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31. Exploring the Interplay between Trade and Industrial Policies and the Impact of Geopolitics on the Transformation of Taiwan’s Economy

Author:
Ying-Jun Lin
Publication Date:
10-2023
Content Type:
Journal Article
Journal:
Revista UNISCI/UNISCI Journal
Institution:
Unidad de investigación sobre seguridad y cooperación (UNISCI)
Abstract:
Over the past five decades, Taiwan's economy has shifted from inward-oriented to outward-oriented, from an import-substitution policy to an export-expansion policy. This evolution in economic structure has also brought about changes in the industrial landscape. While there is an ongoing debate about the respective roles of the market and the government in promoting Taiwan's economic growth, this article argues that the history of Taiwan's economy demonstrates a mutually beneficial relationship between trade and industrial policies. The integration of market forces and government intervention has played a crucial role in Taiwan's economic success story. However, the dynamics between the United States and China, as well as the emergence of new Asian regionalism, pose challenges to Taiwanese industries and enterprises. In conclusion, this article emphasises the importance of refining trade and industrial policies in line with the geopolitical context in order to maintain the momentum of Taiwan's economy.
Topic:
Economics, Bilateral Relations, Trade, and Dependency
Political Geography:
China, Taiwan, Asia, and United States of America

32. Russia-China Defense Cooperation

Author:
Andrea Kendall-Taylor and Nicholas Lokker
Publication Date:
04-2023
Content Type:
Special Report
Institution:
Center for a New American Security (CNAS)
Abstract:
Russia’s war in Ukraine has been a critical test of the depth of Sino-Russian relations. Since Russia’s invasion, China has remained an essential partner for Moscow. Although there have been limits to what Beijing has been willing to do for Russia, China has served as a vital lifeline for the Kremlin including by parroting Russian talking points about the war, increasing purchases of Russian oil and gas, and continuing to export microchips and other component parts to Moscow cut off by the West. Warnings by senior U.S. officials that China is contemplating providing Russia with lethal military aid in support of its war against Ukraine underscore the depth of their partnership.1 Emerging reports that Chinese companies have provided rifles and dual-use equipment such as drone parts and body armor only add credibility to these warnings.2 Although it remains unclear at the time of writing whether China will ultimately decide to send lethal aid to Russia, the last year has provided further evidence that Russia and China are deeply aligned and that the persistence and evolution of their partnership will continue to pose challenges that the United States and its allies must navigate. This working paper will focus on the challenges that Russia-China military cooperation poses to the United States and its allies and partners. This aspect of their relationship has been one of the most consequential dimensions of their deepening partnership. Already, China has obtained key capabilities from Moscow such as Su-27 and Su-35 fighter aircrafts, S-300 and S-400 air defense systems, and anti-ship missiles, which bolster China’s military posture in the Indo-Pacific.3 Russia too has benefited from a large market for its arms sales and access to technological components it can no longer access following the imposition of Western sanctions in 2014—a need that has grown exponentially since Russia’s reinvasion of Ukraine in February 2022. Meanwhile, more frequent and elaborate joint exercises have signaled to onlooking countries the two partners’ mutual support for each other’s security priorities and willingness to push back against the United States. In the context of Russia’s ongoing war against Ukraine and increasing U.S.-China tensions in the Indo-Pacific, it has become even more urgent to understand how future military cooperation between Russia and China could evolve and what it would mean for the United States and its partners. This memo examines this aspect of the partnership, including what is driving it, how it has evolved following the 2022 invasion of Ukraine, and the implications for the United States and its allies and partners.
Topic:
Bilateral Relations, Military Affairs, Russia-Ukraine War, and Defense Cooperation
Political Geography:
Russia, China, and Asia

33. Strengthening the Shield: Japan’s Defense Transformation and the U.S.-Japan Alliance

Author:
Jacob Stokes, Lisa Curtis, Joshua Fitt, Joseph I. Grimm, and Rebecca Wittner
Publication Date:
09-2023
Content Type:
Special Report
Institution:
Center for a New American Security (CNAS)
Abstract:
In December 2022, Japan’s government released three major strategic documents: the National Security Strategy, the National Defense Strategy, and the Defense Buildup Program. Although Japan has made incremental changes to its security policies and capabilities over the last decade, the new documents mark a notable shift in Japan’s approach to strengthening its defense. The documents reflect Tokyo’s assessment of the rising threats that could challenge Japan’s security and signal Japan’s commitment to build the military capabilities necessary to meet them. This report examines Tokyo’s defense transformation and assesses its implications for the U.S.-Japan alliance and Washington’s strategy toward the Indo-Pacific. Japan is “fundamentally reinforcing” its national security and defense policies to cope with its increasingly severe security environment. The military threats posed by China, North Korea, and Russia have been growing steadily for years but appear to be peaking simultaneously. Tensions between Japan and China have occasionally flared in the five decades since they normalized diplomatic relations. But those tensions have reached new heights since 2012, when China began to regularly contest Japan’s administration of the Senkaku/Diaoyu Islands. By August 2022, Beijing fired five ballistic missiles into Japan’s exclusive economic zone during China’s live-fire military exercises after then-U.S. House Speaker Nancy Pelosi’s visit to Taiwan. The aim of the missile launches was to signal there would be consequences for Japan if Tokyo were to intervene in a Taiwan contingency. Meanwhile, North Korea’s unprecedented rate of missile testing since 2022 and Russia’s brutal war against Ukraine have deepened Japanese concerns about the potential for the use of force in the Indo-Pacific. Japan is taking steps to improve its ability to defend itself and deter an invasion, including through changes to security funding and policy. Tokyo has announced plans to increase its defense spending by 65 percent over the next five years, acquire standoff weapons that could be used for a counterstrike mission, and adopt an “active cyber defense” posture. Japan has clarified the roles of its military, the Self-Defense Forces (SDF), and Coast Guard in the event of an attack; committed to establishing a permanent Joint Headquarters for SDF operations; and created a program for supplying partner militaries with security assistance. Effectively employing counterstrike and active cyber defense, however, will require a clearer delineation of the legal authorities for their use as well as the overall military strategies that they would support. In addition, pressure from the Japanese public over tax hikes required to pay for the defense spending increase amid other fiscal pressures could pose a barrier to implementation. Japan plans to strengthen the SDF through boosting readiness and resilience of current forces, acquiring counterstrike and other advanced capabilities, and improving force posture and mobility. The SDF has been plagued by a chronic lack of munitions and other supplies, and most of its facilities do not meet its own standards for resilience against enemy attack. Addressing these shortfalls is essential, though these types of programs often lose out to more high-profile programs. For its counterstrike mission, Japan has announced it will buy U.S.-made Tomahawk cruise missiles. This initial purchase will provide a stopgap until Japan is able to produce its own longer-range missiles later in the decade. Japan has also announced it will pursue new capabilities in uncrewed systems, space, cyber, and artificial intelligence (AI). But fulfilling these ambitions will be challenging given some short-falls in Japan’s technology base and SDF personnel. Lastly, the SDF is grappling with how to expand its forces in Japan’s southwest islands while maintaining a sufficient presence throughout the country to deter aggression from a range of possible threats. Next, Japan’s strategy emphasizes enhancing security partnerships regionally and across the globe. Japan has recently stepped up its defense cooperation with several Indo-Pacific and European countries. With Australia, Japan is building on a 10-year effort to deepen strategic cooperation, a process that culminated in January 2022 with the completion of a Reciprocal Access Agreement. New bilateral strategic cooperation includes enhancing interoperability between the SDF and the Australian military, increasing rotational SDF training deployments to Australia, and announcing a new joint security declaration that commits to a combined response to military contingencies. Similarly, Japan has long recognized the strategic importance of India and continues to build on the Japan-India relationship through maritime security cooperation, a new joint fighter exercise, and operationalization of their Acquisition and Cross-Servicing Agreement. Japan and the Philippines are also expanding their defense ties through humanitarian assistance and disaster relief training exercises and an important emerging trilateral security relationship with the United States. Over the past year, Japan and South Korea have made significant strides to repair relations since the latest downturn that began in 2018. This will be an incremental process, but there has been progress in the form of leader-level summits and ministerial dialogues, plans to cooperate on sharing data about North Korean missiles, and new trilateral ballistic missile and anti-submarine drills with the United States. Japan also is building defense connections and relationships with European nations. It is pursuing the development of a sixth-generation fighter jet with the U.K. and Italy and, particularly since the full-scale Russian invasion of Ukraine, has sought to deepen strategic ties with NATO. These comprehensive changes to Japan’s defense policies will necessarily reshape the military and security pillars of the U.S.-Japan alliance. Tokyo’s acquisition of counterstrike capabilities will position Japan to potentially take on some offensive tasks, even while retaining its primarily defensive orientation. This also has implications for alliance contingency planning related to defending Japan directly as well as around Taiwan, the Korean Peninsula, and the South China Sea. However, increased joint planning will require updates to alliance command and control (C2) and information-sharing mechanisms. Additionally, given resource constraints, the alliance would be well-served to find additional opportunities for military technology sharing, codevelopment, and coproduction, such as through Japanese involvement in the second pillar of the AUKUS (Australia-United Kingdom-United States) partnership focused on cooperation on advanced capabilities and defense technology innovation. And the alliance must take steps to improve force posture and readiness, including through enhancing base resiliency and increasing munitions stockpiles. Japan’s fundamental transformation of its defense posture will mean significant changes for the U.S.-Japan alliance. The United States must adapt its approach to alliance coordination to maximize new opportunities and manage any new challenges. In this context, U.S. policymakers should: Prepare to update the alliance, while recognizing that Japan’s new defense policies will require significant time, resources, and political will to implement. Stay closely aligned with Tokyo on the threat land- scape as well as engagement with geopolitical competitors, especially China. Integrate U.S.-Japan command and control structures. Create an alliance readiness, resilience, and posture implementation task force. Deepen planning for contingencies and bolster extended deterrence. Create a road map for expanding defense technology cooperation concurrently with Japan’s implementation of specific improvements to its information security practices and infrastructure. Innovate operational concepts for uncrewed systems and counterstrike capabilities. Leverage the U.S.-Japan alliance as a hub for minilateral and multilateral security engagement. Build U.S.-Japan alliance mechanisms that will expand cooperation on cyber security and defense. Stand up an alliance dialogue on military personnel issues.
Topic:
Defense Policy, National Security, Bilateral Relations, and Alliance
Political Geography:
Japan, Asia, and United States of America

34. The Effects of the United States-China Trade War During the COVID-19 Pandemic on Global Supply Chains: Evidence from Viet Nam

Author:
Duc Anh Dang and Ngoc Anh Tran
Publication Date:
08-2023
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The trade war between the United States (US) and China has affected their bilateral trade as well as that with other countries. This study investigates how Vietnamese firms performed during the COVID-19 pandemic under the shadow of this trade war. The change in the log of Vietnamese exports to the US from 2017 to 2020 is used to measure the impact of the trade war, and the change in the log of Chinese exports to the US is then used as an instrument for the Vietnamese export change during the same period. It is found that firms that faced more trade war exposure increased their investment, profit, and value added, which may be due to the market exit of unproductive firms. Moreover, the trade war impact is more pronounced for large firms. Foreign-invested firms gained less from trade war exposure. The pandemic weakened the trade war effect on firm performances; however, it exacerbated the trade tension effect on foreign-trade firms.
Topic:
Bilateral Relations, Investment, Trade, and COVID-19
Political Geography:
China, Asia, North America, and United States of America

35. China’s Provinces as Global Actors: Evidence from China-Africa Relations

Author:
Charlotte Lenz
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
LSE IDEAS
Abstract:
With the launch in the early 2000s of China’s ‘Going Global’ Strategy, Chinese provinces became one group of actors participating in China’s South-South relations. In this Strategic Update, Charlotte Lenz investigates the role of Chinese provinces as foreign policy actors and explains their internationalisation strategies, challenging the prevalent perception of China as a unitary actor on the world stage. Drawing on evidence from Africa-China relations, the report identifies two strategies employed by Chinese provinces in pursuit of their foreign policy interests: (1) Formal and informal “twinning” as a collaborative model between central and local actors, wherein central actors design policies and provincial governments execute projects; (2) and “clustering” according to a sectoral logic of investment and diplomacy in which a certain Chinese province engages a certain foreign country. Despite ongoing bureaucratic centralisation under Xi Jinping, provinces continue to pursue their own internationalisation strategies to help meet local economic and employment targets. Understanding their agency, interests and limitations is thus key to deriving a better understanding of China’s evolving global presence.
Topic:
Foreign Policy, Diplomacy, Bilateral Relations, Investment, and Internationalization
Political Geography:
Africa, China, and Asia

36. The Sino-French Relationship At 60: China’s Losing Bet On A Reset

Author:
Juliana Bouchard
Publication Date:
12-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Against a background of increasingly fraught relations with the European Commission, China has been doubling down on its outreach to member states, with France chief among them. The two countries have been gearing up to the 60th anniversary of their bilateral relationship in January 2024 with a flurry of diplomatic exchanges. These have included high-level visits by President Emmanuel Macron in April, Economic Minister Bruno Le Maire in July, diplomatic adviser Emmanuel Bonne in late October, and most recently Foreign Affairs Minister Catherine Colonna (FMPRC, November 22). On the Chinese side, Premier Li Qiang traveled to Paris in June to take part in the Summit for a New Global Financing Pact. However, this year also saw Paris deal some blows to China’s economic ambitions, with Macron being one of the driving forces behind Brussels’ ongoing anti-subsidy investigation into China-made electric vehicles and revamping its own EV purchase credits to exclude Chinese-made models (Service Public, October 10). During Bonne’s visit, Wang Yi framed his expectations for the anniversary in no uncertain terms, calling on China and France to “revisit the original intention (重温建交初衷)” of their bilateral ties and “consolidate and reset (巩固和再出发) the relationship” (FMPRC, October 30). Paris’ appetite for meeting Beijing halfway in “resetting” the relationship is far less certain. Most likely, China’s lofty ambitions for a reset will be met with more ambiguity from France, continuing its diplomatic outreach to safeguard economic opportunities in China, all the while pushing for more assertive policies within Brussels to achieve its vision of “strategic autonomy.” While some scholars are not entirely immune to the “dual-faced (两面性)” nature of French diplomacy (Fudan Development Institute, March 2), a prevalent view—or hope—among officials in Beijing is that Macron’s vision of strategic autonomy is primarily about asserting an independent foreign policy from the United States. However, in reality, strategic autonomy also informs France’s own de-risking agenda toward China.
Topic:
Foreign Policy, History, and Bilateral Relations
Political Geography:
China, Asia, and France

37. China and Nicaragua’s Deepening Embrace

Author:
Scott B. MacDonald
Publication Date:
11-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
In October 2023, Nicaragua signed an agreement with China’s CAMC Engineering Company (中工国际工程) for the reconstruction, expansion, and upgrading of the Punta Huete International Airport (Yicai, October 18). The company is a subsidiary of the conglomerate China National Machinery Industry Corporation (国际集团), also known as Sinomach (Sinomach, accessed November 15). Local and Chinese officials are touting the $492 million project as part of China’s Bridge and Road Initiative (BRI), reflecting a deepening of Daniel Ortega’s regime’s ties to the People’s Republic of China (PRC) (Global Times, October 18). Closer links between Beijing and Managua demonstrate that China’s economic statecraft remains central to its strategy to further penetrate Latin America and the Caribbean, a region of significant geopolitical importance to the United States. The sustainability of China’s economic statecraft, and BRI in particular, have come into question in recent months due to the country’s domestic economic problems. However, the Nicaraguan airport announcement signals that the PRC remains economically active in the region, and its ambitions have not wavered. This is something of which the remaining handful of countries that officially recognize Taiwan are well aware: Beijing’s attention to regional infrastructure continues, if more selectively than before, but only to those countries who have decided to forgo relations with Taiwan. Beijing is further extending its reach into the strategic underbelly of the United States. For Nicaragua, the restoration of diplomatic ties with China serves the geopolitical needs of President Daniel Ortega in distancing his regime from the United States and softening the blow of sanctions (imposed due to fraudulent elections and gross human rights violations), while providing a source of non-Western funds to finance infrastructure projects.
Topic:
Foreign Policy, Bilateral Relations, Infrastructure, and Economy
Political Geography:
China, Asia, Central America, and Nicaragua

38. Money Alone Is Not Enough: The Future Of The China-Argentina Relationship

Author:
Román D. Ortiz
Publication Date:
11-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Observers assessed the outcome of the first round of Argentina’s presidential elections held on October 22 as good news for the Chinese government (VOA, October 26). Against the odds, Sergio Massa, the Peronist candidate and current minister of economy, emerged on top, despite his overseeing an annual inflation rate of almost 140 percent. Meanwhile, Javier Milei, the libertarian opposition candidate, took the second place (Yahoo Noticias, October 23). These two politicians will compete for the presidency in the second round of the election scheduled for November 19. At first glance, the victory of Massa should be an encouraging sign for the People’s Republic of China (PRC) since it keeps open the possibility that the China-friendly Peronist party remains in government. However, a more granular analysis suggests two alternative outcomes: First, Milei is likely to be the eventual winner after the second round of voting, which would make the new occupant of the Casa Rosada (the Argentinian presidential palace) a politician who has called the PRC an “assassin” and who plans to freeze relations with Beijing. Second, if Massa wins the presidency, his more moderate Peronism is far from the Third-World foreign policy promoted by the outgoing president, Alberto Fernandez, and his vice-president and former president, Cristina Fernandez. Thus, regardless of the outcome of the presidential election, Beijing’s desires to increase political influence over Buenos Aires, which have focused particularly on its defense policy, are likely to be curtailed. A decrease in political influence with Buenos Aires would deal a serious blow to the Chinese strategy in Latin America, in which Argentina plays a critical role. Argentina is the only large country in the region to join the Belt and Road Initiative (BRI). It also exports food, minerals, and oil needed by the Chinese industrial sector. Argentina’s expansive territory represents a natural platform to project power within South America and to the South Atlantic. Buenos Aires’s geopolitics makes it particularly attractive for Beijing, which is exploring opportunities to secure rights for a naval base on the west coast of Africa in order to gain access to the Atlantic. Argentina also forms a key part of PRC efforts to consolidate its hegemony over the Global South. Specifically, the PRC views Argentina as a counterbalance to Brazilian regional hegemony, which motivated China’s interest in Argentina joining the BRICS grouping of countries, against Brazilian opposition.
Topic:
Foreign Policy, Bilateral Relations, Belt and Road Initiative (BRI), and Industry
Political Geography:
China, Asia, Argentina, and South America

39. The PRC Eyes Vietnam: Chinese Assessments of Vietnam’s Hedging Strategy

Author:
Nathan Waechter
Publication Date:
07-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
In July, the Barbie movie––an ostensibly apolitical and innocuous film––­­was banned by the Vietnamese Department of Cinema over real-world tensions between Vietnam and China. According to the state film council, the new Barbie movie was barred from the Vietnamese market over its inclusion of a map purportedly showing China’s preferred territorial “Nine-Dash” line in the South China Sea (Vietnam News, July 7). As the head of the national film evaluation council stated, “Vietnam’s stance has been clear. It does not accept movies that are ambiguous in matters related to territorial sovereignty” (Vietnam News, July 7). The Chinese Foreign Ministry spokesperson Mao Ning responded to the incident by asserting that “China’s territorial sovereignty and maritime rights and interests are solidly grounded in history and law” (Global Times, July 7). Accusing the Vietnamese government of overstating the issue, the Chinese state media outlet Global Times urged all “relevant parties to control domestic hype and nationalist sentiment” (Global Times, July 7). Viewed within a broader context, the Barbie movie incident is only the most recent expression of the historical baggage between Vietnam and China. Many PRC military officials and academics largely perceive Southeast Asia as China’s proverbial “backyard” that should rightfully remain in its sphere of influence. Within Southeast Asia, Vietnam occupies an important position directly on China’s periphery. Publicly, China considers Vietnam’s governing regime to be close “comrades and brothers” (Ministry of Foreign Affairs, March 28). However, Vietnam has a long, acrimonious history with China. Vietnam has been invaded by China numerous times and subjugated to Chinese rule and the exaction of tribute for thousands of years. The “Vietnam Military Museum in Hanoi … lists 13 “Vietnamese Resistance Wars Against Invaders,” with the majority fought against the Chinese. To some extent, Vietnam has also benefited from its contact with China. The Chinese written script, ideas of ethics and governance, and even chopsticks were absorbed from China. [1] During America’s war in Vietnam, China provided Vietnam with vast amounts of material support. From 1965-1969, a total of 320,000 Chinese troops covertly served in North Vietnam. [2] Despite this, China invaded Vietnam in 1979 in a war that the PRC refers to as the “Self-defensive counterattack against Vietnam” (对越自卫还击保卫边疆作战) (Baidu Encyclopedia). In more recent years, Vietnam and China have clashed rhetorically over islands in the South China Sea and had a tense standoff over a Chinese oil exploration rig in Vietnamese-claimed waters in 2014 (CSIS, December 23, 2014). With its historical domination by China and its position as a small, weak, and still developing country, Vietnam has pursued a strategy of hedging. Research by Thi Bich Tran and Yoichiro Sato, Le Hong Hiep, and Tuan Uy Tran provide robust definitions of Vietnam’s hedging strategy from Vietnamese and Western perspectives (Contemporary Southeast Asia, December 2013; Asian Politics and Policy, January 2018; Naval Post-Graduate School Monterey, March 1, 2018). However, it is important to understand how China views Vietnam’s strategy as well. Further analysis is needed to examine primary Chinese sources and understand Chinese elite perceptions, their conclusions, and what “countermeasures” they believe China should take against Vietnam’s approach. On balance, while Chinese security analysts have a clear understanding of Vietnam’s hedging strategy, they exhibit a modern version of historical Chinese paternalism towards Vietnam. Many contemporary Chinese analysts believe that Vietnam, as a developing country, will inevitably fall into China’s sphere of influence as it remains dependent on Chinese economic ties for growth. While Vietnam does benefit from its economic relations with China, however, the Chinese analyses fail to fully recognize Hanoi’s fundamental apprehensions and insecurity caused by the historical enmity between the two countries, as well as China’s modern-day rise and its aggressive actions in the South China Sea. To a certain degree, China is guilty of exhibiting a degree of the same imperial hubris towards Vietnam as it has often accused the US of in the latter’s relations with other countries. While PRC strategists appear to have concluded that time is on their side, Beijing’s paternalistic complex may ultimately handicap China’s ability to pull Vietnam closer into its orbit.
Topic:
Foreign Policy, Bilateral Relations, Hedging, and Regional Politics
Political Geography:
China, Asia, and Vietnam

40. U.S.-China Data War Intensifies as Bilateral Relations Nosedive

Author:
Willy Wo-Lap Lam
Publication Date:
04-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
U.S.-China relations appear headed for further deterioration despite the People’s Republic of China’s (PRC) efforts to lure back American multinationals and Beijing’s relatively limited support for Russia in its war with Ukraine. Washington has characterized the “existential competition” with the Chinese Communist Party (CCP) as an entrenched struggle on all fronts, but the data and information sectors have recently become areas of particularly intense contention. The Xi Jinping leadership has sternly retaliated against purported efforts by the U.S. and its allies to choke off the PRC’s high-tech development pathways. Recent moves targeting American and other foreign firms are also closely linked to General Secretary Xi Jinping’s obsession with cybersecurity and control of data. Last weekend, the Cyberspace Administration of China (CAC), the administrative arm of the policy-setting Central Cyberspace Affairs Commission (CCAC) that Xi chairs, announced an investigation into the operations of leading American memory-chip maker Micron Technology. The CAC cited the need to safeguard the supply chains of Chinese IT and data companies. Regardless, Micron, whose China operations account for 11 percent of worldwide sales, has insisted that it “stands by the security of our products” (Straits Times, April 1; South China Morning Post [SCMP], March 31).
Topic:
Bilateral Relations, Cybersecurity, Information Technology, and Data Governance
Political Geography:
China, Asia, North America, and United States of America