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  • Author: Kyle J Wolfley
  • Publication Date: 03-2021
  • Content Type: Research Paper
  • Institution: Department of Social Sciences at West Point, United States Military Academy
  • Abstract: As the COIVD-19 pandemic forced the United States to scale down its massive Defender exercise in Europe, the Chinese military continued its multinational exercise programs with Cambodia, Russia, and Pakistan, despite China’s strict domestic lockdowns. These exercises highlight how China is wielding a form of military power commonly overlooked in assessments of its rise. Today, states leverage their armed forces not only for warfighting or coercion, but also to manage international relationships. Military power includes not only the capacity to conquer and compel, but also the ability to create advantage through attraction and persuasion—a concept I call “shaping.” Unlike military strategies of warfighting or coercion, shaping relies less on force and more on the use of persuasion to change the characteristics of other militaries, build closer ties with other states, and influence the behavior of allies. China’s leaders increasingly understand the value of using their military to shape the international system in their favor. American policymakers, if they wish to compete effectively, ought to take shaping more seriously as well.
  • Topic: Defense Policy, Military Strategy, Hegemony, Pandemic, COVID-19
  • Political Geography: China, Asia, North America, United States of America
  • Author: Steven Rebello, Jesse Copelyn, Sinqobile Makhathini, Boikanyo Moloto
  • Publication Date: 08-2021
  • Content Type: Research Paper
  • Institution: Centre for the Study of Violence and Reconciliation (CSVR)
  • Abstract: Militarisation refers to a process where societies (states, institutions, and citizens) prioritise, organise, prepare for and respond to threats or crises with military action or violence. This policy brief highlights how many countries across the world, including South Africa, adopted a militarised response to the COVID-19 pandemic. In South Africa, this militarised response has been noted by the deployment of the SANDF to assist with the enforcement of COVID-19 regulations as well as through the noticeable increase in the use of excessive force in response to protests.
  • Topic: Disaster Relief, Protests, Violence, Public Health, Pandemic, COVID-19
  • Political Geography: Africa, South Africa
  • Author: Hongyong Zhang
  • Publication Date: 03-2021
  • Content Type: Research Paper
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: Using aggregate-level data on Japanese multinational corporations (MNCs) in major host countries and regions, this paper investigates the impact of COVID-19 on global production and supply chains with a focus on East Asia. I use the numbers of COVID-19 cases and deaths as measures of the impact of the pandemic. I find that the pandemic had substantial impacts on the performance (sales, employment, and investment) of Japanese MNCs and global supply chains (exports to Japan and exports to third countries) in Q1–Q3 2020. China recovered quickly in Q2 and grew in Q3, whilst the countries of the Association of Southeast Asian Nations and the rest of the world had still not fully recovered in Q3 2020. Importantly, lockdown and containment policies in host countries had large negative impacts on the sales and employment of Japanese MNCs. In contrast, I did not find positive effects of economic support policies on firm performance. Interestingly, whilst the firm expectations and business plans of Japanese MNCs were negatively affected by the COVID-19 pandemic, their business confidence increased with strong overall government policy responses in host countries in Q1 2020.
  • Topic: Economic Development , Pandemic, COVID-19, Production
  • Political Geography: Japan, Asia
  • Author: Mitsuyo Ando
  • Publication Date: 03-2021
  • Content Type: Research Paper
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: This paper investigated the impacts of COVID-19 on international production networks in machinery sectors by shedding light on negative supply shocks, negative demand shocks, and positive demand shocks. Specifically, we examined changes in trade in the periods of falling trade during the first wave of COVID-19 using Japan’s machinery trade at the most disaggregated level and decomposed them into two intensive margins, i.e. the quantity effect and the price effect, and two extensive margins, i.e. the entry effect and the exit effect. Our empirical results demonstrated that i) trade relationships for parts and components are robust, and international production networks are almost intact, so far; ii) the intensive margin, mostly the negative quantity effect, induces the largest negative effects in the transport equipment sector amongst four machinery sectors; iii) positive demand shocks for specific products that are related to teleworking, disinfection, and stay-home activities partially explain sectoral differences; iv) direct negative supply shocks from China, suggested by a negative quantity effect and a positive price effect, exist in February 2020, with possible indirect negative supply shocks and substitution of source countries; and v) negative demand shocks are confirmed from negative quantity and price effects in many cases. As of October 2020, Japan’s machinery trade seems to have largely recovered. If the COVID-19 pandemic lasts long, however, prolonged negative demand shocks would hurt production networks in East Asia.
  • Topic: Demand, Manufacturing, Economic Development , Pandemic, Industry, COVID-19, Supply
  • Political Geography: Japan, Asia
  • Author: Mitsuyo Ando
  • Publication Date: 03-2021
  • Content Type: Research Paper
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: This paper investigated the impacts of COVID-19 on international production networks in machinery sectors by shedding light on negative supply shocks, negative demand shocks, and positive demand shocks. Specifically, we examined changes in trade in the periods of falling trade during the first wave of COVID-19 using Japan’s machinery trade at the most disaggregated level and decomposed them into two intensive margins, i.e. the quantity effect and the price effect, and two extensive margins, i.e. the entry effect and the exit effect. Our empirical results demonstrated that i) trade relationships for parts and components are robust, and international production networks are almost intact, so far; ii) the intensive margin, mostly the negative quantity effect, induces the largest negative effects in the transport equipment sector amongst four machinery sectors; iii) positive demand shocks for specific products that are related to teleworking, disinfection, and stay-home activities partially explain sectoral differences; iv) direct negative supply shocks from China, suggested by a negative quantity effect and a positive price effect, exist in February 2020, with possible indirect negative supply shocks and substitution of source countries; and v) negative demand shocks are confirmed from negative quantity and price effects in many cases. As of October 2020, Japan’s machinery trade seems to have largely recovered. If the COVID-19 pandemic lasts long, however, prolonged negative demand shocks would hurt production networks in East Asia.
  • Topic: Demand, Manufacturing, Economic Development , Pandemic, Industry, COVID-19, Supply
  • Political Geography: Japan, Asia
  • Author: Mitsuyo Ando
  • Publication Date: 03-2021
  • Content Type: Research Paper
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: This paper investigated the impacts of COVID-19 on international production networks in machinery sectors by shedding light on negative supply shocks, negative demand shocks, and positive demand shocks. Specifically, we examined changes in trade in the periods of falling trade during the first wave of COVID-19 using Japan’s machinery trade at the most disaggregated level and decomposed them into two intensive margins, i.e. the quantity effect and the price effect, and two extensive margins, i.e. the entry effect and the exit effect. Our empirical results demonstrated that i) trade relationships for parts and components are robust, and international production networks are almost intact, so far; ii) the intensive margin, mostly the negative quantity effect, induces the largest negative effects in the transport equipment sector amongst four machinery sectors; iii) positive demand shocks for specific products that are related to teleworking, disinfection, and stay-home activities partially explain sectoral differences; iv) direct negative supply shocks from China, suggested by a negative quantity effect and a positive price effect, exist in February 2020, with possible indirect negative supply shocks and substitution of source countries; and v) negative demand shocks are confirmed from negative quantity and price effects in many cases. As of October 2020, Japan’s machinery trade seems to have largely recovered. If the COVID-19 pandemic lasts long, however, prolonged negative demand shocks would hurt production networks in East Asia.
  • Topic: Demand, Manufacturing, Economic Development , Pandemic, Industry, COVID-19, Supply
  • Political Geography: Japan, Asia
  • Author: Kozo Kiyota
  • Publication Date: 03-2021
  • Content Type: Research Paper
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: Global trade is expected to suffer a significant contraction as a result of the COVID-19 pandemic. Did the relative importance of countries in the world trade network change as a result of the pandemic? The answer to this question is particularly important for Association of Southeast Asian Nations (ASEAN) countries because of their strong trade linkages with China, where the COVID-19 virus originated. This paper examines how the world trade network has changed since the COVID-19 pandemic, with a particular focus on ASEAN countries. Tracking the changes in centrality from January 2000 to June 2020, we find no evidence that centrality changed significantly after the pandemic started for most ASEAN countries. Our results suggest that the relative importance of the ASEAN countries in the world trade network is unchanged and will remain unchanged even after the pandemic.
  • Topic: Globalization, International Trade and Finance, Pandemic, COVID-19
  • Political Geography: Asia, Southeast Asia
  • Author: Kazunobu Hayakawa
  • Publication Date: 03-2021
  • Content Type: Research Paper
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: This study empirically examines how economic and social activities in Asia were affected by the COVID-19 pandemic by using the emissions amounts of various air pollutants to represent those activities. Review of the emissions data suggests that from 2019 to 2020, the amount of emitted air pollutants decreased in most subnational regions in Asia. Data also show how economic and social activities have restarted in some regions; regression analyses are used to uncover the regions that restarted early. Regional characteristics are identified by employing a remotely sensed land cover dataset (i.e. ESALC) and OpenStreetMap. Results reveal that for Association of Southeast Asian Nations (ASEAN) members, economic and social activities in cropland, industrial estates, accommodations, restaurants, education, and public services still have not returned to normal.
  • Topic: Environment, Economy, Pandemic, COVID-19, Air Pollution, Economic Recovery
  • Political Geography: Asia, Southeast Asia
  • Author: Tamat Sarmidi, Norlin Khalid, Sufian Jusoh, Muhamad Rias K.V. Zainuddin
  • Publication Date: 04-2021
  • Content Type: Research Paper
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: This study simulates the sector impacts of demand-side perturbations on air transport sectors due to the COVID-19 pandemic, focusing on ASEAN members plus Australia, China, Japan, the Republic of Korea, and New Zealand. This study involves (i) the generation of a multiregional input–output table from the latest Global Trade Analysis Project data, (ii) a network analysis to determine the importance of the air transport industry in each country, (iii) multiplier and linkages analyses, (iv) determinations of sector impacts from demand-side perturbations on air transport sectors due to the COVID-19 pandemic, and (v) simulation of the effect of fiscal and monetary measures to mitigate the pandemic’s impact. This study demonstrates that the aviation industry is a key sector in domestic and regional economic activities, and the reduction in air transport consumer demand due to the pandemic is estimated to cause gross domestic product (GDP) reductions from 0.4% to 2.1%. Government intervention, through fiscal and monetary policies, has, however, mitigated severe impact, moderating GDP and value-added losses. Thus, a viable policy prescription for the aviation industry is of utmost importance.
  • Topic: Globalization, International Trade and Finance, Pandemic, COVID-19, Travel
  • Political Geography: Asia, Southeast Asia
  • Author: Anirudh Shingal
  • Publication Date: 04-2021
  • Content Type: Research Paper
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: Given the importance of services for economic activity in general and the salience of reducing service link costs for overcoming the economic and health challenges emanating from COVID-19, we examine the implications of the pandemic for services trade in the original group of ASEAN+6 countries that began negotiating the Regional Comprehensive Economic Partnership agreement. Our analysis reveals that with the exception of the Philippines and Viet Nam for services exports, and Cambodia and India for services imports, up to half of total services trade for all other sample countries could be adversely affected by the pandemic. In the absence of bilateral services trade data for 2020, we proxy the impact of COVID-19 on services trade using bilateral data on announced greenfield investment in services sectors from fDi Markets. Structural gravity estimates suggest that a 1% increase in COVID-19-related deaths in the source country may have reduced ASEAN+6 bilateral greenfield investment by US$0.15 million in 2020 relative to the corresponding value in 2019.
  • Topic: Investment, Services, Pandemic, COVID-19
  • Political Geography: Asia, Southeast Asia