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12. Japan's "Economic Security" Measures
- Author:
- Didi Kirsten Tatlow and Afra Herr
- Publication Date:
- 02-2022
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- Japan and Germany face an acute dilemma. China, a key trading partner for both nations, uses political warfare and economic statecraft to advance its interests. Like Germany, Japan has a strong SME economy and auto industry, and has dependencies on China. Yet Japan faces more risk due to its geographical proximity to China and territorial disputes. As global tensions grow, Japan is responding robustly by building economic security. Germany, together with the EU and other like-minded partners, should do the same.
- Topic:
- Security, Economics, Politics, and Trade
- Political Geography:
- Japan, China, Asia, and Germany
13. Promoting the Euro – Countering Secondary Sanctions: Germany Should Push to Complete Monetary Union
- Author:
- Markus Jaeger
- Publication Date:
- 02-2022
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- US-Chinese rivalry will increasingly play out in the geo-economic realm. The use of secondary sanctions – especially secondary dollar sanctions – negatively affects German economic interests. The new German government should therefore intensify efforts to promote the euro as an international currency coequal to the dollar in addition to lending its qualified support to EU anti-coercion policies.
- Topic:
- Economics, Sanctions, European Union, Rivalry, and Geoeconomics
- Political Geography:
- China, Asia, and United States of America
14. Beijing Winter Olympics 2022: Sports, Law, and Policies
- Author:
- Tim Harcourt, Deborah Healey, Keiji Kawai, and Yang Pei
- Publication Date:
- 02-2022
- Content Type:
- Policy Brief
- Institution:
- China Studies Centre, The University of Sydney
- Abstract:
- The 2022 Beijing Winter Olympics were hosted amid the Covid-19 pandemic and surrounded by concerns and controversies. This Understanding China Brief results from a roundtable discussion organized by the China Studies Centre and the Centre for Asia and Pacific Law of Sydney University on 3 February 2022 to examine four aspects of the Beijing Olympics: boycotts, COVID- 19 control, law reform, and the economics of the Olympics.
- Topic:
- Economics, Reform, Sports, Conflict, Olympics, Pandemic, and COVID-19
- Political Geography:
- China and Asia
15. Sanctions, SWIFT, and China’s Cross-Border Interbank Payments System
- Author:
- Barry Eichengreen
- Publication Date:
- 05-2022
- Content Type:
- Policy Brief
- Institution:
- Center for Strategic and International Studies
- Abstract:
- In response to Russia’s attack on Ukraine, the United States and a coalition of cooperating countries imposed harsh financial sanctions on the Russian government, corporations, and individuals.1 These sanctions bar Russian banks from using SWIFT (the Society for Worldwide Interbank Financial Telecommunications) to facilitate cross-border payments, prohibit banks from doing most forms of business with Russian entities, and freeze assets held abroad by the Central Bank of Russia in the form of treasury securities and bank deposits. These developments have led Russia, as well as other countries contemplating whether they might find themselves in the same position, to explore alternatives. Such options could include building a substitute for SWIFT to send instructions regarding cross-border interbank transactions; identifying financial counterparties other than Western banks with which to do international business and platforms other than Western clearinghouses through which to make payment; and finding a vehicle other than the dollar for denominating and executing transactions. Specifically, countries are looking to China, which has large internationally active banks, has created its own clearinghouse for cross-border transactions and is embarked on a campaign to encourage broader international use of its currency, the renminbi.2 This note investigates how far China has gone in creating alternatives to SWIFT, Western banks, and the dollar. It explores whether Russia and other countries might be drawn toward this parallel international financial universe and what economic and political implications this has—for the United States, for its geopolitical rivals, and for global economics and politics. China is making strides in fostering cross-border use of the renminbi and building a renminbi-based interbank payments system that can serve as an alternative to SWIFT and Western clearinghouses. However, these remain somewhat limited alternatives—for the moment. The situation could change faster if lent additional impetus by Western sanctions. Thus, countries such as the United States that employ financial sanctions should prepare for the development of alternative financial arrangements in China and possibly elsewhere. This may mean relying more heavily on nonfinancial measures insofar as financial sanctions eventually become less effective.
- Topic:
- Economics, Sanctions, Finance, Borders, and Banks
- Political Geography:
- China and Asia
16. How China’s Human Capital Impacts Its National Competitiveness
- Author:
- Briana Boland, Kevin Dong, Jude Blanchette, and Ryan Haas
- Publication Date:
- 05-2022
- Content Type:
- Policy Brief
- Institution:
- Center for Strategic and International Studies
- Abstract:
- How will the strengths and weaknesses of China’s human capital impact national competitiveness? China’s efforts to maintain economic growth, strengthen supply chains, develop strategic science, technology, engineering, and mathematics (STEM) sectors, and secure a modern military edge hinges on the ability to cultivate and utilize human capital. As the United States and other countries increasingly engage in multidomain competition with China, it is critical to start from a clear-eyed understanding of China’s human capital and Beijing’s strategy for nurturing national talent. Investments in higher education, strategic STEM sectors, and military talent demonstrate key areas in which Beijing is focusing on cultivating human capital. However, China must overcome significant obstacles to innovate as it faces substantial demographic pressures, socio-economic inequalities, and challenges to attracting and retaining top talent both domestically and internationally.
- Topic:
- Economics, Labor Issues, Human Capital, and Strategic Competition
- Political Geography:
- China and Asia
17. CHIPS Act will spur US production but not foreclose China
- Author:
- Gary Clyde Hufbauer and Megan Hogan
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The CHIPS and Science Act, export controls, and agreements with allied countries will accomplish many of their multiple objectives. More US semiconductor fabrication plants will be built, US R&D will be accelerated, and advanced chips and chip-making machines will be denied to China, Russia, and other adversaries. However, the Act will not make a material difference to US chip supplies in the next two or three years. Slower economic growth has already tipped the chips market in favor of ample supplies. While collective measures have inflicted considerable short-term pain on China, causing a sharp drop in the fortunes of its high-tech firms, China will respond by redoubling its self-sufficiency programs. The United States, however, should not mimic China in pursuing self-sufficiency, as US self-sufficiency is an illusion. The United States currently exports high-value chips and imports low-value chips, so increasing self-sufficiency would require the United States to prioritize basic chip production at the same time it is supposed to be competing with China in advanced chip production. Continuing to prioritize advanced chip production—where the United States has a clear advantage—is the most efficient course of action.
- Topic:
- Economics, Legislation, Exports, Production, and Semiconductors
- Political Geography:
- China, Asia, and United States of America
18. South Korea should prepare for its exposure to US-China technology tensions
- Author:
- Mary Lovely and Abigail Dahlman
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The stated goal of the US-led Indo-Pacific Economic Framework for Prosperity (IPEF) is to create standards that enhance and elevate regional trade and investment flows, but it is clearly aimed at reducing the role of China in global supply chains. As China is Korea’s largest trading partner, US policy discouraging Chinese participation in supply chains has immediate detrimental implications for Korean manufacturers. The United States is the second-most important destination for Korean exports. Given the values of these triangular trade flows, Lovely and Dahlman assess South Korea’s exposure to US demands to remove or reduce Chinese participation in the manufacture of exports destined for the US market. The reliance of the proposed framework on certain standards will likely reduce Chinese participation in IPEF trade networks. Korea may benefit from this trend, but IPEF could also increase production costs for Korean companies, especially in the electronics sector, a problem that would worsen if China retaliates against these companies. To reduce these risks, Korea might find it prudent to reduce its reliance on intermediate goods from China for products it produces for export to the United States. The Korean government should also seek to better understand its exposure to US–China trade tensions and diversify its trade relations. Korean firms should start preparing for supply chain disruptions, perhaps by making investments at home. Korea could also help other IPEF members reduce supply chain disruptions while addressing security concerns over China.
- Topic:
- Economics, Science and Technology, Supply Chains, and Competition
- Political Geography:
- China, Asia, South Korea, North America, and United States of America
19. China's CPTPP bid spurs South Korea to act on Asia-Pacific trade pacts
- Author:
- Jeffrey J. Schott
- Publication Date:
- 06-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- China’s sudden application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in September 2021 has broad implications for South Korea’s economic relations with China, Japan, and the United States. In the past, Korea frequently debated but invariably postponed deciding whether to participate in negotiations on the CPTPP, despite the substantial benefits to be gained from doing so. However, China’s application has prompted Korean officials to get off the fence and apply as well. As China moves to deepen its ties to regional partners, Korea needs to follow suit, complementing the ongoing implementation of the Regional Comprehensive Economic Partnership (RCEP) with expedited negotiations to join the CPTPP and participation in the US-led Indo-Pacific Economic Framework for Prosperity (IPEF). Korean participation in the RCEP, CPTPP, and IPEF is desirable and mutually reinforcing and should allow Korea to sustain its strong commercial interests in both the US and Chinese markets.
- Topic:
- Economics, International Trade and Finance, Treaties and Agreements, and Trade
- Political Geography:
- China, South Korea, and Asia-Pacific
20. Don’t Get Caught in the Middle: A Geo-Economic Strategy for Germany to Survive US-Chinese Rivalry
- Author:
- Markus Jaeger
- Publication Date:
- 12-2022
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- The economic fallout from the war in Ukraine has been very significant. The consequences of a war in East Asia involving the United States and China would be much worse. And even if a Sino-US military confrontation can be avoided, geo-economic conflict between the two powers is going to intensify. Washington will put increasing pressure on Germany and Europe to align their policies with Washington’s geo-economic strategy.
- Topic:
- Economics, Strategic Competition, Rivalry, and Geoeconomics
- Political Geography:
- China, Europe, Asia, Germany, North America, and United States of America