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1. Immaterial Competition: Rethinking the Roles of Economics and Technology in the US-China Rivalry

Author:
Arthur Tellis
Publication Date:
05-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The US-China rivalry is likely to be the fulcrum around which international affairs are structured in the twenty-first century, akin to the Cold War from 1947 to 1991. This rivalry, like its predecessor, emerges from divergent geopolitical interests and imperatives. While the Chinese Communist Party’s aims are many, various, and subject to change, they include its continued control of the Chinese State; economic and technological modernization and leadership; internal order; complete union with Taiwan on Beijing’s terms; certain territorial concessions from its neighbors; and the disestablishment of security arrangements across the Indo-Pacific that it views as threatening and trammeling. The latter three are in direct conflict with US interests and imperatives in the Indo-Pacific: prohibiting China’s unilateral modification of the status quo vis-à-vis Taiwan; preserving the sovereignty and territorial integrity of its allies and partners; and maintaining its military partnerships and presence in the region. These antithetical interests animate a larger struggle for hegemony in the Indo-Pacific and serve as the terms on which this contest will be decided. Explanations of the rivalry as an ideological contest or a competition born from competing economic interests are less compelling by comparison. The United States and China are motivated to an extent by ideological imperatives, but these do not appear to propel or serve as the central stakes for the rivalry as much as they affect each’s disposition toward the other. Long-standing trade, investment, and commercial disputes and competition, meanwhile, are not so substantial that they motivate the rivalry. While these issues are impactful to niche communities and conspicuous to national policymakers, they are not particularly consequential for national prosperity. The logic of competition, trade, and globalization, in fact, suggests that the US-China commercial relationship is mutually beneficial, notwithstanding each’s concerns with the other’s economic statecraft and market-leading firms. In their geopolitical rivalry, there are a few key forces or contests of interest: path dependence, regime continuity, prudent strategy, third-party alignments, and the balance of military forces in the Indo-Pacific. Each affects the United States’ and China’s ability to achieve their ends and shapes their rivalry. Economic and technological statecraft, by contrast, is largely peripheral to these ends as it does not effectively advance political objectives relevant to territory, borders, security architectures, and national defense. That is not to suggest that economic and technological factors are irrelevant, however; they shape, constrain, and advantage the United States and China across their rivalry’s key forces and contests of interests. Particularly noteworthy are economic and technological factors’ impact on the military balance. Tradition and intuition hold that nations with bigger and more advanced economies are better postured to resource, procure, and manufacture military equipment and can therefore generate greater military power. In the case of the US-China military competition, however, total military power is less relevant than the specific military balance in the Indo-Pacific, in which the distribution and strength of forces in the theater, the capability and reliability of key materiel inputs of outsized importance, and the operational concepts and tactics with which each’s military fights are more important. Total military power—and in particular greater military equipment—matters on the margin, of course, if only because the party with the greater mass and quality of materiel will be able to retain more forces in the Indo-Pacific, maintain more of these key materiel inputs, and develop novel operational concepts and tactics tailored to their superior materiel. Neither the United States’ nor China’s total economic production, public balance sheet, high-technology commercial firms, and scientific production are likely to provide a decisive or lasting advantage on this count. Each country’s economy can support substantially greater military spending, limiting the extent to which one can derive an advantage from the other’s more binding constraints. The capacity and maturity of each country’s defense industrial base is of greater relevance, but these are flexible quotients that investment can improve. This elasticity of defense production suggests that microeconomic endowments may be binding in the short run but variable in the longer run, meaning that policy choices—rather than existing economic endowments—constrain military production. Technological endowments, informing each country’s capacity for broad innovation, are of similarly bounded importance because military technology is somewhat narrow and other factors, such as military procurement processes and inflexibility in concepts of operation, limit the extent to which superior technology translates into military advantage. The fundamental result of this argument is that the concerns that propel the emerging US-China economic and technological competition are ultimately not all that relevant to the matters at the core to their rivalry and to the instruments of national power most relevant to these issues. The US should therefore be wary of policies ostensibly demanded by economic and technological competition and may find its interests better served by limiting its rivalry with China to military competition driven by its core geopolitical interests.
Topic:
Economics, Science and Technology, Strategic Competition, and Rivalry
Political Geography:
China, Asia, North America, and United States of America

2. Understanding and Countering China's Approach to Economic Decoupling from the United States

Author:
John Lee
Publication Date:
08-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
Many experts have highlighted American efforts to partially decouple from China. Yet China began pursuing a far more ambitious and comprehensive decoupling strategy vis-à-vis the United States long before Donald Trump entered the White House. This monograph examines China’s evolving approach to economic decoupling from the US. It makes the following arguments and conclusions. First, on the back of a preexisting mercantilist political economic structure, China has been explicitly pursuing economic decoupling from US and allied economies on Chinese terms for at least a decade. Second, while the US seeks to decouple some aspects of its economic activity from China, the latter seeks to dominate vast segments of the Asian economy and to decouple these segments from the US. This is the Chinese strategy and threat that the US vastly underappreciates. Third, the most important segments are the high-tech and high-value sectors. These sectors are where competition is the most consequential and where decoupling on US terms needs to occur. Fourth, China faces increasingly serious problems and obstacles regarding its decoupling strategy. Many of these arise out of structural weaknesses inherent in its political economy. The monograph is written to assist the Biden administration and those who follow it to possess a deeper understanding of: China’s actions and the motives behind them; China’s strengths, weaknesses, and vulnerabilities; and How the US and its allies can craft an evolving approach that better plays to their individual and collective strengths and advantages. China hopes the US and its allies will adopt a cautious, gradualist, and ineffective approach to countering Beijing’s strategy and objectives. The Chinese Communist Party knows the US and other advanced economies still have immense advantages despite clever Chinese messaging to the contrary. The US and its allies continue to enjoy considerable leverage and remain well placed to partially decouple from China on their preferred terms, but they need to act quickly, collectively, and decisively.
Topic:
International Relations, Foreign Policy, Defense Policy, Economics, and National Security
Political Geography:
China, Asia, North America, and United States of America

3. Chinese Information and Influence Warfare in Asia and the Pacific

Author:
John Lee
Publication Date:
09-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The People’s Liberation Army’s increasingly provocative and reckless activities in and around disputed zones such as Taiwan, the Senkaku Islands, and the South China Sea constitute only one means through which Beijing seeks to change key aspects of the regional order and compel others to “accept its interests.” However, the Chinese Communist Party and PLA are already decades into China’s information and influence war, which is designed to either weaken the will and capabilities of the United States and its allies should military conflict break out or, even better, eliminate the need for China to use military force to achieve its primary objectives (i.e., to “win without fighting”). In this context, the PLA is several steps ahead of the West; whereas Western analysts observe that the PLA is operating in the “grey zone,” the PLA is instead redefining and expanding this grey zone by manipulating how other countries think about it. With respect to this so-called grey zone, a cost-benefit analysis encompassing both objective and subjective elements typically determines an entity’s decision to respond with military force. For example, crafting narratives about the PLA’s military superiority, elite capture, ability to foment disunity within a target country, or normalization of coercion raises the West’s threshold of what provocations demand a military response—thereby expanding the grey zone within which the PLA and CCP are allowed to operate. Thus, Beijing is well ahead of the US and its allies in conceptualizing and operationalizing the use of military actions other than (kinetic) war to achieve political or strategic objectives. Finally, Asia and the Pacific constitute both the primary and most suitable region within which the Chinese can conduct information and influence warfare. These sub-regions’ unique material, geographical, ideational, and cultural characteristics render them especially suitable for Beijing to successfully wage political warfare. This policy memo describes the key objectives, strategies, and tactics of Chinese information and influence warfare developed and refined for use in the Asia-Pacific region. It focuses on maritime Southeast Asia and the Pacific, the areas of highest interest for the US, Australia, and their allies. Offering Singapore, Thailand, and the Solomon Islands as three pertinent case studies, the memo also lays the groundwork for an examination of effective US and allied counters to Beijing’s activities in these contexts, which follow-up reports in this series will present.
Topic:
Foreign Policy, Economics, National Security, Territorial Disputes, and Information Warfare
Political Geography:
China and Asia

4. The Mixed Record of China’s Belt and Road Initiative

Author:
Thomas J. Duesterberg
Publication Date:
10-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
China’s Belt and Road Initiative (BRI), a signature program of Xi Jinping, has had undoubted success in supporting Xi’s ambitions to reestablish China as a global leader while strengthening its mercantilist economy. Nonetheless, developed and developing countries are reconsidering the program because of its success—largely for China itself—and because of the global economic and political crises since the onset of the COVID-19 pandemic. BRI also has increasingly visible problems caused by its operating structure, prompting participants and developed countries whose geoeconomic and geopolitical interests are undermined by the program’s expansion to reassess it. Continued BRI growth is at best questionable and probably unlikely in the wake of growing pushback to the program as well as growing problems inside China itself.`
Topic:
Economics, Infrastructure, Belt and Road Initiative (BRI), and Xi Jinping
Political Geography:
China and Asia

5. The Diminishing Path to Growth: Can Xi Jinping Avoid Crisis during China's Economic Transition

Author:
Thomas J. Duesterberg
Publication Date:
12-2021
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
Since Deng Xiaoping changed the trajectory of Chinese economic policy in 1978, the People’s Republic of China (PRC) has amassed an impressive record of economic growth. Starting as a poverty-stricken agricultural society under rigid socialist rule, the country has grown steadily and rapidly to become the second largest economy in the world and carved out a growth path whose strength and longevity is historically unprecedented. As the 21st century has unfolded, the PRC has become a near peer competitor to the United States and other developed countries in terms of economic and political power. It is deploying this power in multiple ways that explicitly challenge US leadership in both the economic and global political spheres. If the PRC manages to maintain recent growth rates of around 6 percent per year, it will soon overtake the United States as the world’s largest economy and enhance its ability to challenge the global US leadership position, which has been a pillar of stability since World War II. The US and its allies had hoped that the PRC would become a responsible stakeholder in a liberal international order, but these hopes have been undermined in recent years by China’s increasingly apparent mercantilist economic policies, its aggressive expansion of political power, the resurgent dominance of state-owned enterprises, and the ever-more evident suppression of political liberties and traditional cultures in its sphere of influence. Many economists and political analysts, however, have come to question whether the top-down, mercantilist economic system in the PRC is sustainable in the medium to long term. A number of trends suggest weaknesses in the traditional economic and political structures that have propelled growth in China: growing private and public sector debt, adversely shifting demography, the return to prioritizing state-run enterprises over private firms, the continued reliance on an export-oriented economic system, growing weaknesses in the financial system, dependence on external commodity and technology suppliers, persistent economic and geographic inequality, and continued reliance on external financing. Recent economic data show that bankruptcies are growing, returns on investment are shrinking, and capital controls are contributing to unrealistic valuations of internal capital stock and housing stock. Additionally, regulations are stifling innovative sectors of the economy, and opaque and unregulated consumer financing products are undermining central bank monetary policy and contributing to over-leveraged balance sheets among consumers and small businesses. Consumer purchasing power that is consistently too weak to absorb domestic production, along with incentives to increase that production, has resulted in sustained trade surpluses that create a closed loop of increased investment in manufacturing and the need for growing markets. More recently, US-led efforts to deny China access to certain high-technology products and materials have underscored Chinese vulnerabilities in key sectors like telecommunications and semiconductors. This dynamic results in trade tensions with developing countries and in economically questionable investment in the developing world. These tensions, along with the undermining of developing world markets through subsidized PRC production, are increasingly causing costly disruptions in trade flows and placing pressure on the state banking system, which is the source of most external financing. If the mounting problems with the current Chinese economic model result in material slowing of growth or even sustained recession in the PRC, this would have substantial impact on the United States and its allies in two important ways. First, given that the PRC is the second largest (or in some measures the largest) economy in the world and has been an engine of growth for economies in Europe and the rest of Asia, slower growth or recession in China would likely lead to a global slowdown or recession. Second, because growth has immense political salience in the PRC—it justifies the authoritarian system of governance—a significant slowdown or recession could lead to political instability. Given Chinese nationalist rhetoric and revanchist ambitions toward Taiwan, political instability could in turn motivate risky military activities that escalate into confrontations with democratic, market-oriented countries. From the perspective of the United States, a slowdown could exacerbate the already serious trade and economic tensions, especially if nationalist forces in China sought to cast the US as the scapegoat for its internal problems. In sum, a better understanding of the weaknesses within the PRC growth model and its potential frailties would allow policymakers to craft targeted tools when needed to support US policy objectives, either economic or political, and to deter PRC aggression or the undermining of US economic interests. Policy tools such as trade tariffs, export controls, and limitations on direct investments and access to US financial markets could have material impact on Chinese performance. A more robust understanding of the impact of these tools would help the United States and its allies craft overall strategies to meet the Chinese economic and political challenge. Even while operating in a time frame longer than twelve months, many financial analysts have begun to describe the unfolding economic challenges in the PRC. The general public, including political opinion leaders and government analysts, have not generally understood the extent of the danger of economic crisis in China. Instead, the common assumption is that growth in the PRC, albeit a continuing economic threat to the US economy, is not in danger of faltering. This white paper takes a different view, exploring the structural weaknesses characterizing the current Chinese economic model and the recent policy changes initiated by President Xi Jinping. Its working assumption is that the combination of these two factors will result in a material weakening of the dynamic growth China has enjoyed since Deng Xiaoping set his country on a more Western-style growth path in the late 1970s. At a minimum, various factors will slow growth to levels more characteristic of modern developed economies; and at the extreme these factors may possibly lead to negative growth and weakening of the political strength that underpins the dictatorship of the Chinese Communist Party (CCP).
Topic:
Foreign Policy, Economics, Economic Growth, and Xi Jinping
Political Geography:
China and Asia

6. Xi Jinping’s Evergrande Dilemma

Author:
John Lee
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
Evergrande is one of the top-two real estate developers in a still highly fragmented Chinese sector. Its main strategy is to achieve ever-increasing scale (rather than profitability) in order to move ahead of and crowd out commercial competitors. It has also amassed the largest land reserves of all Chinese developers, which were financed through massive borrowings. By 2018, Evergrande held 822 pieces of undeveloped land in 228 cities, with a planned gross floor area of 3.28 billion square feet of new homes—the equivalent of 10 percent of Germany’s entire housing stock. It paid $75 billion just for this undeveloped land. Although Evergrande’s market share is only around 4 percent, its borrowings stand out. Its current balance sheet liabilities amount to an estimated 2 percent of China’s gross domestic product (GDP), while its off-balance-sheet liabilities could be another 1 percent of China’s GDP. This makes Evergrande the most indebted property developer in the world. Burdened by this debt, struggling to meet its debt interest and repayment obligations, and viable only if property asset values and sales continue to increase, Evergrande faces possible financial collapse—an event bound to have flow-on effects for the Chinese economy. However, the unusually high global interest in Evergrande has arisen because its woes are increasingly seen as symptomatic of those faced by the broader Chinese economy, which is struggling with enormous levels of indebtedness and overreliance on the real estate sector. Debt held by nonfinancial institutions in China increased from about 115 percent of GDP in 2010 to around 160 percent of GDP currently. This is the most rapid and largest increase in a 10-year period for any major economy and makes the level of debt held by Chinese nonfinancial institutions one of the highest in the world. The real estate sector accounts for around 15 percent of GDP, while property services account for another 14 percent—the highest in any developing economy. The share of the real estate sector as a proportion of GDP was only about 4 percent in 1997 and 9 percent in 2008. Since 2008, up to a third of all domestic fixed investment has gone into real estate, and up to half of total national debt is linked to the real estate sector.
Topic:
International Relations, Foreign Policy, Debt, Economics, Markets, and Business
Political Geography:
China and Asia

7. The Chinese Communist Party’s Economic Challenge to the Free World

Author:
Miles M. Yu
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
The Chinese economy and the philosophical roots of China’s system have greater implications for the United States economy than many assume. The one critical fact to understand about the People’s Republic of China is that it is a communist dictatorship ruled by a Marxist-Leninist party. The Party is dedicated to maintaining and strengthening its monopoly on all powers in the world’s most populous country and to mounting the most serious challenge to the free world since the Cold War. This policy memo will examine the Chinese economy’s distinct traits, how it operates, and why it thrives under a monopolistic government that exploits and challenges the global free market system, along with possible policy recommendations for the United States and its allies. Unlike most other communist countries, China has been afforded the benefits of a global free-market system and enjoys largely open access to international trade, capital markets, and advanced technologies. The paradox of a communist nation fully participating in a largely capitalist system has enriched and strengthened the Chinese Communist Party (CCP), to the point where Beijing poses a mortal threat to the United States and to the international free market economic system that has enabled the rise of the communist state. The West played a role in creating the current state of play. But too many conversations in the United States focus only on our own strategic thinking. In his historic speech at the Richard Nixon Library in July 2020, former Secretary of State Mike Pompeo aptly described the situation and how we got here: “Our policies—and those of other free nations—resurrected China’s failing economy, only to see Beijing bite the international hands that were feeding it.” As President Richard Nixon admitted in his later years, his initiative to open up China in 1972 might have created a Frankenstein.
Topic:
Foreign Policy, Communism, Economics, and Chinese Communist Party (CCP)
Political Geography:
China, Asia, and United States of America

8. Ambition and Overreach: Countering One Belt One Road and Beijing’s Plans to Dominate Global Innovation

Author:
John Lee
Publication Date:
02-2020
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The first monograph in this series, China’s Economic Slowdown: Root Causes, Beijing’s Response and Strategic Implications for the US and Allies, examined the structural problems in the Chinese economy that have led to a recent permanent slowdown after three decades of double-digit growth rates. The monograph focused on the political and economic costs of the slowdown and efforts to stabilize an economy that has poured far too much national wealth into commercially unproductive areas. Yet the Communist Party is not passively awaiting an unhappy economic fate in connection with its mounting imbalances and domestic economic dysfunction. In many respects, its leaders have been highly creative in seeking solutions that do not entail a weakening of the party’s hold on economic power. On the contrary, the party has been busily shaping and pursuing grand strategic policies such as the Belt and Road Initiative (BRI) and Made in China 2025 (MIC 2025) to solve or alleviate many of its domestic political-economic problems. This monograph, part two in the series, examines how the US and its allies can confront and counter these Chinese strategies and initiatives. It will do so by taking seriously the challenge they present and suggesting responses that take into account Chinese vulnerabilities and the points of leverage available to the US and its allies. This linking of China’s vulnerabilities and weaknesses, on the one hand, and its ambition and purpose with respect to its outward-focused policies, is essential for effective policy responses. If the domestic is not linked with the external, US policies are much more likely to become complacent, counterproductive, or susceptible to overreaching. In linking analyses of Beijing’s domestic political economy with its external policies, the monograph will challenge some enduring but incorrect grand narratives that play into the hands of the CCP.
Topic:
Foreign Policy, Economics, Science and Technology, and Trade
Political Geography:
China and Asia

9. A Global Survey of US-China Competition in the Coronavirus Era

Author:
Eric B. Brown, Patrick M. Cronin, H.R. McMaster, Husain Haqqani, Aparna Pande, Satoru Nagao, John Lee, Seth Cropsey, Peter Rough, Liselotte Odgaard, Blaise Misztal, Douglas J. Feith, and Michael Doran
Publication Date:
05-2020
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The outbreak of the novel coronavirus has introduced a series of new stresses and factors in the US-China relationship. While the world has struggled to contain the pandemic and its tragic repercussions, the People’s Republic of China has used the outbreak to launch a global campaign of misinformation, further its economic coercion through the Belt and Road Initiative, and continue military expansion efforts in the South China Sea. China’s attempt to exploit the pandemic for political, strategic, and economic gain is problematic in the current environment, yet it is consistent with, and a continuation of, China’s long-term strategy. This report offers a global survey and assessment of attempts by the Chinese Communist Party (CCP) to expand its influence, including by exploiting the pandemic. As the United States and its allies focus on combatting the virus and salvaging their economies, there is an opportunity to better understand China’s strategy and develop a unified response.
Topic:
International Relations, Foreign Policy, Economics, Strategic Competition, and COVID-19
Political Geography:
China, South Asia, Asia, North America, and United States of America

10. Boosting Taiwan’s Economic Status is Good Strategy, Economics, and Domestic Policy

Author:
John Lee
Publication Date:
06-2020
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
This report makes the following arguments: From Taiwan’s perspective, the greater its economic presence and importance to the world, the better positioned it is to reduce its dependency on China and maintain its autonomy. This also serves US interests. From the US perspective, deepening the economic relationship with Taiwan in strategic ways will assist it in achieving greater economic distance from China and reducing the extent to which China can capture and dominate global supply and value chains in the future. The US and Taiwanese economies are largely complementary, and this can become even more so. Thus, a deeper bilateral economic relationship will be generally consistent with domestic economic objectives, such as prioritizing high-value job creation and preventing high-value supply chains from remaining in China or leaving the United States. The report offers recommendations to: help prevent the hollowing out of Taiwan’s competitive strengths; help Taiwan broaden and deepen its participation in the regional and international economic space, which is currently being narrowed by China; assist with Taiwan’s desire to lower dependency on China-based supply chains, especially with respect to high-value-added processes; encourage more bilateral investment, intra-industry relations and firm-to-firm activity between the United States and Taiwan.
Topic:
International Relations, Foreign Policy, Economics, and Domestic Policy
Political Geography:
China, Taiwan, and Asia

11. Next Steps for US Trade, Manufacturing, and Supply Chains After COVID-19

Author:
Thomas J. Duesterberg
Publication Date:
07-2020
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The imperative to return supply chains to the United States for products important to national defense, medical security, and competitiveness in key industrial and technology sectors is not new. The explosive growth of the Chinese manufacturing sector, its mercantilist challenge to the world trading system, and its impact on jobs and industrial leadership in the United States is well known and well documented. This challenge has prompted new research and policies to help reverse the erosion of US supply chains. US technology leadership has been undermined by China’s forced technology transfer, theft of intellectual property, and subsidization of traditional and new higher technology sectors. In turn, the loss of global markets and US manufacturing jobs have resulted in social problems of increasing devastation to communities in industrial areas. China’s economic growth depends, in a historically unprecedented way, on its export model and the suppression of domestic consumption. This results in a cycle of overproduction, expansion of external spheres of economic influence, and dumping of products abroad. In recent years, the United States has begun to challenge the Chinese model. However, much work remains to be done to accomplish the goal of ending mercantilist practices, establishing a level playing field for US producers, and reinvigorating domestic production. Critical supply chains for US national defense and high technology leadership have become overly dependent on China and other foreign sources. The vulnerability of supply chains has been demonstrated by interruptions in supply of key materials by both natural disasters and political decisions such as Beijing’s cutoff of rare earth metals a decade ago. More recently, in July 2020, the production of critical personal protective equipment was interrupted by massive flooding in the interior of China. Beyond Beijing’s unfair practices, China is a continental economy with the ambition to displace the United States as the leader in the global economy of the 21st century and has the economies of scale to represent a serious, long term threat to US leadership and markets. The COVID-19 pandemic has accelerated these preexisting trends and underscores the importance of bringing industrial supply chains, including medical products, back to the United States. First, the cut-off of medical supplies, not just from China but from Europe and other allies, brought the vulnerabilities of relying on outside sourcing into clearer and more immediate focus. Ninety countries blocked the exports of medical products during the early months of the pandemic. Second, border closures around the world, even within the European Union (EU), added to the worries about supply chain interruptions, including for workers and logistics. Seventy percent of the world’s points of entry restricted foreign travelers at some point as the pandemic grew. Third, border closures and supply chain interruptions increased tensions between nations, especially between the United States and China, which was criticized for its suppression of information at the start of the pandemic. Beijing’s brazen imposition of a new security law in Hong Kong while the world was preoccupied by the pandemic further eroded its global standing, especially in Europe. Fourth, the economic collapse due to the pandemic response again focused attention on the need to create more domestic jobs, including those in the hard-hit industrial sector. Finally, all these developments led allies such as the United Kingdom, Japan, and the EU to advance new policies meant to bring production back to home territories. These trends support initiatives to increase the resiliency of domestic production, even beyond the parameters of defense and medical security.
Topic:
Economics, Science and Technology, Manufacturing, Trade, COVID-19, and Supply Chains
Political Geography:
China, Asia, North America, and United States of America

12. Double-Edged Aid: China’s Strategy to Gain Influence through Regional Assistance

Author:
Liselotte Odgaard
Publication Date:
03-2020
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
This report addresses China’s approach to development in Central Asia, Southeast Asia, East Africa, and the Arctic. China has worked through the Shanghai Cooperation Organization to meet Russian demands for continued regional primacy in Central Asia, helping Beijing foster economic and social dominance, access strategic energy resources, and treat the Uyghur minorities as a problem of terrorism rather than a development issue. In Southeast Asia, China has worked through the Association of South-East Asian Nations (ASEAN) to meet regional demands for soft and hard infrastructure to legitimize China’s growing strategic presence. China is therefore able to undermine the regional economic and security foothold of the US alliance system and challenge the interpretations of the Law of the Sea that legitimizes the military presence and activities of extra regional powers. In East Africa, China has cooperated with the African Union (AU) and the East African Intergovernmental Authority on Development (IGAD) to address regional demands for hard and soft infrastructure without political conditions, to link antipiracy problems to problems of poverty, and to mediate local civil wars. This has helped China establish an economic and strategic foothold at the intersection of the Indian Ocean and Middle East, projecting power far from its shores. In the Arctic, China has established research stations that function as both environmental research laboratories and military surveillance stations.
Topic:
International Relations, Economics, Health, Foreign Aid, Regulation, and Trade
Political Geography:
China and Asia

13. Crisis from Kolkata to Kabul: COVID-19’s Impact on South Asia

Author:
Husain Haqqani and Aparna Pande
Publication Date:
05-2020
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The world’s most populous region, South Asia, with almost 1.9 billion people living in eight countries, has so far had fewer reported infections and fatalities per capita from the novel coronavirus than projected in early models. However, the region is unlikely to escape the widespread disruption and damage felt across the globe, and its worst health-care crisis may be yet to come. In South Asia, as in other regions, the COVID-19 pandemic is testing the capacities of states to provide security and effective healthcare and to maintain essential services. It is also having an impact on fragile democratic institutions and societal bonds, in addition to putting considerable strains on the economy. [...] Following is a country-by-country report, with inputs from experts on the ground, on the coronavirus pandemic’s impact in South Asia and its human, economic, and political consequences.
Topic:
Economics, Health, Crisis Management, and COVID-19
Political Geography:
Pakistan, China, South Asia, India, Asia, and Sri Lanka

14. China, 5G, and Dominance of the Global “Infosphere”

Author:
WIlliam Schneider
Publication Date:
09-2019
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
Modern consumer society has rapidly evolved from domination by “things” to domination by information. Once upon a time, for example, a car was an object for personal transportation in which anything more than basic information about speed and fuel level came from and through the driver. Now, the automobile itself provides and processes information with which drivers interact at a much richer level. Back-up cameras, blind spot and lane drift warning lights, hands-free wireless telephony, and GPS have transformed the driving experience fundamentally, even ahead of the truly revolutionary era of self-driving cars. A large and growing fraction of the world’s day-to-day life of individuals, objects, and institutions will be indelibly stored with an electronic “footprint.” The intelligence value of this information from a national security perspective exclusively accessed through a modern communications system dominated by China – 5G – is immense and profoundly threatening. The new dominance of information is simultaneously bewildering and promising. Moreover, as rapid as the pace of development has been over the past decade, it will soon quicken—with broad implications for almost every aspect of human life. An important aspect of this shift has been the convergence of rapidly developing and mutually reinforcing technologies into an infosphere that will incorporate almost all information-based communications and data services in the global information infrastructure. Not coincidentally, an integrated infosphere meets aspirations held by the People’s Republic of China to dominate and control the global information infrastructure. Beijing’s investments in 5G reflect an understanding that this technology is the gateway to control the world’s information infrastructure and growing realm of 5G-dependent technologies. A Chinese-dominated infosphere is, in fact, the “digital road” component of its Belt-and-Road-Infrastructure (BRI). While U.S. policymakers have yet to fully grasp the implications of this emerging infosphere, the components below reflect the enabling dimensions that support China’s effort to dominate the global information infrastructure.
Topic:
Economics, Science and Technology, Internet, 5G, and Information Technology
Political Geography:
China and Asia

15. The Cornerstone and the Linchpin: Securing America’s Northeast Asian Alliances

Author:
Patrick M. Cronin
Publication Date:
10-2019
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
During an era in which strategic gravity is shifting to Asia, the United States cannot be careless in tending to its alliances with Japan and South Korea (the Republic of Korea, or ROK). The three countries face persistent threats from North Korea and from China’s semi-transparent bid for regional hegemony. Meanwhile, rocky relations between Tokyo and Seoul are jeopardizing vital U.S. interests in the Indo-Pacific. The latest disagreement between America’s premier allies raises new questions about alliance strategy, commitment, and burden-sharing. These fissures have become exacerbated as the U.S. pressures allies to increase their contributions to regional security and reciprocal trade. [...] This report seeks to explain why the U.S.-Japan and U.S.-ROK alliance are still a vital means of achieving overlapping strategic interests. At the same time, it also argues that keeping these alliances fit for purpose requires radical change rather than business as usual. Both a rapidly changing security environment and growing intra-alliance squabbling pose dangers that require U.S. leadership. This report concludes with specific ideas for advancing bilateral and trilateral cooperation in the coming months and years, without trying to achieve too much too quickly.
Topic:
International Relations, Foreign Policy, Economics, International Security, and Alliance
Political Geography:
Japan, Asia, South Korea, North America, and United States of America

16. Keeping the Peace in the Pacific: The Next Steps in American Policy

Author:
John Lee and Charles Horner
Publication Date:
04-2014
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
U.S. administrations and officials are consistently caught flat-footed by the increasing assertiveness of the People's Republic of China (PRC) over disputed territories in the East China and South China Seas. This assertiveness is strident, yet controlled. Beijing's objectives in the region, with respect to maritime issues in particular, have been apparent for several decades. While the United States is well aware of the PRC's "talk and take" approach—speaking the language of negotiation while extending de facto control over disputed areas—U.S. policy has been tactical and responsive rather than strategic and preemptive, thus allowing China to control the pace and nature of escalation in executing talk and take.
Topic:
International Relations, Diplomacy, Economics, International Trade and Finance, and Bilateral Relations
Political Geography:
United States, China, and Asia