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151. Ending the Destructive Sino-U.S. Interaction Over Taiwan: A Call for Mutual Reassurance

Author:
Michael D. Swaine
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Quincy Institute for Responsible Statecraft
Abstract:
Recent years have witnessed steadily rising hostility and suspicion between the United States and China over each other’s approach vis-à-vis Taiwan. The unprecedentedly aggressive Chinese military exercises in response to U.S. House Speaker Nancy Pelosi’s trip to Taipei this year indicated that the continued downward spiral in Sino-American relations over Taiwan would increasingly expose Washington and Beijing to risks of repeated crises with a potential of a dangerous armed conflict. This brief lays out the policy steps necessary to reverse this spiral of escalation.
Topic:
Foreign Policy, Diplomacy, Bilateral Relations, Crisis Management, and Strategic Interests
Political Geography:
China, Taiwan, Asia, and United States of America

152. The Worsening Taiwan Imbroglio: An Urgent Need for Effective Crisis Management

Author:
Michael D. Swaine
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
Quincy Institute for Responsible Statecraft
Abstract:
A severe diplomatic or military crisis over Taiwan is the issue that poses the greatest risk of war between the United States and China. Worryingly, the risk has increased in recent years with the deepening Sino-American rivalry amid intensifying conflicts of interest vis–à–vis Taiwan. Washington and Beijing must recognize the cycle of confrontational deterrence that drives it and take urgent measures to stop it. If the United States and China fail to take measures of mutual reassurance, the two countries will continue on the path to confrontation over Taiwan. This is particularly likely if their overall bilateral relationship continues to deteriorate. While acknowledging the likelihood of such a dangerous scenario, this brief affirms the need to improve crisis management on the Taiwan issue, outlines the major problems and limits of existing crisis management efforts, and offers concrete recommendations for improving the ability of both Washington and Beijing to more effectively manage future crises over Taiwan, as well as Sino-American crises in general.1
Topic:
Conflict Prevention, Foreign Policy, Diplomacy, and Crisis Management
Political Geography:
China, Taiwan, Asia, and United States of America

153. A Restraint Recipe for America’s Asian Alliances and Security Partnerships

Author:
Michael D. Swaine and Sarang Shidore
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Quincy Institute for Responsible Statecraft
Abstract:
As Sino–American relations deteriorate, risks of conflict between Washington and Beijing are growing. A major war would be terrible for both the United States and the region while setting back critical goals, like the fight to stop climate change. Avoiding a war while safeguarding vital U.S. interests ought to be a priority. But while many in the United States want to strengthen alliance structures as a means of deterring China and to make Taiwan a de facto security ally, those who espouse a strategy of Restraint believe this approach endangers Americans and undermines their prosperity. A policy of Restraint is predicated on the view that alliances are not ends in themselves, but a means of bolstering U.S. security. This brief analyzes the utility of America’s Asian alliances and security partnerships from a Restraint perspective under two scenarios. The first and preferred scenario is that of the United States and China walking back from their current march toward confrontation to achieve a stable, if still significantly competitive, relationship. The second and more likely scenario is a much sharper and sustained rivalry with China becoming a regionally strong, possibly in many ways dominant, power.
Topic:
Security, Foreign Policy, Partnerships, and Alliance
Political Geography:
China, Taiwan, East Asia, Asia, and United States of America

154. How to Engage and Prevail in Political Warfare against China

Author:
John Lee
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
In his report to the Twentieth National Congress of the Communist Party in October, Xi Jinping praised the progress made over the past decade under his leadership to advance the great rejuvenation of the Chinese nation domestically and internationally. According to Xi, this is taking place in an era of “momentous changes of a like not seen in a century [and which] are accelerating across the world.”1 For Xi, these “great changes” comprise “a significant shift [that] is taking place in the international balance of power, presenting China with new strategic opportunities in pursuing development.”2 A pillar of Xi’s plan to realize the rejuvenation of China and to emerge as the preeminent nation in the region and beyond is to shrink the strategic, military, economic, political, and normative ground in the region on which the United States can sustain, build, and demonstrate its power and influence. This is because China knows there is no material or nonmaterial counterbalance without the US. Additionally, the more China can weaken the resolve of US allies and other countries to support American-led initiatives to counter China and the credibility of the US-led alliance system, the smaller and weaker the ground for Washington to maintain its footholds in distant lands becomes, and the closer China draws to its goal of preeminence. The Chinese plan relies on building unmatched “comprehensive national power,” or CNP, which China can use to seduce, compel, or coerce other nations.3 CNP has material and nonmaterial elements. Regarding the latter, Beijing places enormous emphasis on political warfare in the form of information and influence operations. The first three memos in this series on Chinese political warfare argue that the Chinese Communist Party (CCP) makes no distinction between wartime and peacetime and believes it is engaged in a perpetual “struggle” against the West.4 Regarding political warfare, the previous memos noted that the People’s Liberation Army (PLA) plays a central and often dominant role in leading doctrine and operations when it comes to informational and influence warfare.
Topic:
Foreign Policy, Defense Policy, and Chinese Communist Party (CCP)
Political Geography:
China and Asia

155. Xi Jinping Boosts the Party’s Control and His Own Authority

Author:
Willy Wo-Lap Lam
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
The Jamestown Foundation
Abstract:
Under Xi Jinping, the leadership of the People’s Republic of China (PRC) has initiated multi-pronged measures to ensure the success of celebrations marking the centenary of the establishment of the Chinese Communist Party (CCP) in July this year and planning for the 20th CCP Congress, scheduled for the second half of 2022. The accent is on preserving political stability and further consolidating the apparently unassailable authority of President Xi, who is also CCP General Secretary and Chairman of the Central Military Commission (CMC).
Topic:
Media, Political Parties, and Chinese Communist Party (CCP)
Political Geography:
China and Asia

156. Winter Coal Shortages Reveal Chinese Energy Vulnerabilities

Author:
Elizabeth Chen
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
The Jamestown Foundation
Abstract:
Amid the coldest winter recorded since 1966, provinces across the People’s Republic of China (PRC) struggled with the worst electrical blackouts seen in nearly a decade (OilPrice, January 8). More than a dozen cities across Zhejiang, Hunan, Jiangxi, Shaanxi, Inner Mongolia, and Guangdong provinces imposed limits on off-peak electricity usage in early December, affecting city infrastructure and factory production. Analysts expect power shortages to persist through at least mid-February (SCMP, December 23, 2020). Officials have repeatedly assured the public that residential heating would not be affected and that China’s electrical supply remained “stable” and “sufficient,” even as energy spot prices continued to rise into the new year.
Topic:
Energy Policy, Services, Electricity, and Coal
Political Geography:
China and Asia

157. Early Warning Brief: Introducing the “New, New” China Coast Guard

Author:
Ryan D. Martinson
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
The Jamestown Foundation
Abstract:
In the past decade, the China Coast Guard (CCG, 中国海警, zhongguo haijing) has experienced two major reforms. The first, which began in 2013, uprooted the service from the Ministry of Public Security—where it was organized as an element of the People’s Armed Police (PAP)—and placed it under the control of the State Oceanic Administration (SOA), a civilian agency. In the process, the CCG was combined with three other maritime law enforcement forces: China Marine Surveillance (CMS), China Fisheries Law Enforcement (CFLE), and the maritime anti-smuggling units of the General Administration of Customs. The resulting conglomerate was colloquially called the “new” CCG, differentiating it from the “old” CCG of the Ministry of Public Security years. The second reform began in 2018, when the “new” CCG, now swollen with the ranks of four different forces, was stripped from the SOA and transferred to the PAP, which itself had just been reorganized and placed under the Central Military Commission (CMC) (China Brief, April 24, 2018). While much research has been done on the first reform, little is known about the second, at least in the English-speaking world. This article seeks to answer basic questions about the “new, new” CCG. What are its roles/missions, organization, and force structure? How does it differ from the CCG of the SOA years? How is it similar? What progress has been made two years after the second reform began?
Topic:
Law Enforcement, Armed Forces, Reform, and Borders
Political Geography:
China and Asia

158. The Rollback of Human Rights and the Rule of Law in Hong Kong

Author:
Michael C. Davis
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
The Jamestown Foundation
Abstract:
After the Hong Kong protest movement exploded in 2019, the world looked on with both hope and trepidation. Protestors made five demands: that a proposed extradition law be withdrawn; that there be an independent investigation of police behavior; that the protests stop being characterized as riots; that any charges against arrested protesters be dropped and that promised universal suffrage be implemented (HKPF, December 25, 2019). After months of protest, Hong Kong Chief Executive Carrie Lam publicly withdrew the extradition bill, fulfilling the first of the protestors’ demands (SCMP, September 4, 2019). But this temporary victory was too little too late and overshadowed by the ongoing and often violent crackdown on the protesters, and then in 2020, with Beijing’s imposition of the new National Security Law (NSL) (China Brief, July 29, 2020).
Topic:
Human Rights, Law, Rule of Law, Protests, and Repression
Political Geography:
China, Asia, and Hong Kong

159. Chinese COVID-19 Misinformation A Year Later

Author:
Elizabeth Chen
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
The Jamestown Foundation
Abstract:
On January 28, members of an international team led by the World Health Organization (WHO) concluded fourteen days of quarantine and began field work in Wuhan, China for a mission aimed at investigating the origins of the COVID-19 pandemic. As of the time of writing, the team had made visits to the Hubei Center for Disease Control and Prevention; the Wuhan Institute of Virology (WIV) and the Huanan Seafood Wholesale Market. State media also reported that the WHO team visited “an exhibition featuring Chinese people fighting the epidemic,” raising concerns that the trip could prove to be little more than a public relations move even as the origins of the coronavirus remain heavily politicized and uncertain (Global Times, January 31). Foreign experts have worried about whether the WHO investigation will be sufficiently transparent or if investigators will be allowed adequate access to key locations and scientific data (SCMP, January 27). Apart from a “terms of reference” report and a list of WHO members released in November, further details on the WHO team’s trip have not been released.
Topic:
World Health Organization, COVID-19, Misinformation, and Health Crisis
Political Geography:
China and Asia

160. China’s Use of U.S. Satellite Communications Technology in the South China Sea

Author:
Zachary Haver
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
The Jamestown Foundation
Abstract:
In recent years, the maritime law enforcement (MLE) forces of the People’s Republic of China (PRC) have dominated the contested waters of the South China Sea (AMTI, December 4, 2020). While the exponential growth and increasing assertiveness of the China Coast Guard (CCG) have captured headlines, the evolving role of technology in China’s MLE operations has received less attention. New communications infrastructure and monitoring systems, for example, help Chinese MLE forces monitor and control contested maritime space in the South China Sea (CMSI, January 2021). These investments align with China’s broader pursuit of information superiority in the South China Sea, which involves building up electronic intelligence, counter-stealth radar, and other capabilities (JHU APL, July 2020).
Topic:
Science and Technology, Communications, Armed Forces, and Satellite
Political Geography:
China, Asia, United States of America, and South China Sea

161. Tracking the Digital Component of the BRI in Central Asia, Part One: Exporting “Safe Cities” to Uzbekistan

Author:
Sergey Sukhankin
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
The Jamestown Foundation
Abstract:
Following the 2013 announcement of the Belt and Road Initiative (BRI) at a speech given by People’s Republic of China President Xi Jinping during visit to Kazakhstan, Central Asia has been a key regional priority and an indispensable element for the success of the BRI as a whole (PRC Ministry of Foreign Affairs, September 7, 2013). Over the years, the BRI—nebulously defined from the start—has come to be associated with a variety of policy and investment programs. A previous series of articles has covered security-related developments associated with the BRI aimed at maintaining stability and protecting economic investments across the region (China Brief July 15; October 19; August 12).China has also begun to expand its export of digital infrastructure and surveillance technology under the umbrella of the BRI. The digitalization strategy—ostensibly aimed at promoting the international integration of technology with infrastructure and finance as well as spreading digital innovation abroad—is often referred to as the Digital Silk Road (DSR, 数字丝绸之路, shuzi sichou zhi lu). The high-level emphasis on promoting the DSR has only grown under the COVID-19 pandemic (CGTN, June 10, 2020). Across Central Asia, the DSR has been primarily represented by efforts to export China’s Smart/Safe City programs, which allow governments to collect, store, process and analyze vast amounts of personal information. The promotion of the so-called “informatization” of society (信息化, xinxi hua) and data commodification are yet more driving forces behind China’s DSR ambitions in Central Asia.
Topic:
Science and Technology, Surveillance, Belt and Road Initiative (BRI), and Digital Policy
Political Geography:
China, Central Asia, Asia, and Uzbekistan

162. An Overlooked Source of Chinese Influence in Latin America

Author:
Linda Zhang and Ryan Berg
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
The Jamestown Foundation
Abstract:
The People’s Republic of China’s (PRC) engagement in Latin America and the Caribbean (LAC) is drawing increased scrutiny from U.S. policymakers. The International Liaison Department of the Central Committee of the Chinese Communist Party (ILD) (中共中央对外联络部, zhonggong zhongyang duiwai lianluo bu) is one of the many Chinese organizations active in LAC. Although its footprint is relatively small compared to larger trade and governmental organizations, the ILD’s emphasis on ideology and on long-term relationship building in its engagements is noteworthy and should be monitored more closely within the context of China-Latin America relations.
Topic:
Foreign Policy, International Affairs, Political Parties, and Chinese Communist Party (CCP)
Political Geography:
China, Asia, and Latin America

163. Chinese Demographic Signals Bode Ill for Future Development

Author:
Elizabeth Chen
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
The Jamestown Foundation
Abstract:
A new study published February 8 by the Ministry of Public Security of the People’s Republic of China (PRC) (MPS, 中华人民共和国公安部, zhonghua renmin gongheguo gongan bu) reported that there were 10.035 million registered births in 2020, down from 11.79 million in 2019. This represents a 15 percent decrease following the coronavirus pandemic (Guancha.cn, February 8). Althou­gh the number of registered births—that is, newborns recorded in the household registration hukou (户口) system—is not the same as China’s official birth rate, the decline has concerned analysts that a long-forewarned demographic crisis may be approaching faster than expected.National birth and population figures for the previous year are usually released in January but have been delayed until April this year as China’s National Bureau of Statistics (NBS) compiles its decennial census. In the meantime, data released by some provinces and cities in January has appeared to confirm the implications of the MPS study. Data released from the capital city of Guangdong province—which saw the highest number of births per province in 2019—showed that birth rates in Guangzhou were down by 17 percent year-on-year and mirrored broader trends across the rest of the province. In Zhejiang, China’s wealthiest province, the cities of Wenzhou and Taizhou reported that new births in 2020 fell by 19 percent and 33 percent respectively compared to 2019 (SCMP, February 2).
Topic:
Demographics, Development, Aging, and Population Growth
Political Geography:
China and Asia

164. Buying Silence: The Price of Internet Censorship in China

Author:
Ryan Fedasiuk
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
The Jamestown Foundation
Abstract:
On Monday, November 12, 2018, the recently-appointed director of China’s Central Cyberspace Affairs Commission (CAC) Zhuang Rongwen (庄荣文) summoned senior executives from WeChat and Sina Weibo for a “discussion” (Central CAC, November 16, 2018). While there is no transcript of the meeting available to the public, one thing is certain: It did not go well. For months, Zhuang had been telegraphing his discontent with the state of censorship in China—and specifically, the role that social media giants had played in undermining it (New America, September 24, 2018). His official statement about the meeting, which was uploaded to the CAC’s website a few days later, accused China’s largest internet companies of “breeding chaos in the media” and “endangering social stability and the interests of the masses.” Under his watch, he vowed that the Central CAC would “strictly investigate and deal with the enterprises that lack responsibility and have serious problems” (Central CAC, November 20, 2018). Rarely do Party officials offer such scathing public admonitions.
Topic:
Science and Technology, Internet, Surveillance, and Censorship
Political Geography:
China and Asia

165. AUKUS Security Pact: Setting the Rivalry with China in the Indo-Pacific

Author:
Krševan Antun Dujmović
Publication Date:
12-2021
Content Type:
Policy Brief
Institution:
Institute for Development and International Relations (IRMO)
Abstract:
The announcement of the trilateral security pact between Australia, the United Kingdom, and the United States, known by the acronym AUKUS, intended to enhance cooperation between the three countries in the Indo- Pacific region in defense and security, has sent shockwaves throughout the world, especially the UK for the Royal Navy of Australia. The nuclear fueled submarines will be armed by conventional weapons, the number of acquired vessels will be at least eight, and as a typically Australian request, part of the vessels will be constructed in Australia’s naval shipyards. So far, the US, the UK, Russia, China, France in China and Europe. The key element of the AUKUS pact, signed on 15th September 2021, is the acquisition of nuclear-powered submarines from the US and and India are the only six countries that have commissioned nuclear-powered submarines. Furthermore, before signing the AUKUS pact, the UK was the only country in the world with which the US was sharing the nuclear propulsion technology, under the Mutual Defense Agreement signed back in 1958. The supply of Australia with British and American nuclear-powered attack submarines, as the most delicate part of the AUKUS pact, attracted by far the most of media attention and provoked China’s aggressive reaction. Even more, the three nations security pact, which is in principal intended to bring “enhanced trilateral security partnership for the 21st century”, has made Beijing particularly worried as China fears that this triple alliance is pointed directly against it. The three countries intend to step up their cooperation in the security and defense sector, and apart from cooperation in industrial production of new military equipment, AUKUS also envisages a broad cooperation in the fields where the three countries feel particularly threatened by China’s staggering growth, and they include cyber security, quantum computing and artificial intelligence.
Topic:
Security, International Cooperation, Alliance, Conflict, and Rivalry
Political Geography:
United States, China, United Kingdom, Europe, Asia, Australia, North America, and Indo-Pacific

166. Pugwash Note on Northeast Asia Nuclear Weapon Free Zone

Author:
Pugwash Conferences on Science and World Affairs
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Pugwash Conferences on Science and World Affairs
Abstract:
Denuclearization of Korean Peninsula is one of the most important security issues that the countries in the region, including the US, will face. Given the ongoing development of nuclear and missile programs in Democratic People’s Republic of Korea (DPRK) and increasing tensions between nuclear weapon countries (US, Russia and China) in the region, it is critically important to reduce risk of nuclear war in the region and to find a way to resolve a current deadlock in negotiations between DPRK and the US for denuclearization of Korean Peninsula. This paper proposes a comprehensive approach to peace and stability in the region as well as a phased denuclearization of Korean Peninsula and eventually establishing Nuclear Weapon Free Zone (NWFZ) in the region
Topic:
Security, Arms Control and Proliferation, Nuclear Weapons, Military Strategy, Conflict, and Denuclearization
Political Geography:
Japan, China, Asia, South Korea, North Korea, and Korean Peninsula

167. Raising a caution flag on US financial sanctions against China

Author:
Jeffrey J. Schott
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
China’s policies in Xinjiang, Hong Kong, and the South China Sea and its ongoing support for Iran, North Korea, and Venezuela pose major challenges for the United States, where bipartisan pressure is growing to ramp up punitive sanctions against leading Chinese firms and financial institutions. Financial sanctions freeze the US assets or bar US entry of the targeted individuals and firms and prohibit US financial firms from doing business with them. Schott explains why US officials should carefully weigh the risks to international financial markets and US economic interests before imposing punitive sanctions on major financial institutions engaged with China. The collateral costs of such sanctions would be sizable, damaging US producers, financial institutions, and US alliances. By restricting access of major banks to international payments in US dollars and barring use of messaging systems like SWIFT, tougher US financial sanctions would effectively “weaponize” the dollar; friends and foes alike would be pushed to seek alternatives to dollar transactions that, over time, would weaken the international role of the dollar. Instead of doubling down on current unilateral financial sanctions, US policy should deploy sanctions in collaboration with allies and calibrate trade and financial controls to match the expected policy achievements.
Topic:
Human Rights, Sanctions, Finance, and Economy
Political Geography:
China, Asia, North America, and United States of America

168. The unappreciated trend toward unilateral trade liberalization

Author:
Robert Z. Lawrence
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Afrequently voiced complaint from the Trump administration was that US firms have faced a competitive disadvantage in exports because the US market is open and US tariffs are low but US trading partners protect their markets with high tariffs. The administration used this concern to justify raising US tariffs whenever it could. Lawrence argues that these claims should be more nuanced and account for the extensive unilateral liberalization by many countries over the past 30 years and that the grievances that motivated the Trump trade policies are increasingly misplaced. Many developing countries have reduced their tariffs unilaterally to rates that are far lower than they applied three decades ago and far less than the bound rates reflected in their World Trade Organization (WTO) obligations. Globally, on average, tariffs were not raised during the global financial crisis of 2008 and continued to decline through at least 2018. Even when shocks from imports resulted in serious injury to domestic industries, several developing countries temporarily provided safeguard protection but at levels that were lower than their WTO bound rates. This evidence of import liberalization also suggests that rising protectionism was not responsible for the slow growth in world trade that has been evident since 2011. It remains uncertain whether countries will now respond to disruptions to global supply chains since 2018 caused by Trump’s trade policies and the COVID-19 pandemic by reversing their tariff liberalization stance, but the sustained enthusiasm for new megaregional trade agreements suggests many countries will not.
Topic:
Emerging Markets, World Trade Organization, Trade Wars, and Protectionism
Political Geography:
China, Asia, North America, and United States of America

169. Improving China's participation in resolving developing-country debt problems

Author:
Martin Chorzempa and Adnan Mazarei
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The COVID-19 shock has exacerbated the struggles of many emerging-market and developing economies (EMDEs) to repay their external debt. One of the most urgent challenges relates to debt owed to China, whose lending spree under its Belt and Road Initiative and other programs has played an outsized role in what amounts to a crisis for many countries. The scope of the problem is striking. China is owed more than $100 billion, or 57 percent of all debt owed to official creditors by the countries that need help the most. China is not a member of the Paris Club of official creditors, which coordinates, within a multilateral framework, the resolution of general sovereign illiquidity or unsustainable external debt of EMDEs. There is an urgent need to put in place more effective, long-term solutions to help durably lower the risks of prolonged debt difficulties in EMDEs. These problems could be partly addressed by creating creditor committees to coordinate debt relief with China. The Group of Twenty (G20) has taken some steps to include creditor committees in the context of the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI), but only for low-income countries that qualify for the DSSI and only for official creditors. To better address debt distress, it needs to extend the approach, especially to middle-income debtor countries.
Topic:
Debt, Development, Emerging Markets, and G20
Political Geography:
China and Asia

170. Overheating debate: Why not in Japan?

Author:
Egor Gornostay and Madi Sarsenbayev
Publication Date:
06-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
An intense debate has erupted over whether the unprecedented size of the US fiscal stimulus will cause the US economy to overheat and generate high inflation. To date, the debate has focused primarily on the United States, even though many other developed economies responded to the COVID-19 crisis with unprecedented economic stimulus packages. By some measures, Japan stands out: The total amount of its three consecutive stimulus packages is estimated to exceed 50 percent of its GDP, about twice as high as the US fiscal packages (about 26 percent of US GDP). However, overheating concerns are not being actively raised for Japan. This Policy Brief finds that although Japan’s headline number looks astonishingly high, the actual size of its discretionary fiscal measures is about 16 percent of GDP, substantially smaller than the total size of the US packages. US fiscal stimulus is the largest among Group of Seven (G7) countries relative to GDP, justifying the attention economists have given it. The United Kingdom is estimated to spend more than Japan as a proportion of GDP, but even the UK stimulus program markedly lags behind that of the United States. If additional stimulus measures making their way through the legislative process in Canada are counted, Japan’s fiscal stimulus looks even smaller and would amount to being only average in size among G7 countries. Given this and the lackluster performance of its economy in the first quarter of 2021, it is unlikely that Japan will find itself in overheating territory any time soon.
Topic:
Inflation, G7, and COVID-19
Political Geography:
Japan, Asia, North America, and United States of America

171. Northeast Asia Defense Transparency Index 2020-21

Author:
M. Patrick Hulme and Tai Ming Cheung
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:
Growing distrust in East Asia, especially in the security arena, is increasingly critical as new and long-standing hotspots— including the Taiwan strait, Korean peninsula, East China Sea, and South China Sea—become more volatile. The need for confidence-building measures is clear, and a central tool of confidence building is defense transparency. The Defense Transparency Index (DTI), a project of the University of California’s Institute on Global Conflict and Cooperation, ranks six countries on their efforts to promote transparency in defense and national security, including the People’s Republic of China, Japan, the Democratic People’s Republic of Korea (DPRK), the Republic of Korea, and the major external powers most involved in the region—the United States and Russia.
Topic:
Security, Defense Policy, Geopolitics, and Transparency
Political Geography:
Russia, Japan, Taiwan, East Asia, Asia, North Korea, Korea, East China, and United States of America

172. Japan’s Role in India’s Infrastructure Journey: ODA, Technology, and Partnership for Achieving Sustainable Development Goals

Author:
Monika Chansoria
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Japan Institute Of International Affairs (JIIA)
Abstract:
Asia’s current security map finds itself being reimaged in the midst of the evolving regional re-alignments in a post-Covid-19 pandemic scenario that has caused unprecedented damage to humanity. The idea of ‘Asia-Pacific’ that seemed apt as a regional framework at least till the late 20th century now encompasses a far broader scope geographically. The regional order matrix has been instrumental in paving the way for the “Indo-Pacific” region at large. As a region including maritime Asia at its core, the IndoPacific finds itself coupled with geographical boundaries that extend from the eastern coast of Africa, through the Indian Ocean, to the Western Pacific. Asia’s tectonic shifts in power politics shall continue to challenge future stability in the region with festering territorial and maritime disputes, worsening resource competition, fast-rising military expenditures, and polarizing waves of domestic nationalism only make more germane efforts towards arriving upon a common understanding and approach for an Indo-Pacific definition of Asia
Topic:
Science and Technology, Infrastructure, Partnerships, and Sustainable Development Goals
Political Geography:
Japan, India, and Asia

173. Japan, Hikari Kikan, and Subhash Chandra Bose’s Indian National Army: The Defining, Yet Unfinished 1940s Connect

Author:
Monika Chansoria
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
Japan Institute Of International Affairs (JIIA)
Abstract:
India gained freedom from the British rule following a long, protracted independence struggle, which had many phases, and defining moments. A significant one amongst them was the role of the Indian National Army (INA) under Subhash Chandra Bose with crucial assistance and aid from Imperial Japan. Bose’s view of India’s struggle for independence differed radically from Mahatma Gandhi’s. For him, the war presented a golden opportunity to reach out to the adversaries of Britain, namely Germany and Japan, and seek their assistance to free India from under the oppressive British rule. Gandhi opposed this realist mode of thought and as a consequence Bose found himself marginalized within the Congress. Subhash Chandra Bose, popularly known as Netaji (Respected Leader) among Indians the world over, became the undisputed leader of this militant wing of India’s nationalist movement, over the disagreement of using force against the British Empire with Mahatma Gandhi and Jawaharlal Nehru. Notably, despite the opposition of Gandhi, Bose was elected President of the Indian National Congress in 1938, and once again in 1939.
Topic:
History, World War II, Army, and Independence
Political Geography:
Japan, India, and Asia

174. Elevating the Australia-Japan Strategic Partnership to “a new level”: challenges and responses

Author:
Thomas S. Wilkins
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Japan Institute Of International Affairs (JIIA)
Abstract:
In November of 2020, Australian Prime Minster Scott Morrison was the first head of government to physically visit Japan to meet with his new counterpart Yoshihide Suga since the latter’s assumption of office for the annual summit meeting of their bilateral strategic partnership. Commentators were surprised that Mr Morrison would travel internationally in the midst of the COVID-19 pandemic, but his determination to do so, enduring quarantine measures upon his return, was indicative of the high value that Australia ascribes to its “Special Strategic Partnership” with Japan. At a time of simmering strategic rivalr y in the Indo-Pacific region, Canberra places a premium on its close collaborative relationship with Tokyo, as both countries confront similar challenges in navigating the turbulent and unstable regional environment. It is in this context they affirmed their intent ‘to elevate bilateral security and defence cooperation under the Special Strategic Partnership to a new level.
Topic:
Security, Bilateral Relations, Partnerships, and COVID-19
Political Geography:
Japan, Asia, Australia, and Oceania

175. Answering Beijing’s Growing Assertiveness beyond the Senkakus: Balancing Japan-China Relations

Author:
Valerie Niquet
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Japan Institute Of International Affairs (JIIA)
Abstract:
To Japanese authorities, there is no such thing as the “Senkaku question”. China is pursuing with increased assertiveness a strategy of coercion, using ambiguity and “grey zone” operations to put the onus of potential escalation on Tokyo.1 The vague and ambiguous nature of this strategic power play makes it all the more dangerous and complex. When Tokyo proclaims, with reason, that “the government continues to control and administer the territory by such means as patrolling and law enforcement,” it seeks to answer the permanent pressure that China exerts in the zone.2 However, the maintenance of the status quo, when China exerts an almost continuous pressure in the waters surrounding the Senkaku Islands and Japanese fishermen do not have access to part of Japan’s own national territory, poses other types of problems that the People’s Republic of China tries to exploit at the service of broader ambitions. It also poses a challenge in crisis management: how can the Japanese government be active and in control of situational developments, and not just reactive, without going as far as sparking a major incident in the East China Sea?
Topic:
International Relations, Bilateral Relations, Geopolitics, and Crisis Management
Political Geography:
Japan, China, and Asia

176. How difficult is China’s business environment for European and American companies?

Author:
Uri Dadush and Pauline Weil
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Despite tensions over China’s discriminatory business practices, China’s trade continues to thrive, and the country has taken over from the United States as the first destination for foreign investment. American and European businesses continue to be engaged in China’s large and growing market, even amid a trade war between China and the United States. Drawing on surveys of companies and international comparisons, we show that – contrary to the prevailing narrative – China’s business practices have improved significantly in recent years. China’s business environment is today generally more favourable than that in other large countries at similar levels of development and, in some though certainly not all aspects, is in line with the Organisation for Economic Co-operation and Development average. Differences over geopolitics and human rights must be addressed, but it is clear that trade and investment agreements conditioned on accelerated reforms in China would yield substantial dividends. The benefits of such deals would accrue not only to foreign investors in China and exporters to China, but also to consumers and importers in the European Union and, especially, in the US, where punitive tariffs on China remain in effect. Critical aspects in the negotiations would include better access for American and European investors to China’s market for services and improved enforcement of rules and regulations in China. As in many middle-income countries, uneven enforcement of the law (rather than the law itself) remains a critical problem in China.
Topic:
Development, Bilateral Relations, European Union, Business, and Investment
Political Geography:
China, Europe, Asia, North America, and United States of America

177. China’s state-owned enterprises and competitive neutrality

Author:
Alicia Garcia-Herrero
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
As China’s economic weight continues to grow, so does the global impact of its companies. Chinese state-owned enterprises (SOEs) produce a large share of Chinese goods and services. Given their importance both in China and increasingly globally, it should be measured whether SOEs introduce distortions into markets and how significant those distortions are. Foreign governments negotiating trade or investment deals with China need this information so they can better measure how far China is from offering a level playing field to foreign companies on its domestic market. In this context, competitive neutrality is an important working concept that can be used to asses how far a market is from being a competitive environment. The Organisation for Economic Co-operation and Development defines a framework of competitive neutrality as one in which public and private companies face the same set of rules, and no contact with the state gives competitive advantage to any market participant. Quantifying the concept is difficult, but we provide a preliminary measure of the lack of competitive neutrality in relation to Chinese SOEs. In particular, we focus on debt and tax neutrality and compare the situation for Chinese state-owned and private firms on aggregate and sectoral levels. Our results support the view that China’s competitive environment is generally poor. The advantageous position of SOEs in China is true for most economic sectors, though to a variable extent, with the automotive sector one of the furthest away from competitive neutrality. A working measure of competitive neutrality applied in China could help improve the level playing field for foreign companies in China. It could also be applied globally given the very large size and global footprint of Chinese SOEs. The concept could even be introduced in a potential reform of the World Trade Organisation.
Topic:
Business, Trade, Neutrality, and State-Owned Enterprises
Political Geography:
China and Asia

178. SOUTHCOM Commander ADM Faller on U.S.-China Strategic Competition in the Western Hemisphere

Author:
Craig S. Faller
Publication Date:
06-2021
Content Type:
Policy Brief
Institution:
Project 2049 Institute
Abstract:
The Project 2049 Institute is pleased to announce the publication of remarks made by Admiral Craig Faller at our recent event, “Near and Present Danger: SOUTHCOM Commander ADM Faller on U.S.-China Strategic Competition in the Western Hemisphere.” In his remarks, Admiral Faller addresses the Chinese Communist Party’s (CCP) ambitions in Latin America and the Caribbean, from both an economic and strategic perspective, which support its pursuit of global dominance and the imposition of authoritarian values on international institutions. In addition, Admiral Faller highlights SOUTHCOM’s recent activities in the Western Hemisphere and suggests a practical framework to develop and sustain trusted partnerships in the region that will promote democratic values in the face of CCP coercion.
Topic:
Bilateral Relations, Authoritarianism, Geopolitics, and Strategic Competition
Political Geography:
China, Asia, North America, and United States of America

179. Eyes on the Prize: Australia, China, and the Antarctic Treaty System

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, and Coalition
Political Geography:
China, Asia, Australia, and Arctic

180. Chinese-Australians in the Australian Public Service

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, and Public Service
Political Geography:
China, Asia, and Australia

181. To Beat China On Tech In Emerging Markets, Learn From It: Competing with China on 5G and future technologies

Author:
Luke Patey
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
Recommendations: The US, South Korea, Japan, and the EU can pool resources to level the playing field with China and offer new finance options for developing countries seeking to upgrade their communications and technology infrastructure. The US should look to the India and Vietnam model and help other nations develop domestic capacities that lower dependencies on Huawei and other foreign tech providers over time. Open RAN is no silver bullet to compete with China. Its potential will only be fully realized in the mid and long run, after high integration costs, security gaps, and other problems are worked out.
Topic:
Security, Foreign Policy, Development, Politics, Science and Technology, Power Politics, Economy, and Cyberspace
Political Geography:
Japan, China, Asia, North America, and United States of America

182. What to do about China? Forging a compromise between the US and Europe in NATO

Author:
Mikkel Runge Olesen
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
The Biden administration is likely to adopt a less chaotic US approach to the NATO alliance concerning China. European members should utilize this calmer time to develop viable strategies on how to tackle non-conventional threats from China within the Alliance in concert with the US. RECOMMENDATIONS: NATO members should: Continue to develop their own strategies and procedures against non-conventional Chinese threats in the domains of cyber, influence activities, and trade and investments. Resist the temptation to fall into inertia in determining how NATO should deal with China after the fear of a US withdrawal from NATO has subsided. Work with the Biden administration to develop NATO’s role in relation to China further on grounds that are acceptable on both sides of the Atlantic.
Topic:
Security, Defense Policy, NATO, Diplomacy, and International Organization
Political Geography:
China, Asia, Denmark, and United States of America

183. ASPI NOTES for the Biden Administration

Author:
Wendy Cutler, Anubhav Gupta, Nathan Levine, Richard Maude, Elina Noor, Jing Qian, Alistair Ritchie, Kevin Rudd, Daniel R. Russel, and Thom Woodroofe
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Asia Society
Abstract:
The Asia Society Policy Institute (ASPI) Notes for the Biden Administration is designed to offer creative and practical ideas for how the United States might re-engage in the Asia Pacific, particularly in the critical first six months of the new administration. The administration will immediately face a range of challenges and opportunities in this important region, including on climate change, public health, and the global economy. President-elect Biden and his team have signaled the need for the United States to lean into and deepen its engagement with friends and allies. This will mean leveraging the Asia Pacific’s multilateral architecture as well as using global forums such as the G20 and international organizations. Trade policy will also figure importantly in any effort to renew and expand America’s engagement. Additionally, the U.S.-China relationship will loom large from the outset. Tensions with China will surely linger, whether in the South China Sea or the Taiwan Strait, complicating the task of establishing a new framework of “managed strategic competition” – a combination of each side's "red lines," continued competition, plus agreement on areas of mutually beneficial cooperation. ASPI Notes for the Biden Administration provides a diverse package of 20 actionable proposals to address specific risks or objectives in reconnecting with the Asia Pacific. These notes carefully reflect the views, perspectives, and expectations of the region itself – a hallmark of ASPI’s approach.
Topic:
Foreign Policy, Climate Change, Economy, Trade, Public Health, and Joe Biden
Political Geography:
China, Taiwan, Asia, Asia-Pacific, and United States of America

184. ‘Designed in Ethiopia’ and ‘Made in China’: Sino-Ethiopian technology collaboration in South-South relations

Author:
Jos Meester
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
This policy brief provides an examination of China’s rise in relation to its African partners. It takes into account geopolitical concerns, but homes in on China’s Belt and Road Initiative, its means of expanding into Africa. It examines the role of the Digital Silk Road in the use of Chinese artificial intelligence and technology transfers on surveillance and the risks of repression. The brief aims to move beyond the politicised narratives surrounding Chinese involvement in Africa by testing them against practical initiatives on the ground. It examines Ethiopia, particularly its burgeoning tech hub known as the ‘Sheba Valley’, in order to understand China’s role in development in African countries. Ethiopia is a critical case because of: the country’s strong relations with China, leading Ethiopia to model its developmental state model on the Chinese one and incentivising civil servants to learn from the Chinese experience; Ethiopia’s attempt to develop its relatively advanced ICT hub (the Sheba Valley) in collaboration with China’s Shenzhen-based ICT hub; Ethiopia’s historically heavy surveillance and repressive practices, in part modelled on China’s practice of prioritising development over democratic reform.
Topic:
International Cooperation, Science and Technology, Geopolitics, Surveillance, Belt and Road Initiative (BRI), and Artificial Intelligence
Political Geography:
Africa, China, Asia, and Ethiopia

185. ‘A careful foot can step anywhere’: The UAE and China in the Horn of Africa: Implications for EU engagement

Author:
Jos Meester and Guido Lanfranchi
Publication Date:
06-2021
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
Over the last decade, the UAE and China have vastly expanded their economic, political and military footprint in the Horn of Africa, and their actions now have the potential to shape developments in the region. Room for cooperation between Abu Dhabi and Beijing exists on issues such as maritime security, regional stability, and economic development. Moreover, the two countries’ interaction could lead to improvements in the Horn’s underdeveloped infrastructure by triggering a race to investment. Yet, development and stability in the region might suffer if the strategic interests of external players take precedence over local ones, or if local elites (mis)use external support for narrow domestic political calculations. The EU and its member states have high stakes in the Horn’s stability. To optimise their engagement, European policymakers should be aware of the implications of the Emirati and Chinese presence, and they should strive to improve cooperation among the wide range of external players active in the Horn.
Topic:
Economics, International Cooperation, Politics, Military Affairs, Economic Development, and Economic Stability
Political Geography:
Africa, China, Asia, and Horn of Africa

186. The New Southern Policy Plus: What’s New and What’s Next?

Author:
Moe Thuzar
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Building on the New Southern Policy (NSP) implementation experience, and in recognition of the uneven impact of the Covid-19 pandemic on different populations in ASEAN, the ROK may consider the following operational dimensions of implementing the NSP Plus’ strategic thrusts. First, consultation of ASEAN’s collective and individual needs on each of the core strategy areas, leveraging on the ROK’s willingness to share and adapt its successful practices to meet the needs of its ASEAN partners. Second, synchronizing or aligning the NSP Plus’ regional thrusts with the ROK’s bilateral programs in the ASEAN countries, to ensure a seamless continuity of matching regional-level support with in-country requirements. Third, instituting a periodic or mid-term review mechanism for the NSP Plus implementation may help early identification of areas or priorities to adjust or revise, taking into account emerging needs and concerns. Ultimately, the ROK’s NSP niche will be the quality of its impact, in areas where the ROK’s strengths speak most to its “new southern neighbors.”
Topic:
Economy, ASEAN, and Regional Economy
Political Geography:
Asia and Korea

187. Field-by-Field Changes in China since Covid-19 and Implications for Korea

Author:
Jai Chul Heo
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
China has been able to escape from the Covid-19 outbreak relatively quickly compared to other countries. Nevertheless, it still remains greatly influenced by the Covid-19 pandemic across its politics, economy, society, culture, and other areas, which has led to various changes throughout China. Therefore, this study comprehensively examined the impact of the Covid-19 outbreak on various aspects of Chinese politics, economy, society, and culture. And in response to these changes in Chinese society, the study explores new strategies toward China in the post-Covid-19 era.
Topic:
Politics, Culture, Economy, COVID-19, and Society
Political Geography:
China, Asia, and Korea

188. The Effects of Free Trade Agreements on SMEs’ Direct and Indirect Exports

Author:
Kyong Hyun Koo
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
FTAs have been known to have large positive effects on trade creation between member countries. However, it is relatively unexplored how much small/medium-sized enterprises (SMEs) accounted for in the trade creation due to FTAs compared to large-sized enterprises (LEs). We find that Korean FTA policies have significantly increased SMEs’ direct exports to FTA partner countries between 2005 and 2017, although the effects were as much as a half of those for LEs, which indicates a considerable LEs’ premium in the direct export effects of FTAs. We further find that the FTAs also significantly increased the indirect exports of Korean firms, i.e., the domestic input supplies through in-dustrial input-output linkage, and that SMEs have benefited more from the indirect export effects of FTAs than LEs. Considering the direct and indirect export effects together, the LEs’ premium in the total export effects of FTA is found to become smaller.
Topic:
Treaties and Agreements, Economy, Free Trade, Exports, Trade, and Industry
Political Geography:
Asia and Korea

189. The Determinants and Welfare Implications of Labor Share

Author:
Sungbae An, Minsoo Han, Subin Kim, and Jinhee Lee
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The decline in labor share is recognized as a global phenomenon. Concerns have been raised that this trend will exacerbate the income inequality between business owners as capitalists and households as the labor suppliers, prompting a decline in household income and consumption, which are major driving forces for sustainable growth. Meanwhile, various policy measures have been introduced to raise the labor share, with the aim of correcting inequality and boosting growth. This study explores the determinants of labor share and analyzes the effects of these factors on the economy and social welfare, offering various interpretations and policy alternatives according to economic conditions.
Topic:
Labor Issues, Inequality, Economy, Business, and Welfare
Political Geography:
Asia and Korea

190. South Korea’s New Southern Policy as an Open Regime: A View from Southeast Asia

Author:
Aaron Jed Rabena
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
There are four ways on how the NSP Plus could be further improved. First, to avoid policy limitations and maximize the room for supply chain resiliency and functional cooperation, the coverage of the NSP countries can be expanded apart from ASEAN and India. Second, South Korea can employ the concept of Third-Party Market Cooperation (TPMC) or the pursuit of joint ventures or partnerships with other countries in maximizing capacity-building in third countries (NSP countries). Third, South Korea can help strengthen ASEAN institution-building, regionalism and internal balancing by applying a similar policy framework to the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) just as it does to the Mekong Region. Fourth, there needs to be more reciprocity or two-way interaction in the NSP so as to not make it seem that ASEAN is only on the receiving end of South Korean generosity. Finally, it is important to note that a change in the South Korean administration does not necessarily spell the end of the NSP just as the US’ Pivot or Rebalance to Asia of the Obama Administration was remodeled to the Indo-Pacific under the Trump administration.
Topic:
Markets, Regional Cooperation, and ASEAN
Political Geography:
India, Asia, South Korea, and Southeast Asia

191. What’s in the New Southern Policy Plus? An ASEAN Perspective on Building Niche-based Pragmatic Cooperation with South Korea

Author:
Chiew-Ping Hoo
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
It is clear that the NSP started off with the right messages and many Southeast Asian countries have been receptive to the initiatives. Despite the pandemic bringing a lot more challenges in implementing the policy initiatives, the NSP Plus has envisioned an innovation-oriented cooperation by transforming the traditional face-to-face operations to electronic and digitalized management. Public health cooperation is understandably the immediate focus, but such cooperation should be also seen as long-term fulfilment of the cooperation on the People pillar in the NSP. Infrastructure connectivity and South Korea’s cooperation in the building of an evolving East Asian regional architecture respectively enhance the Prosperity and Peace pillars. With patience, dedication, and commitment, the NSP Plus will be a long-lasting foreign policy legacy of Moon that brings benefits to Korea, ASEAN, and regional stability.
Topic:
Foreign Policy, Regional Cooperation, Political stability, Public Health, and ASEAN
Political Geography:
Asia, Korea, and Southeast Asia

192. Twenty Years of One Country Two Systems in China: Evaluation and Future Prospects

Author:
Jai Chul Heo
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This study evaluated China's model of “One Country, Two Systems” (一國兩制) 20 years into operation and the bilateral relationship between Taiwan and Mainland China ‒ focusing on Hong Kong, Macau, and Taiwan ‒ and examined future prospects. The study is meaningful in that it conducts a more objective evaluation than the previous studies by empirically analyzing data accumulated over the past 20 years of implementation of the One Country Two Systems principle from various perspectives. In addition, it is also a timely study in that it analyzes how the One Country Two Systems arrangement is likely to develop in the future, and what impact this would have, making considerations for changes in China's national strategy during the Xi Jinping period and the competition for hegemony between the U.S. and China. The results of the analysis indicate that over the past 20 years China has been experimenting with the possibility of coexisting different systems in one country, and that the One Country Two Systems arrangement, as a new form of unification which has never been attempted in the history of mankind, has actually shown the possibility of success. However, in recent years, various political contradictions have been exposed in the process of implementing the arrangement, mostly in the Hong Kong society, and the resulting conflict has gradually intensified. While maintaining the current capitalist system for 50 years, Macau is expected to gradually progress in its “Sinicization,” with continuing active economic and social exchanges and cooperation with mainland China. As a result, Macau is expected to be fully incorporated into China's socialist system in 2049, 50 years after the return, but it is likely to remain a city of special character considering Macau's region and its economic structure. On the other hand, the One Country Two Systems arrangement with Hong Kong is expected to undergo a difficult process in the future. In the midst of various conflicts surrounding Hong Kong, the guarantee for Hong Kong’s autonomy is expected to end in 2047 amid efforts on the part of the mainland government to sinicize Hong Kong. And China wants to apply the philosophy of “One Country, Two Systems” to its reunification with Taiwan as well, but in reality this remains very low in possibility.
Topic:
Foreign Policy, Politics, Bilateral Relations, Hegemony, and Strategic Competition
Political Geography:
China, Taiwan, Asia, Korea, Hong Kong, and Macau

193. Labor Market Impact of Immigration in the European Union

Author:
Dong-Hee Joe
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Immigration is one of the factors often considered as the causes of Brexit. Researchers find evidences that regions with more immigrants from the new member states of the European Union (EU hereinafter) in eastern Europe tended to vote more in favor of Brexit in the 2016 referendum. Similar relations between the size of immigrant population and anti-immigration attitudes or far-right voting are found in other richer EU member states. A common explanation for this relation is the concern that immigrants negatively affect the outcome in the host labor market. Immigration is drawing attention in Korea too. Although immigrants' share in population is still substantially smaller in Korea than in the EU, its increase is noticeable. Also, certain industries in Korea are known to be already heavily reliant on immigrant labor. Recently, as entry into the country was tightened due to the COVID-19 pandemic, firms and farms are reported to have faced a disruption in production. This trend of increasing presence of immigrants in population and in the labor market, vis-à-vis the low fertility rate and rapid aging in Korea, is raising interest and concern on the socioeconomic impact of immigration. To offer some reference for the debates related to immigration in Korea, KIEP researchers (Joe et al. 2020 and Joe and Moon 2021) look at the EU, where immigrants' presence was much higher from much earlier on, and where the greater heterogeneity among the immigrants allows for richer analyses. This World Economy Brief presents some of their findings that are salient for Korea.
Topic:
Immigration, European Union, Brexit, and Labor Market
Political Geography:
Britain, Europe, Asia, and Korea

194. China’s FDI in Europe and Europe’s Policy Response

Author:
Pyoung Seob Yang, Cheol-Won Lee, Suyeob Na, Taehyn Oh, Young Sun Kim, Hyung Jun Yoon, and Yoo-Duk Ga
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
China’s investment in the European Union (EU) increased significantly during the European financial crisis, but has been on the decline in recent years. The surge of Chinese investment has raised concerns and demands for analysis on the negative effects it could have on the EU companies and industries. In this context, the present study aims to analyze the main characteristics of Chinese investment and M&A in Europe, major policy issues between the two sides, the EU’s policy responses, and prospects of Chinese future investment in Eu-rope, going on to draw important lessons for Korea. To summarize the main characteristics of China's investment in Europe, the study found that the EU's share of China's overseas direct investment has continued to increase until recently. Second, investment in the Central and Eastern European Countries (CEECs) is gradually increasing, although it is still insignificant compared to the top five destinations in the EU: Netherlands, Sweden, Germany, Luxembourg and France. Third, China's investment in the EU is being made in pursuit of innovation in manufacturing and to acquire high-tech technologies. When it comes to China's M&A in Europe, the study found that the proportion of indirect China's M&As (via third countries (e.g. Hong Kong) or Chinese subsidiaries already established in Europe) was relatively higher than direct ones. Empirical factor analysis of investment also shows that China's investment in the EU is strongly motivated by the pursuit of strategic assets. Other factors such as institutional-level and regulatory variables are found to have no significant impact, or have an effect contrary to expectations. This suggests that China's investment in the EU is based on the Chinese government's growth strategy, and accompanies an element of national capitalism Today, It is highly expected that the COVID-19 pandemic will have a reorganizing effect on the global value chain (GVC) and Foreign investment regulation in the high-tech sector motivated by national security is emerging as a global issue as the US and the EU are tightening their control. As Korean companies are not free from the risk of falling under such regulations, a thorough and careful response is required. And for the Korean government, it is necessary to prepare legal and institutional measures regulating foreign investment in reference to the US and the EU.
Topic:
Foreign Direct Investment, Financial Crisis, European Union, Economy, Economic Growth, Global Value Chains, and COVID-19
Political Geography:
China, Europe, Asia, Korea, and United States of America

195. Changing Environment for Opening of Chinese Financial Sector and Implications

Author:
Sangbaek Hyun, Suyeob Na, Young Sun Kim, Koun Cho, and Bongkyo Seo
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The opening of China's financial sector has progressed at a very slow pace, unlike the manufacturing and trade sectors that have pushed for an active opening to the outside world. The Chinese economy has been growing rapidly while serving as a global production base, but since 2012, it has become necessary to modify its approaches to achieve growth as it enters an era of medium-speed growth. Recently, new reform and opening measures have been taken in various fields to improve the quality of the Chinese economy, and the need for reform and opening in the financial sector has also increased. Internally, the financial system centered on China's state-owned commercial banks has focused on indirect financing, which has served as a major obstacle to upgrading China's economy and industry to the next level, further increasing the need for reform and opening of the financial sector. Moreover, externally, the U.S.-China conflict which began in earnest in 2018, is applying strong pressure toward reform and opening in China’s financial sector. The Chinese government began to show a proactive attitude toward financial opening amid such internal needs and external pressure, and an important development was seen in China’s financial opening when President Xi Jinping declared further opening measures at the Boao Forum in April 2018. The Chinese financial authorities have prepared follow-up measures related to financial opening, and the Chinese government’s efforts toward financial opening in the three years from 2018 to 2020 yielded more results than the ten-year opening period since its accession to the WTO. Against this backdrop, this study examines the main contents of China’s financial opening process, which has been accelerating recently, and derives evaluation and implications.
Topic:
Finance, Economy, Economic Growth, and Banks
Political Geography:
China, Asia, and Korea

196. A Comprehensive Evaluation on Korea’s ODA to Rwanda’s Agriculture Sector and Its implications for Strategic Approaches

Author:
Young Ho Park, Minji Jeong, and Soo Hyun Moon
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
There has been a growing consensus in the national and international aid architecture that sporadic or scattered aid modality should be avoided. This study conducted a comprehensive cluster evaluation on Korea’s agricultural ODA to Rwanda between 2013 and 2017, with two newly devised indexes: Cluster Performance Index (CPI) and Resource Allocation Index (RAI). Every Korean agricultural ODA project was categorized into five clusters and numerically evaluated against criteria widely used in the evaluation of development projects: relevance, efficiency, effectiveness and sustainability. Our cluster evaluation reveals that projects are mostly planned appropriately, but in some clusters, large amounts of the budget have been invested in poorly planned projects. Regarding efficiency, there was considerable room for improvement in all clusters. Particularly, in the Monitoring and Evaluation (M&E) category, all clusters scored below average. Concerning performance evaluation, all clusters scored relatively high in effectiveness, specifically in goal achievement. Lastly, in terms of sustainability, risk management was found to be relatively inadequate in all clusters. Based on the lessons from the aforementioned observations and analysis results, this study suggests ODA quality can be improved by optimizing budget allocation, improving monitoring efficiency, creating synergistic effects through cluster linkage, and developing agricultural value chain program.
Topic:
Agriculture, Foreign Aid, Economy, and Value Chains
Political Geography:
Africa, Asia, Korea, and Rwanda

197. Fourth Industrial Revolution in Japan: Technology to Address Social Challenges

Author:
Gyupan Kim, Hyongkun Lee, Boram Lee, Jongeun Lee, and Wonju Son
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
In Japan, the challenges posed by its low birthrate and aging population expanded rapidly with the collapse of the bubble economy in the early 1990s, and in March 2011, energy and environmental problems such as power supply shortages and nuclear radiation issues occurred in the wake of the Great East Japan Earthquake and Fukushima nuclear accident. Also, with the beginning of the coronavirus pandemic in January 2020, digital transformation has emerged as a social challenge. In particular, Japan's aging population combined with a decrease in the working age population, has caused the government to face fiscal crisis due to the burden of social insurance, and a sense of crisis of labor shortage in the medical, manufacturing and logistics sectors. This is also leading to a sense of crisis at local governments as well, seen with the collapse of the medical service supply system under “Tokyo centralization,” the rapid increase of the vulnerable in transportation due to the super-aging of rural areas, and the risk of extinction of local communities. The analysis on the healthcare and medical care sectors was conducted in chapter 2, and the manufacturing, mobility, and logistics sectors in Chapter 3, and the local revitalization in Chapter 4 respectively. And chapter 5 of conclusion remarks presents policy implications for the Korean government.
Topic:
Demographics, Industrial Policy, Science and Technology, Nuclear Power, and Economy
Political Geography:
Japan and Asia

198. Economic Policies of GCC Countries in the Era of Low Oil Prices and Their Policy Implications for Korea

Author:
Kwon Hyung Lee, Sung Hyun Son, Yun Hee Jang, and Kwang Ho Ryou
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Over the past several decades, the six member countries of the Gulf Cooperation Council (GCC) have implemented economic policies for industrial diversification to lessen severe dependence on the oil industry. Such policy efforts have been driven by their awareness of macro-economic and structural risks from heavy volatilities in international oil markets in terms of fiscal and trade sectors. For instance, the drop in international oil prices reduces export performance in the oil and natural gas sectors, which in turn results in a decline in the stability of fiscal revenue. The recent trends of low oil prices since 2014, as well as high unemployment rates, have strengthened the policy regime for industrial diversification and job creation supported by mid- to long-term economic plans of the GCC countries. This report reviews what has been emphasized in the areas of industrial, employment, trade and investment policies. We then derive implications for Korean companies and policymakers for sustainable cooperation between Korea and the Middle East.
Topic:
Oil, Economy, Diversification, and Trade
Political Geography:
Asia, Korea, and Gulf Nations

199. The Effects of US-China Rivalry on Latin America and Their Implications

Author:
Sungwoo Hong, Yeo Joon Yoon, Jino Kim, Jeewoon Rim, and Jimin Nam
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The conflict between the United States and China may be the issue of most importance as well as interest to the world, prior to COVID-19. This conflict between the two countries is appearing not only in the economic sector, but also in various field such as politics, diplomacy, and military affairs. Such competition between the two countries is likely to escalate further as multilateral systems such as the WTO are threatened and protectionism intensifies in the post-COVID-19 world. Even within Latin America, the competition between the two countries frequently appears in a variety of forms. Conflicts between the United States and China in Latin America tend to occur mainly in the infrastructure sectors. Furthermore, the United States pressured Latin American countries to choose between the United States and China, with the results of this pressure depending on the political orientation of the ruling government. In order to investigate the impact of retaliatory tariffs between the two countries on Latin American countries’ exports and welfare, we employ an event analysis for exports and computational general equilibrium (CGE) model for welfare, with Argentina, Brazil, Mexico, and Chile as the subject of our analysis. Based on the outcome of the event study, Brazil’s exports to the United States moderately increased due to the tariff imposition, and such an effect persisted for short term. Its exports to China rose considerably immediately after the tariff imposition, and then the impact tended to decrease over time. By contrast, it is difficult to conclude that the tariff imposition had a statistically significant and lasting effect on the exports of the remaining three countries to the United States and China. As a result of the analysis using the CGE model, meanwhile, the tariffs imposed between the United States and China trivially increased the welfare of Latin American countries.
Topic:
Foreign Policy, Economy, Tariffs, Exports, Trade, and Rivalry
Political Geography:
China, Asia, South America, Latin America, Korea, and United States of America

200. China's Blockchain and Cryptocurrency Ambitions: The First-mover Advantage

Author:
Alice Ekman
Publication Date:
07-2021
Content Type:
Policy Brief
Institution:
European Union Institute for Security Studies
Abstract:
China was initially cautious in the development and application of blockchain technology. Among the technology’s best-known attributes are the relative anonymity and immutability of the information, as every blockchain transaction has a digital record and signature that can be identified, validated, stored and shared. This technology could therefore become a double-edged sword for the Communist Party of China (CPC), as it goes against the government’s efforts to censor content it considers sensitive and, in more general terms, efforts to assert its cyber-sovereignty. However, after at first observing the emergence of blockchain technology with concern, China’s central government has increasingly seen it as an opportunity, as has been the case with most emerging technologies. Since the launch of the 13th five-year plan in 2016 and the release of the first White Paper on Blockchain Technology and Application Development by the Ministry of Industry and Information Technology the same year, the CPC has increasingly considered that blockchain could become an economic, political and geopolitical asset for the country, if ‘guided’ well. China has continued to shape its positioning on and conceptualisation of blockchain technology on a regular basis over the last 5 years: the China Blockchain Industry White Paper (1) was published in 2018, another White Paper entitled Blockchain Technology Application in Judicial Evidence Storage was published in 2019 (2) and the 14th five-year plan (2021–2025), released in March 2021, also refers to blockchain and cryptocurrency (see timeline diagram on page 7) (3). China’s unique approach to blockchain is conditioned precisely by this paradox, stemming from the decentralised nature of the technology and the highly centralised nature of the Chinese political system. While blockchain technology is essentially decentralised, regulations in China have aimed to guarantee state control over its development and application. As part of this dual policy, which is analysed in the first part of the Brief, the Chinese government has launched its own digital currency – the digital yuan. At the same time, it dislikes bitcoin, which relies on a truly decentralised type of blockchain. Although blockchain is best known for being the technology behind cryptocurrency, the Chinese government’s approach towards blockchain is very comprehensive, going far beyond cryptocurrencies. It promotes application of the technology in a variety of fields, ranging from energy conservation to urban management and law enforcement, and has strong ambitions to become the world leader in the field. In October 2019, China’s President Xi Jinping, speaking at a study session for members of the Politburo, declared that he wanted the country to be a ‘rule-maker’ on blockchain, suggesting that this technology will increasingly become a key arena in the country’s race against the United States for technological supremacy (4). Blockchain has become a fast-growing sector in China over the last two years. But is China likely to succeed in the global promotion of an alternative form of blockchain? This Brief answers this question by analysing the development of different applications at national level, before and during the Covid-19 pandemic, but also the emergence of international cooperation on blockchain and cryptocurrency.
Topic:
Science and Technology, Cryptocurrencies, and Blockchain
Political Geography:
China and Asia