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11. Decoding China’s Technology and Industrial Policy: Seven Terms You Need to Know

Author:
Barry Naughton, Siwen Xiao, and Yaosheng Xu
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:
China’s technology and industrial policy programs have grown in scope and intensity since 2020, but the vocabulary used to describe them is vague and often misleading. This policy brief decodes seven essential terms and shows that they have concrete and complementary meanings. When understood in concert, they reveal the establishment of a large-scale, government-directed program of mission-oriented research, development, and application. Together these terms outline a substantial expansion of the Chinese government’s direct role in organizing economic activity, and hint at some of the limits of that expansion.
Topic:
Economics, Industrial Policy, Science and Technology, Research and Development, and Terminology
Political Geography:
China and Asia

12. Beijing Moderates Criticisms Selectively

Author:
Robert G. Sutter and Chin-Hao Huang
Publication Date:
01-2024
Content Type:
Journal Article
Journal:
Comparative Connections
Institution:
Pacific Forum
Abstract:
Beijing in this reporting period moderated often shrill rhetoric of the past two years criticizing Joseph Biden administration advances and regional governments cooperating with the US. Emphasizing China’s positive contributions to regional economic growth, Beijing stressed its flexibility, said to be different from Washington in not pressing regional states to choose between the US and China, even as it demonstrated ambitions to develop a new regional and global order favorable to itself. Nevertheless, glaring exceptions included egregious pressures to compel deference to China’s claims in the South China Sea, harsh criticism of the Philippines and Japan cooperating closely with the United States, as well as authoritative foreign policy statements giving regional governments little choice between two paths forward: cooperation with an avowedly beneficial China or America’s purported exploitative, divisive and destructive initiatives. Regarding the Philippines, an unprecedented show of support by the US for the territorial claims of its treaty ally resulted in an equally unprecedented pushback from Beijing.
Topic:
Foreign Policy, Economics, Rivalry, and Regional Politics
Political Geography:
China, Asia, and Southeast Asia

13. Between State Capitalism and Economic State Craft: China INC.

Author:
Sadia Rahman
Publication Date:
08-2024
Content Type:
Journal Article
Journal:
Uluslararasi Iliskiler
Institution:
International Relations Council of Turkey (UİK-IRCT)
Abstract:
China’s economy underwent regulatory, structural as well as spatial makeovers since the increase of opening up and reforms in 1978. Intermittent policy interventions have been implemented by the Chinese state to ensure that the economy plays a vital role. Relatedly, the Communist leadership’s economic perspective was shaped by two key attributes: ideology and functionality (pp. 8, 11, 42, 119, 148, 313, 314). From an ideological perspective, the legacy of reforms was as crucial as the equitable principle of Communist rule in China, as both ensured the party’s survival and its control over the state. From a functional perspective, the state’s performance remained an essential indicator for China to achieve economic growth and improve the living conditions of its people. In his book, Between State Capitalism and Economic State Craft: China INC, China expert Aravind Yelery captures the systemic reflections of these transitions, mapping how the state fused growth and encouraged further opening to help China manifest its rise. The book delves into China’s growth models examining how these contradictions are ‘chosen ones’ and how China aims to rally its economic statecraft globally. The central crux is the Communist Party of China’s (CPC) authority retention over the economy by preventing the state from giving up control over important sectors and industries. State-Owned Enterprises (SOEs) played a vital part in achieving this goal in China’s economy, allowing the CPC to control governance. Thus, the chapters are significantly interconnected enlightening on the ascendancy of capitalist approaches in the CPC, exploring how China managed to defy the decline experienced by previous communist regimes. The explanation of SOEs is presented as a key factor in establishing effective domestic economic controls, ultimately enabling China to exert its dominance in global economic affairs.
Topic:
Economics, Regulation, and State Capitalism
Political Geography:
China and Asia

14. The US Should Enhance Economic Engagement with Taiwan

Author:
Min-Hua Chiang
Publication Date:
07-2024
Content Type:
Special Report
Institution:
East-West Center
Abstract:
Dr. Min-Hua Chiang, East-West Center Adjunct Fellow and a Non-Resident Senior Fellow at the University of Nottingham’s Taiwan Research Hub, explains "Further strengthening Taiwan’s economy will make it more capable of bearing the financial burden of defending the island against a Chinese invasion…," and this imperative is compounded as Taiwan is “a critical player in America’s competition with China in the global semiconductor industry.”
Topic:
International Relations, Economics, Science and Technology, Leadership, Regional Economy, and Economic Engagement
Political Geography:
China, Taiwan, Asia, and United States of America

15. South Korean Perspectives on China-Russia Collaboration in the Arctic

Author:
Young Kil Park
Publication Date:
08-2024
Content Type:
Special Report
Institution:
East-West Center
Abstract:
Dr. Young Kil Park, Research Fellow at Korea Maritime Institute, explains that "While the immediate impact of China-Russia collaboration in the Arctic on South Korea is limited, it remains wary of the long-term implications for its economic and security interests."
Topic:
Security, Economics, Politics, Bilateral Relations, and Collaboration
Political Geography:
Russia, China, Asia, South Korea, North Korea, and Arctic

16. Rise of Economic Nationalism in Emerging Economies and the Influence of Elections

Author:
Michio Ueda
Publication Date:
08-2024
Content Type:
Special Report
Institution:
East-West Center
Abstract:
Mr. Michio Ueda, President of Geopolitics & Strategy and Visiting Lecturer University of Tokyo, examines "the intersection between economic nationalism and recent elections in Indonesia and India" and finds that "industrial policy is not a significant point of political contention" and elections "serve as an opportunity to gain legitimacy for policies supporting economic nationalism."
Topic:
Economics, Industrial Policy, Nationalism, and Elections
Political Geography:
China, Indonesia, India, Asia, and United States of America

17. Russia and China in Central Asia: Potential For Direct Competition

Author:
Maximilian Hess
Publication Date:
04-2024
Content Type:
Special Report
Institution:
Foreign Policy Research Institute (FPRI)
Abstract:
China is now undisputedly the leading economic partner for the Central Asia region, with trade and investment continuing to increase despite Beijing’s economic slowdown. Russia is still the dominant political partner for the region, but its influence and ability to strong-arm Central Asian states has been significantly dented by the impact of Vladimir Putin’s full-scale invasion of Ukraine. Central Asian states are now able in tacitly criticize Putin’s actions without significant cost and some have taken advantage of the negative impacts of Russia’s international isolation and sanctions to strike beneficial deals, in particular Uzbekistan and Kazakhstan. Moscow remains content in its position, knowing that the lack of democracy in the region and dominance of elite networks in business and politics mean that regional states are still willing to turn to Moscow for political support, as witnessed in the Kyrgyz Republic in particular since President Japarov came to power in 2020. Tensions between Beijing and Russia have failed to emerge, at least publicly, although if the current trends continue the potential for direct competition may increase.
Topic:
Foreign Policy, Economics, Strategic Competition, and Regional Power
Political Geography:
Russia, China, Central Asia, and Asia

18. The Global Impact of China’s Water and Related Environmental Problems

Author:
Thomas J. Duesterberg
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
The quantity, location, and quality of water resources in China have long been a distinguishing and even defining characteristic of its history. Records at least as far back as the Ch’in era in the third century BC note the presence of massive waterworks such as irrigation and transportation canals. Terraced rice fields in hilly areas in central and southern China remain iconic images of Chinese civilization. During a contentious and important debate in the mid-twentieth century, geographers and political scientists asked whether the erection of a “hydraulic society” was the explanation for what political scientist Karl Wittfogel identified as “oriental despotism.”1 The German-trained academic argued that the existential requirement to contain endemic flooding and move water from the massive rivers of central and southern China to agricultural areas necessitated an authoritarian system for deploying labor on the scale required for hydraulic engineering projects spanning the continent. Chairman Mao Zedong drily noted at the beginning of his reign that “there is a lot of water in the south and not much water in the north . . . borrowing some water would be good.”2 Mao was soon to unleash the massive workforce of China to renew and expand efforts over the centuries to get water to farmland, control flooding, and reengineer the landscape of modern China. Even without exaggerating the centrality of water issues for historical China, in the modern era water resources are clearly still vital to the country’s economic and ecological health. And hydraulic engineering projects have become increasingly important, both to China’s Asian neighbors and to the global environment. An important new survey of the “ecological history” of modern China concludes that “in growing from impoverished giant to wealthy superpower in seventy years, China has sacrificed whatever resilience its ecosystem once possessed. It has polluted and poisoned its air, water, and soil . . . it has turned forests into plantations and seen deserts expand . . . and has seen lakes come to resemble green paint.”3 Unfortunately, China’s ecological problems have increasingly had negative impacts outside its borders. China’s unprecedented geoengineering to move water from the south to the north is now imperiling both the water resources available downstream from Tibet and the Hindu-Kush mountains, and the economy and ways of living of literally billions of people. China needs ever more land to grow higher quality food and produce higher yields, which frees up land for housing its population. These efforts have led to deforestation not only in China but also in South America and South Asia. And the consistent choice of Beijing’s leadership to drive economic growth at the expense of environmental health has led to dangerous levels of water pollution and poor soil health in China. Environmental degradation has become a growing political issue in China, and its export of this problem has incited considerable international concern. This study explores these issues with a focus on water resources, and it outlines the regional and global impacts of Chinese policy. The study concludes with a discussion of China’s ability and ambition to address these problems as well as how affected countries can help move Chinese leadership toward a more constructive and cooperative effort to develop a solution.
Topic:
Economics, Environment, and Water
Political Geography:
China and Asia

19. Tokyo Has an Opportunity to Become a Financial Hub

Author:
Mark Siegel
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
On his September trip to the United States, Japanese Prime Minister Fumio Kishida attended the United Nations’ annual General Assembly session, and later gave a well-received speech at the Economic Club of New York. His remarks included a comment about how his administration was actively considering a series of policy steps intended to reinvigorate Tokyo’s place in the global financial system; raise Tokyo’s profile as an important financial hub for Asia; and implicitly, regain market share that had been long lost to Hong Kong, and more recently to Singapore. The prime minister’s intentions are laudable, and his suggestions are worth taking seriously. In any case, the proposals under consideration are generally good for financial markets in Tokyo. Cynics will ask whether the horse has left the barn. In a world where continuous face-to-face interaction is less and less necessary for financial transactions, it is fair to ask what it really means to be a financial hub in the twenty-first century. But Japanese officials are not wrong to be concerned about revitalizing Tokyo as an international financial center. Let’s start by acknowledging that the Japanese government—including the prime minister’s office, the Ministry of Finance (MoF), the Financial Services Agency (FSA), and other official bodies—is serious and prepared to take steps to make Tokyo an attractive place for international financial firms to situate their Asian headquarters. After years of asking market participants for recommendations, policymakers have in hand a menu of policy adjustments that make a lot of sense. The list is long, with proposals ranging from offering official business documentation in English, to having special one-stop and fast-track approval processes, to adjusting tax law. Adjustments to tax law are a major issue: for example, the creation of a temporary tax resident status, relaxation of exit tax rules for foreign nationals, and adjustment of tax rules related to the transfer of overseas assets are constructive, long-standing suggestions. Similarly, adjustments to immigration rules related to foreign domestic workers would make it easier for expats to replicate some of the lifestyle benefits that they enjoy in other areas of East Asia.1 Some of the proposals are easy-to-implement, low-cost, measures that would make life less difficult for foreign firms and expats who want to make Tokyo a regional base. And some of them (e.g., major changes to financial sector law and regulation) are harder to imagine, but possible. The three following observations can be made. First, essentially all of the world’s major financial centers of the twentieth century had common law–based legal and regulatory systems. Japan, like France, has a civil law–based system. This difference matters. Both systems function smoothly in the operational sense, but international finance has been dynamic precisely because it rests upon a legal framework that tends to be permissive with guardrails, as opposed to restrictive with an only-allowed-with-permission structure. The point here is not to litigate the virtues and failings of the world’s two most prominent legal systems. The point is that the Japanese government should be honest with itself about the legal and regulatory norms that it collectively thinks of as Japanese, in the context of attracting foreign financial firms to Tokyo. The right kind of policy shifts could be transformative. That said, from a political perspective, some of them will appear to be very challenging. Second, timing matters, and now may be the right time to take policy risks; a window of opportunity may be closing. The reabsorption of Hong Kong into the People’s Republic of China that started under Carrie Lam is now well advanced, and the city has gone from being the preeminent regional hub for Asian finance to being something much less. It continues to lose vitality. A city that had Anglo law with Chinese characteristics (and geography) is now a different place, having adopted Chinese rules with a superficial Anglo form. That transformation has been an unhappy experience for the cosmopolitan residents of the former crown colony, but it is an opportunity for competing financial centers. Singapore, to pick the obvious example, has benefited from Beijing’s heavy-handed approach to Hong Kong. With common law already in place, an existing and well-developed financial community, and not-dissimilar geographic advantages, Singapore is a natural option for regional headquarters and staff as the Hong Kong business environment deteriorates. But Singapore is physically smaller than Hong Kong, and if the latter occasionally felt like the Chinese version of the financial Wild West, the former feels more like a very buttoned-down, engineered community. So while some of what had been Hong Kong’s centrality, and commercial verve, has moved slightly west, a lot of it has been dispersed far and wide. Dubai has picked up some of the slack, and no doubt some of the business has moved back to London and New York—maybe as an interim step, or maybe for good. There is no preeminent Asian financial hub today. It is still in play, and that is a window of opportunity. Third, the metaphorical pie may be shrinking. What if—in a post-COVID world—a central fact of our new environment is that financial centers, like money itself, have been substantially dematerialized? Even the undisputed global financial centers—New York and London—have experienced some of this new reality. Bank and broker-dealer headquarters are no longer beehives of activity, creativity, and deal-making. They are more like corporate conference centers and operation hubs, only housing activities that require collective physical groups on an as-needed basis. Those activities should not be devalued, but these places are relatively empty shells compared to the Before Times (pre-2020). The large banks’ financial statements tell us that these changes have not hobbled actual financial activity, but the staff does not come to the office every day, and does not want to.
Topic:
Economics, Finance, Banking, and Regional Power
Political Geography:
Japan, Asia, and Tokyo

20. Economic and Technological Zones: Economic Strategy in the Tibet Autonomous Region

Author:
Devendra Kumar
Publication Date:
07-2024
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
New Economic and Technology Development Zones (ETDZs) in the Tibet Autonomous Region (TAR) are focused on pockets of the Han population, which will exacerbate tensions within the region. The Tibetan economy is already largely under Han control (except for in the agriculture and livestock sectors), and Han people constitute the majority group in many of Tiber’s urban centers. The TAR government has set up the zones to import practices from elsewhere in the People’s Republic of China (PRC) and shift the region’s economy away from traditional sectors and toward export-oriented industries, construction, and even high-tech manufacturing. The TAR’s external trade is currently limited to Nepal, due to ongoing border tensions with India. Meanwhile, infrastructural challenges hampering the development of the Sichuan-Tibet railway or national highways connecting the TAR with other provinces suggest that further integration with the rest of the PRC remains some way off. In a related policy, the PRC has developed border towns strategically located near land border ports that it has built along its borders with India, Nepal, and Bhutan. Infrastructure buildup on the border could also serve a dual-use purpose in the case of a conflict, as has been the case in India in recent years.
Topic:
Economics, Science and Technology, Manufacturing, Trade, and Autonomy
Political Geography:
China, Asia, and Tibet