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1. China and the new globalization

Author:
Franklin D. Kramer
Publication Date:
01-2023
Content Type:
Special Report
Institution:
Atlantic Council
Abstract:
The unitary globalized economy no longer exists. Driven in significant part by security considerations, a new and more diverse globalization is both required and being built. The transition is ongoing, and its final form is yet to be determined. Many of the causal factors for this very significant change revolve around China and the consequent responses to its actions by the United States, other democracies of the transatlantic alliance, and the advanced democratic economies of the Indo-Pacific. There are other important factors generating this new globalization including the impact of the Russia-Ukraine war both on energy markets and on trade and investment with Russia generally, as well as the global requirements for mitigating and adapting to climate change. However, China has been a critical element in what might be described as the “maximum trade-centered globalization,” which has dominated trade and investment policy in the three decades since the end of the Cold War. This issue brief describes the still-developing new globalization focusing on the issues surrounding China. A fundamental challenge that China presents arises because its actions have generated significant security and economic challenges, yet it nonetheless is a massive trade and investment partner for the “advanced democratic economies” (ADEs),1 which for purposes of this analysis include the Group of Seven (G7) countries,2 plus Australia, Norway, the Republic of Korea, and the European Union. Adapting to a new globalization requires establishing a strategic approach that resolves the inherent contradictions between those conflicting considerations.
Topic:
Security, Defense Policy, Diplomacy, Environment, Politics, Science and Technology, Economy, Business, and Energy
Political Geography:
China, Europe, Eurasia, Canada, Asia, United States of America, and Indo-Pacific

2. General Equilibrium Analysis of Cost-Effectiveness and Distributional Impacts of China’s Nationwide CO2 Emissions Trading System

Author:
Xianling Long, Da Zhang, Lawrence Goulder, and Chenfei Qu
Publication Date:
03-2023
Content Type:
Special Report
Institution:
Asia Society
Abstract:
China introduced the world's largest emissions trading system in 2021 which is intended to help cost-effectively achieve its pledges of reaching a peak in CO2 emissions before 2030 and carbon neutrality before 2060. The system is a tradable performance standard (TPS) with a bottom-up intensity-based emissions cap, unlike a top-down absolute cap approach commonly used globally. General Equilibrium Analysis of Cost-Effectiveness and Distributional Impacts of China’s Nationwide CO2 Emissions Trading System developed and applied a multi-sector, multi-period general equilibrium model to assess the emissions, energy mix, and economic impacts of a series of options for the future development of this policy. These included cap-setting, benchmark design, auction design, and sectoral expansion, with valuable insights provided on the potential future evolution of this policy.
Topic:
Climate Change, Economy, Trade, and Carbon Emissions
Political Geography:
China and Asia

3. Chinese foreign policy in 2023: Stepping back from the brink

Author:
Thomas Eder
Publication Date:
01-2023
Content Type:
Special Report
Institution:
Austrian Institute for International Affairs (OIIP)
Abstract:
When it comes to Chinese foreign policy in 2023, decision-makers in Austria and Europe have to most importantly consider three partly interrelated and highly topical questions that are and should be preoccupying China researchers. Will China escalate its support for Russia during the war in Ukraine? Will China invade Taiwan? How will China’s protest movement and exit from Zero-COVID impact foreign policy? Further trends in China research will address the need to employ digital methods due to a lack of access for fieldwork (COVID or political restrictions) (BCCN 2022), the importance of protests more broadly (labour issues or Hong Kong democracy) (Wei and Chan 2022; Cheng et al 2022), and the fragility of a centralized system around Xi Jinping with no succession plan as Xi enters his third term as president in March 2023 (Tsang and Cheung 2021). Following Russia’s full invasion of Ukraine, Beijing has supported Moscow in the informational and diplomatic domain, but has remained self-interested in the economic domain, and has not shifted from previous policies in the military domain (Chestnut Greitens 2022, 751). China needs Russia as a partner in mounting a (normative) challenge to US power and the liberal international order (Johnston 2022, 1307), gaining influence in multilateral institutions (Wang and Sampson 2022, 374), and preserving the Communist Party regime (Pavel, Kirchberger and Sinjen 2022, 295). The Chinese leadership would like to see a Russian victory, and dreads a defeatinduced regime collapse in Moscow (Lo 2022). Beijing has condemned the West for provoking the war and for imposing sanctions. In the UN, China abstained or voted for Russia. At the same time, since the beginning of the war, bilateral trade has grown significantly. Yet, Chinese companies and banks have partly withdrawn or broken off ties with Russian counterparts to steer clear of secondary sanctions. Moreover, while joint military exercises continue, there is no clear evidence for arms or equipment deliveries.
Topic:
Foreign Policy, Geopolitics, Economy, and COVID-19
Political Geography:
China and Asia

4. Software Power The Economic and Geopolitical Implications of Open Source Software

Author:
Alice Pannier
Publication Date:
12-2022
Content Type:
Special Report
Institution:
Institut français des relations internationales (IFRI)
Abstract:
Open source plays a central role in software development, both in parallel with proprietary software and increasingly intertwined with it. It has become a major factor for companies’ innovation processes and for the success and popularity of their products. For users, using open source software can alleviate risks stemming from proprietary solutions, including data privacy concerns or trade restrictions. Beyond that, open source is the foundation of critical software bricks and Internet languages and protocols. However, open source is a victim of its own success. It suffers of a lack of resources dedicated to the maintenance of open source components, even though vulnerabilities in open source code can have serious consequences, as illustrated by the Log4Shell vulnerability in December 2021. For these reasons, private companies are investing ever more money and human resources in the development and maintenance of open source software, and acquiring structuring roles in the governance of the ecosystem. This support, however, is not without risk for the open source ecosystem, which is increasingly shaped by the private interests of Big Tech companies. Meanwhile, governments are getting increasingly concerned with the cybersecurity implications of open source software, and with risks not only of accidental vulnerabilities, but also manipulation of codes by criminals and foreign agents. The interest of governments in open source is not new, but it is evolving: governments are no longer only seeking to adopt open source or to develop software solutions, but also to contribute to the financing or even the governance of open source ecosystems, at the national and/or global level. An analysis of the United States, Chinese and European cases show that government involvement in open source is not only pragmatic; it is increasingly politicized, and serves to uphold governments’ ambitions for national security, international influence, or digital sovereignty. The study highlights the dilemmas that emerge, for public authorities, from the tensions between the desire to secure universally used, critical open source components, the desire to develop “sovereign” technologies, and the risk of encroaching on the horizontal and decentralized functioning of open source.
Topic:
European Union, Cybersecurity, Geopolitics, Economy, Software, and Open Source
Political Geography:
China, Europe, and United States of America

5. Five Years after China’s Plastic Import Ban Have Europeans Taken Responsibility?

Author:
Eugénie Joltreau
Publication Date:
07-2022
Content Type:
Special Report
Institution:
Institut français des relations internationales (IFRI)
Abstract:
After the 2017 Chinese waste import ban, the international and European Union (EU) legislative framework on waste exports has been revised. • The amendment to the Basel Convention is stricter on the possibility to export plastic waste outside the EU, which has integrated the amendment in the waste shipment regulation (WSR) and is considering further export restrictions. Moreover, a Directive to reduce the use of single-use plastics and stimulate local demand for recycled plastics has been adopted. • The recycling rate of plastic packaging has been deteriorating since 2016 in view of the growing quantities of plastic packaging waste and limited export outlets, despite an increase in the tonnage recycled. Exports of plastic waste from the European Union have been reduced and partly redirected, with some negative environmental impacts reported. The EU demand for certain recycled plastics has boomed, encouraged by the new regulation, yet overall, EU plastic packaging consumption keeps increasing. • The debate on the export ban opposes a view of responsibility for the treatment of waste with the promotion of international waste trade as a means to achieve a global circular economy (for plastics). However, there is no evidence that the waste trade enables to increase the global recycling rate, reduces the use of virgin plastic, and reinforces sustainability. • The European Commission (EC) has released a new legislative proposal that tightens up waste export possibilities but does not ban it.
Topic:
Climate Change, Economy, Recycling, Waste, Imports, and Plastic
Political Geography:
China and Europe

6. How Will China Respond to the Russia-Ukraine Crisis?

Author:
Chris Miller
Publication Date:
01-2022
Content Type:
Special Report
Institution:
Foreign Policy Research Institute
Abstract:
How will China respond to a potential Russian military escalation against Ukraine? Relations between Russia and China have intensified in recent years, with Vladimir Putin and Xi Jinping holding regular summits and the two countries’ militaries participating in joint exercises and cooperating in some defense industrial efforts. Ties between Moscow and Beijing are now closer than any time since the days of Stalin and Mao, driven by a shared perception that the United States is each country’s primary foreign policy challenge. One top Russian official told media in December 2021 that the relationship now “exceeds an alliance.”[1] Chinese state media, meanwhile, have vocally backed Russia in arguing that the current crisis stems from the US “using NATO as a tool to cannibalize and squeeze Russia’s strategic space.”[2] The 2014 war in Ukraine and annexation of Crimea was an important factor driving Russia and China closer to each other, as Russia sought to reduce post-Crimea international isolation and as Beijing realized it could drive a hard bargain in its bilateral relationship with Russia on issues like energy. China’s response to the 2014 war, however, was generally to avoid taking sides. China accepted a narrative that placed blame on the West for causing the crisis, with top diplomats citing Western “foreign interference for causing the crisis,” but didn’t approve of Russia’s seizure of Crimea or its military actions in the Donbas.[3] China abstained from voting on the key United Nations resolutions regarding Crimea, for example, and it still declines to recognize Crimea as Russian territory. Similarly, it verbally rejected US and European sanctions on Russia though it let Chinese firms, including the country’s big state-owned banks, abide by these sanctions to avoid being cut off from US financial markets and the international banking system. Compared to 2014, however, China may find it more difficult to avoid involvement in an escalating crisis. Leaders in Beijing and around the world will see the US response to any military escalation against Ukraine as sending signals about whether the US could effectively respond to future crises in the Taiwan Strait or East or South China Seas. The success or failure of US efforts to impose meaningful costs on Russia if it escalates will be seen as a test of whether the US could do something similar in Asia. Moreover, after repeated summits between Chinese President Xi Jinping and Russian President Vladimir Putin, including Xi’s description of Putin as his “best friend,” China’s approach to Russia amid a crisis will also be interpreted as sending signals about China’s own capabilities and influence. Because of this, China will not see a new phase of war between Russia and Ukraine as a peripheral issue in its foreign policy, even though China has no core issues at stake in Ukraine itself. China is most likely to be implicated in the crisis by potential Western sanctions on Russia, which in contrast to 2014 will impose substantially more pressure on Beijing to take sides. China’s decision either to adhere to new Western sanctions or to help Russia avoid them will shape escalation pathways and determine the magnitude of economic and political isolation that sanctions impose.
Topic:
Foreign Policy, Politics, Sanctions, Military Affairs, Economy, Crisis Management, and Escalation
Political Geography:
Russia, China, Europe, Eurasia, Ukraine, and Asia

7. 'Win Without Fighting': The Chinese Communist Party's Political and Institutional Warfare Against the West

Author:
John Lee and Lavina Lee
Publication Date:
05-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
When compared to Western forms of diplomatic conversation and strategic discussion, phrases emanating from Beijing and the Chinese Communist Party (CCP) can appear peculiar, platitudinous, and so ambiguous as to be devoid of practical content. China’s paramount leader Xi Jinping speaks frequently about a ‘community of shared future,’ a ‘common destiny for mankind’ as part of his ‘China dream,’ or of his country’s ‘rejuvenation.’ He promises to pursue and achieve a ‘new type of great-power relations’ with the United States that will ‘expand the converging interests of all and build a big global family of harmony and cooperation.’ Yielding to the temptation to dismiss these phrases as glib and meaningless or as empty promises to the world would be a serious mistake. Emerging as the victorious side after the world was reshaped in the aftermath of the Second World War, and, more recently, the formal end of the Cold War, the United States and its allies have generally enjoyed dominance in all forms of power. The challenge and threat of China is largely understood in the context of its increase in material power, which is relatively easy to understand and quantify. In contrast, far less attention is being paid to non-material power, which is, admittedly, more nebulous and difficult to assess. However, China’s focus has been on relentlessly building its ‘comprehensive national power’ (CNP), that is, the sum-total of its powers and strengths—economic, military affair, science and technology, education, and resource—and influence. Thus, CNP encompasses both material and non-material power, and China’s buildup of both of these forms of power best explains its strategic and diplomatic successes. Chinese ‘rejuvenation’ is also not just about building GDP or having the world’s largest naval fleet. Rather, the CCP’s vision of a ‘community of shared future for mankind’ is very much about displacing the dominance enjoyed by the US and other advanced democracies in shaping global discourse and conversations, norms and standards, and influence within and through institutions. The advanced democracies have taken these less obvious forms of power for granted, a complacency that Beijing has exploited. As the CCP recognizes, “In the final analysis, the rise of a great power is a cultural phenomenon. It (that power) must be accepted by the international community. Be accommodated by the international system, rely on the international system, and be recognised by international norms.” To be sure, there is a rich and growing literature on the CCP’s various information, influence, and institutional resources and activities, and this report does not seek to reproduce the excellent work already in the public domain. Rather, it begins from the uncomfortable but growing realization that the CCP believes it has long been at war with the US and its allies, even though kinetic force has been used in only a few instances. It looks at why this war is being waged, what the hallmarks of success for Beijing look like, and how the use of non-material strategies in the form of political and institutional warfare complements and augments China’s better known material approaches in the CCP’s determined attempts to win this ongoing war or struggle. The report seeks to emphasize that, in understanding the challenge and threat of China, political and institutional warfare should not be treated as optional or interesting adjuncts to traditional notions of warfare or that their effects are peripheral to core strategic and even military objectives. On the contrary, non-material approaches are essential to the Chinese strategy and have real-world outcomes that are often the same ones that the use of force or economic coercion is intended to achieve. Just as the CCP views comprehensive power as encompassing material and non-material elements, its notion of waging and winning a war may or may not include a military element. We need to do the same when countering, deterring, and, if necessary, defeating Chinese strategies and actions. Moreover, the CCP’s approach is not just about putting its views forward in overt or veiled ways in the hope that it will change our minds about various issues. Instead, Beijing’s strategy is much more proactive and profound than that. The CCP’s political and institutional approaches are about fundamentally changing and shaping even the way we begin to think about or analyze an issue or what we perceive to be its ‘first principles.’ It is designed to shape the way we talk (or do not talk) about an issue, the presumptive and analytical frameworks we employ to do so, and the discourse regarding it that is accepted and deemed acceptable. At first glance, such a deeply cognitive approach might seem fanciful and impossible to implement. However, this report offers two recent case studies of instances where the CCP enjoyed considerable success in melding the material and the cognitive—with tangible and real-world results. This report then offers a summary of the real-world strategic effects and their impacts on the tactical decision-making of countries and their elites that should concern those in charge of our political, economic, military, and diplomatic policies and activities. In conclusion, it suggests some general responses to the CCP’s strategy, approach, and actions in these contexts.
Topic:
Foreign Policy, Politics, Economy, Institutions, Strategic Competition, and Chinese Communist Party (CCP)
Political Geography:
China, Asia, North America, and United States of America

8. Reboot: Framework for a New American Industrial Policy

Author:
Martijn Rasser, Megan Lamberth, Hannah Kelley, and Ryan Johnson
Publication Date:
05-2022
Content Type:
Special Report
Institution:
Center for a New American Security (CNAS)
Abstract:
This paper presents an initial framework for a new American industrial policy, a blueprint for what is needed to ensure the United States has the vision, goals, plans, and resources for an era of sustained strategic competition. The concept, informed by an overarching national technology strategy and a supply chain resilience strategy, is the initial contribution in a larger effort to provide policymakers with a comprehensive toolkit to navigate competition with China and engage with countries around the world, friend and foe alike.4 To provide tangible real-world examples of a new sensible American industrial policy and to illustrate how policies would vary by sector and over time, subsequent reports will detail what a new American industrial policy would look like in action for three key sectors: biotechnology, semiconductors, and green technologies.
Topic:
Economy, Green Technology, Strategic Competition, Industry, Biotechnology, and Semiconductors
Political Geography:
China, North America, and United States of America

9. Shifting Supply Chains from China into India as an Effective Grand Strategy in the Indo-Pacific Region

Author:
Akhil Ramesh
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Pacific Forum
Abstract:
Between 2016 and 2020, nations of the Quadrilateral Security Dialogue (Quad) became patently aware of the risks posed by an authoritarian state such as China controlling much of global value chains. This realization among leaders of the Quad nations can be attributed to a general rise in populism around the globe—which ignited a debate on globalization—to the COVID-19 pandemic, China’s acts of economic coercion against Australia and aggression against India in the Galwan Valley. To prevent China from weaponizing interdependence, nations of the grouping have launched several supply chain diversification and economic security initiatives such as the Supply Chain Resilience Initiative (SCRI) and Economic Prosperity Network (EPN). While these initiatives are a step in the right direction, a larger reformatory initiative is needed to prevent diversification projects from becoming a flash in the pan. Shifting supply chains out of China and into India has the potential to be that much needed reformative initiative. This exploratory study of the challenges and opportunities associated with shifting supply chains into India tests this hypothesis by examining the domestic political economy in India and the complexities of the US-India relationship. This study observes major impediments to a supply chain diversification project. One, trade protectionism is a common feature among Indian administrations. India’s diverse political landscape has warranted coalition governments, which has prevented administrations from taking reformative action on liberalizing the economy. Two, the US-India relationship historically had ups and downs. The two democracies even came to the brink of war in 1971, and 20 years later, the US unleashed economic sanctions on India for their nuclear tests. A concerted recalibration of the US-India relationship is required to solidify any form of economic partnership, short of an alliance. To summarize, the Indian government should continue liberalizing its economy through the land, labor, and corporate governance reforms. The US should adopt a more conciliatory approach to India’s domestic issues to avoid fissures in the relationship. Subsequently, the US, Australia, and Japan will be able to capitalize on the opportunities the Indian economy and the Indo-Pacific economy at large present for supply chain diversification. These opportunities can be capitalized through creating a trade bloc exclusive for the Quad and establishing a wealth fund to fund investments in the wider region.
Topic:
Security, Economy, Grand Strategy, and Supply Chains
Political Geography:
China, India, Asia, and Indo-Pacific

10. Resilient Industry Ecochains for the US-Taiwan Partnership

Author:
Stephen Su
Publication Date:
07-2022
Content Type:
Special Report
Institution:
East-West Center
Abstract:
Stephen Su, Senior Vice President and General Director of the Industrial Technology Research Institute (ITRI) of Taiwan, explains that the "United States and Taiwan can work closely together to develop resilient industry ecochains for key industries such as semiconductors, telecommunications, automotive, biotech, machinery, etc."
Topic:
Partnerships, Economy, Industry, Resilience, COVID-19, and Supply Chains
Political Geography:
China, Taiwan, Asia, North America, and United States of America