in-depth decarbonization of its industry, the EU will need to phase out free allowances. Therefore, other measures addressing unfair competition will have to be introduced and CBAM could be part of the solution. A unilateral application is however no panacea. The EU should move cautiously and start implementing the CBAM to a small set of sectors. This also means that the challenge of leveling the playing field with non-EU producers will remain largely unresolved. There is little chance that an international alliance on carbon pricing or “climate club” can be set up within a timeframe compatible with the climate emergency. Yet, the EU’s CBAM proposal can encourage trading partners to accelerate decision-making on carbon pricing, at least to obtain partial exemption. In addition, having a concrete anti-leakage proposal on the table leads to a sense of the inevitable mismatches between the global trade and climate agendas. Large emitters are starting to acknowledge the need for a multilateral discussion on how to decarbonize industries while maintaining a level playing field. The next step should be to kickstart an open discussion in all possible multilateral fora (G20, International Energy Agency, global industry associations, etc.) and mandate the World Trade Organization (WTO) to develop guidance on a wide range of instruments (including CBAM, but also eco-design labelling and standards, differentiated tariffs based on CO2 intensity, etc.) and including a common exemption approach for Least Developed Countries. Exploring a set of workable solutions should be more attractive to trade partners than pushing for a uniform solution, but results would still take time to materialize. Hence, establishing a level playing field with imports will likely require the EU – and all countries with an aggressive decarbonization agenda for their industries – to strengthen their financial and regulatory support to the deployment of innovative low-carbon manufacturing processes. Again, this almost-unavoidable resort to State aid would strongly benefit from a multilateral discussion.
Topic:
Climate Change, International Trade and Finance, European Union, Carbon Tax, and Carbon Emissions
Political Geography:
Japan, China, Europe, and Canada

23. The China-Pakistan Economic Corridor

Author:
Ali Haider Saleem and Arhama Siddiqa
Publication Date:
08-2021
Content Type:
Journal Article
Journal:
Baku Dialogues
Institution:
ADA University
Abstract:
The term Silk Road is used by scholars to describe a network of trading posts and markets linking East Asia to the Mediterranean. In terms of geographical context, the editors of Baku Dialogues define the region as the “geographic space looking west past Anatolia to the warm seas beyond; north across the Caspian towards the Great Plain and the Great Steppe; east to the peaks of the Altai and the arid sands of the Taklamakan; and south towards the Hindu Kush and the Indus valley, looping down around in the direc­tion of the Persian Gulf and across the Fertile Crescent.” States falling under this parasol include China, Pakistan, Iran, Turkey, the five Central Asian republics, Azerbaijan, and Russia. China’s Belt and Road Initia­tive (BRI), which traverses several continents, is a long‑term, strategic investment plan with the objective of facilitating economic integration of countries in line with the historic Silk Road. In April 2015, China’s President, Xi Jinping announced the China‑Pakistan Economic Corridor (CPEC), which amounts to BRI’s flagship project. This en­terprise, which encompasses road, rail, and oil pipeline links, will help Beijing advance its influence across South and Central Asia.
Topic:
Economics, International Cooperation, International Trade and Finance, Bilateral Relations, Infrastructure, and Silk Road
Political Geography:
Pakistan, China, and Asia

24. Beijing’s Long Way to the Gulf Region Oil, Security, Geopolitics

Author:
Fuad Shahbazov
Publication Date:
04-2021
Content Type:
Journal Article
Journal:
Baku Dialogues
Institution:
ADA University
Abstract:
Energy cooperation has been a key aspect of growing bilateral cooper­ation between China and the Arab states of the Gulf region for the past several years. Since 1996, China has become a net importer of crude oil and, as the second‑largest en­ergy consumer in the world after the United States, is now the third‑largest importer of oil after the United States and Japan. Therefore, it should not come as a surprise that China is eying a deep and strategic partnership with the states of a re­gion that sits on top of the world’s largest proven crude oil and natural gas reserves. The deepening political and economic cooperation between China and the member states of the Gulf Cooperation Council (GCC) has received increasing atten­tion from the region’s more estab­lished strategic players: foremost the United States, but also the UK as well as the EU and some of its member states. Indeed, the region’s apparent geopolitical challenges— such as the American withdrawal from the Middle East, the escalation of sectarian wars in the region, the outbreak and development of the Syrian conflict followed by the spread of Islamic radicalism and similar threats—have encouraged the Arab states in the Gulf (as well as Iran) to look more to the East for new reliable partners. This has pro­vided China with an opportunity to obtain a foothold in the region, which sits adjacent to the Silk Road region and is therefore of signifi­cant and lasting interest to readers of Baku Dialogues. With the rapid growth of its economy and consequent height­ened energy demands, China is viewed as a potential investor by the oil rich GCC states, each of which needs to diversify its economy. On­going Western sanctions directed against Iran also make China an attractive proposition for Tehran. Although the Chinese interest in, and policy towards, the region is increasingly complex, this new axis between the Gulf region (especially the Arab half) and China has not received much attention from the think tank and academic communities—at least in the West.
Topic:
Security, International Cooperation, International Trade and Finance, Oil, Natural Resources, Hegemony, and Energy
Political Geography:
China, Asia, and Gulf Nations

25. East Asian Integration and Its Main Challenge: NTMs in Australia, China, India, Japan, Republic of Korea, and New Zealand

Author:
Yan Lili Ing and Grace Hadiwidjaja
Publication Date:
07-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
While East Asia has been moving forward with its regional integration agenda, one main challenge remains and is growing – non-tariff measures (NTMs). Animal, vegetable, and food products tend to be more regulated than other products, largely due to quality and safety standards. NTMs affect 66%–98% of total trade in those sectors. Our paper presents the frequency index, coverage ratio, and prevalence score to measure NTMs in the region. They are highest amongst food, vegetable, and animal products; and vary amongst other products, depending on the economy. We find that the high frequency index of NTMs does not necessarily translate to a high value of coverage ratio for trade. One explanation could be that countries tend to regulate imported goods which compete with the domestic products more than imported goods which they need.
Topic:
Globalization, International Trade and Finance, Regional Cooperation, Tariffs, Non-Tariff Measures, and Economic Integration
Political Geography:
Japan, China, India, Asia, South Korea, Australia, Southeast Asia, and New Zealand

26. The EU–China Comprehensive Agreement on Investment: Lessons Learnt for Indonesia

Author:
Yan Lili Ing and Junianto James Losarili
Publication Date:
08-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The European Union (EU) and China have recently reached an agreement: the EU–China Comprehensive Agreement on Investment (CAI). As one of the most recent investment agreements concluded by the EU, the paper aims to assess specific concessions made in the agreement, and provides lessons learnt for Indonesia on the ongoing negotiations of the Indonesia–EU free trade agreement, the Comprehensive Economic Partnership Agreement (IEU CEPA). The paper will present an overview of the main areas covered under the CAI, assess the potential impacts of the CAI on EU investment into Indonesia, and set out lessons that can be learnt from the CAI.
Topic:
Economics, International Cooperation, International Trade and Finance, European Union, and Investment
Political Geography:
China, Europe, Indonesia, and Asia

27. China's Ties with Southeast Asia : From Green Shoots to Sustained Recovery

Author:
Kensuke Tanaka
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
China's rebound happened relatively quickly owing to a large extent to timely macroeconomic policy responses to the crisis. Lagging somewhat behind China, most Southeast Asian countries have now entered the transition from recession to recovery. Some export-dependent Southeast Asian countries shifted their export destination to China to benefit from its early recovery. This switch of export destination to China illustrates China's important role in leading the recovery of the region. Enhancing regional macroeconomic co-operation would help reduce vulnerability of the region and ensure a sustained recovery. Regional macroeconomic co-operation remains at an early stage in Southeast Asia, but possibilities for further co-operation should be explored.
Topic:
Development, Economics, International Cooperation, International Trade and Finance, and Economic Recovery
Political Geography:
China, Asia, and Southeast Asia

28. What Is Drawing Xi’s China and Lukashenko’s Belarus Closer?

Author:
Solomiya Kharchuk
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
Polish Political Science Yearbook
Institution:
Polish Political Science Association (PPSA)
Abstract:
What are the primary drivers of the relationship between Xi’s China and Lukashenko’s Belarus? The present research paper uses the historical process-tracing method to provide an answer to this question. Furthermore, it uses quantitative data analysis regarding the economic intercourse between Belarus and China. It examines whether China’s opposition regarding the unipolar American-led world order and Belarus’s security concerns are the primary drivers of the relationship between Minsk and Beijing. The present article concludes that the congruence of beliefs and Minsk’s desire to ensure survival are drawing the two countries closer together. China’s new strategy encompasses Beijing’s increasing participation in world affairs. China opposes the world order led by a single hegemon, the United States of America. In the interim, Belarus, a relatively weak state insignificant in the global balance of power, shares Beijing’s beliefs about the desired nature of the contemporary world order. However, the Belarusian economy’s condition, which relies heavily on external funding, does not allow the economic cooperation between Minsk and Beijing to thrive. China gradually increases its engagement with Belarus, yet it obscures its ambitions, for Minsk lies in Moscow’s sphere of influence.
Topic:
International Cooperation, International Trade and Finance, Infrastructure, Hegemony, and Belt and Road Initiative (BRI)
Political Geography:
China and Asia

29. Gains Associated with Linking the EU and Chinese ETS under Different Assumptions on Restrictions, Allowance Endowments, and international Trade

Author:
Malte Winkler, Sonja Peterson, and Sneha Thube
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Linking the EU and Chinese Emission Trading Systems (ETS) increases the cost-efficiency of reaching greenhouse gas mitigation targets, but both partners will benefit – if at all – to different degrees. Using the global computable-general equilibrium (CGE) model DART Kiel, we evaluate the effects of linking ETS in combination with 1) restricted allowances trading, 2) adjusted allowance endowments to compensate China, and 3) altered Armington elasticities when Nationally Determined Contribution (NDC) targets are met. We find that generally, both partners benefit from linking their respective trading systems. Yet, while the EU prefers full linking, China favors restricted allowance trading. Transfer payments through adjusted allowance endowments cannot sufficiently compensate China so as to make full linking as attractive as restricted trading. Gains associated with linking increase with higher Armington elasticities for China, but decrease for the EU. Overall, the EU and China favor differing options of linking ETS. Moreover, heterogeneous impacts across EU countries could cause dissent among EU regions, potentially increasing the difficulty of finding a linking solution favorable for all trading partners.
Topic:
Climate Change, Environment, International Trade and Finance, Regional Cooperation, and European Union
Political Geography:
China, Europe, and Asia

30. EU-China Investment Agreement: the EU’s Balancing Act between Values and Economic Interests

Author:
Saila Turtiainen
Publication Date:
03-2021
Content Type:
Commentary and Analysis
Institution:
Finnish Institute of International Affairs
Abstract:
The ratification process for the EU’s new investment agreement with China is expected to be very difficult. Although the aim is to improve EU-China relations, the process of getting the agreement approved in the EU will end up causing further tensions with China as the EU tries to strike a balance between promoting its values and economic interests.
Topic:
International Cooperation, International Trade and Finance, European Union, Conflict, and Economic Cooperation
Political Geography:
China, Europe, and Asia