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21. 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

22. The Sky Is Not the Limit. Geopolitics and Economics of the New Space Race

Author:
Alessandro Gili
Publication Date:
01-2024
Content Type:
Special Report
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
Space is a contested domain for its very nature and today it is evidently becoming an increasingly important enabler of economic and military power. An increasing number of actors, infrastructures and technologies deployed in space also raises concerns for safety and security, especially in cyberspace. Many countries are striving to achieve space capabilities and autonomous access to space, and this is having a tremendous geopolitical impact, especially since space is emerging as an increasingly critical military and strategic domain. The development of the new space economy, which is increasingly involving the private sector and many industrial actors and services, will also be a game changer for the international economy. The space race likewise implies disruptive technologies that could contribute massively to the energy and digital transitions, accelerating solutions that could benefit humanity. A new international governance system for space is therefore needed urgently, considering that the current rules are no longer able to respond to a sector evolving at such a rapid pace. Which actors are leading the race? Which economic sectors could benefit the most and what could the new space economy mean for the world? How is space emerging as a military domain against a backdrop of increasing international tensions? What would a new system of global governance for space look like?
Topic:
Economics, Politics, Infrastructure, Geopolitics, Regulation, and Energy Security
Political Geography:
Russia, China, Europe, India, Italy, Global Focus, United States of America, and Space

23. Navigating the treacherous political economy of structural reform

Author:
Davide Furceri, Jonathan Ostry, and Chris Papageorgiou
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
We examine the economic and electoral effects of liberalisation measures using newly-constructed databases on structural economic reforms and the outcome of democratic elections since the 1970s. The data shows a remarkable slowdown in the pace of liberalisation in both advanced and emerging market and developing countries since the 1990s. A debate has emerged about the causes of this slowdown, including the possibility that reforms do not deliver the economic benefits that advocates, including the multilateral financial institutions, trumpeted. Some have pointed to the fact that the current and previous United States administrations have abandoned neoliberal policies in favour of more government intervention in the economy, and the effect has been globally contagious. Our empirical analysis suggests that the growth dividend from liberalisation is economically and statistically significant, but it emerges only slowly over time. Because of this delay, liberalising reforms are costly to democratic incumbents when they are implemented close to elections. Reforms may generate immediate concentrated losses, which elicit an electoral backlash, especially when the aggregate gains are only visible several years after the reform’s implementation. The electoral penalty is also sensitive to overall business-cycle conditions, being much larger when an economy is in recession. Electoral effects also differ depending on the type of reform. Notably, financial reforms generate more perceptible growth-equity trade-offs than real-economy reforms, especially when implemented during weak economic conditions. The political economy of reform is treacherous. To avoid adverse electoral effects, timing reform early in the electoral term and when business-cycle conditions are favourable is critical. So too is avoiding reforms that generate large distributional costs in the face of small aggregate gains (an adverse growth-equity trade-off). Focusing on these considerations is critical to reinvigorate support for structural reform.
Topic:
Economics, Political Economy, Reform, Elections, and Liberalization
Political Geography:
Global Focus

24. Who Governs? 50 years since the February 1974 election

Author:
Robert Saunders
Publication Date:
03-2024
Content Type:
Video
Institution:
Mile End Institute, Queen Mary University of London
Abstract:
50 years ago this month, Prime Minister Edward Heath called a general election. With severe economic problems including the quadrupling of oil prices, a particularly fierce miners’ strike and the introduction of a three-day week, Heath addressed the nation, telling the electorate that they had to choose between ‘a strong Government which has clear authority for the future to take decisions which will be needed’ and one that ‘abandons the struggle against rising prices under pressure from one particularly powerful group of workers’. The result was a monumental moment in British political history – the first hung parliament since 1929 – and, arguably, as Alan Bancroft suggests, consigned the ‘post-war settlement’ to the ‘intensive care unit, ultimately leading to its demise in 1979’. To mark this significant anniversary, the Edward Heath Academic Forum – a new academic network to encourage study of the politics of the 1970s, and Heath’s contribution to British, European, and global politics – held its first public event at Queen Mary University of London. Dr Robert Saunders as well as Lord Butler (Private Secretary to the Prime Minister, 1972-74) and Lord McNally (Political Advisor to James Callaghan, 1974-76, and Head of Political Office at 10 Downing Street, 1976-79) revisit the campaign, the Conservatives’ struggle to sustain the focus on ‘Who Governs?’, Heath’s efforts to form a coalition with the Liberals, and the eventual formation of a minority Labour government.
Topic:
Economics, Elections, Domestic Politics, Prime Minister, and Edward Heath
Political Geography:
United Kingdom and North America

25. Nobody wins unless everybody wins: The Coles review into the sustainment of Australia’s Collins-class submarines

Author:
Andrew Davies
Publication Date:
05-2024
Content Type:
Special Report
Institution:
Australian Strategic Policy Institute (ASPI)
Abstract:
In 2003, Australia became the proud owner of the last of six new-build Collins-class submarines. Less than a decade later, the fleet was in a poor state of repair, and at times only one or two of the boats were available to the Royal Australian Navy. This account by Andrew Davies explains how the situation was remediated by bringing in a team of highly experienced naval professionals to take an uncompromising look at the arrangements in place to manage a vital national defence asset. Despite a public perception that the submarines were inherently defective, the problems were in fact almost entirely due to dysfunctional and often rancorous organisational dynamics between the key players. In the space of just a few years, and with remarkably little required in the way of additional funding, the situation took a dramatic turn for the better. As with earlier ASPI case studies on defence projects, Nobody wins unless everybody wins is designed to help those in Defence, industry and parliament and other interested observers to better understand the complexities of the business, all with the aim of improving how Australia equips and sustains its defence force.
Topic:
Defense Policy, Economics, National Security, Armed Forces, Defense Industry, and Submarines
Political Geography:
Australia and Australia/Pacific

26. The cost of Defence: ASPI Defence budget brief 2024-2025

Author:
Bec Shrimpton
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Australian Strategic Policy Institute (ASPI)
Abstract:
Australia needs to spend more on defence—and it needs to do so immediately. The strategic imperative has been firmly established in the government’s own major defence documents. The Albanese government and the Coalition opposition agree that we are in the gravest geopolitical period in generations and this is only going to intensify. But as the Australian Strategic Policy Institute’s latest Cost of Defence report finds, the rhetorical urgency is not being matched by action in the form of defence investment. The May budget is the latest demonstration of this mismatch, lacking spending for swift increases in capabilities that the Australian Defence Force would need if our region were to deteriorate quickly. In particular, this year’s budget priorities are not directed towards strengthening the Australian Defence Force’s ability to fight in the next decade. This is not doom-mongering; the government has acknowledged that the warning time before any conflict, which had long been set at 10 years, has shrunk to effectively zero time. We have war in Ukraine and the Middle East, aggression and increasingly dangerous and unprofessional behaviour from China causing instability and confrontation in the South China Sea and across the Taiwan Strait, erosions of the rule of law and revisionist agendas from authoritarians. Instability is heightened by foreign interference, economic coercion and artificial intelligence-enabled dangers such as cyber attacks and disinformation. If war were to break out at any time in the next 10 years, our military would essentially fight with the force it has today. Based on current resourcing, nothing significant will change over the decade. Most of the major new capabilities in the government’s defence investment blueprint are two decades away from being fully fielded. That blueprint does contain some shorter-term enhancements, but these will not be fielded until the 2030s. The welcome $5.7 billion in new defence spending over the four-year forward estimates period is devoted to just three priorities: the AUKUS submarines, the next fleet of surface warships and investment in long-range strike, targeting and autonomous systems. But two thirds of this funding doesn’t arrive until 2027-28. The relatively impressive longer term plan leaves us vulnerable in the immediate period ahead. More money immediately is not a silver bullet, and ambition must be balanced with how much Defence can actually spend each year. But the nation’s security requires a two-pronged strategy of enhancing our existing force to meet threats within the decade while investing in long term capabilities. Other countries are furiously pursuing new capabilities that can be put into action quickly—such as creating masses of small drones and prototyping and developing new technologies. We talk about technology and asymmetric advantage—playing to your strengths and finding effective means to exploit an opponent’s weaknesses–yet we lack a credible pathway to bring them into operation to bolster the force we have today. Over the longer term, the picture starts gradually to improve. The $50 billion in additional spending over the next decade is an important commitment, even if far away. The plan for a complete recapitalisation of the surface combatant fleet will eventually give us the biggest and most capable navy Australia has had since World War Two. But, so far, we are failing to grasp the opportunity to link our traditional large platforms such as submarines and warships to more modern developments in warfare—drones and various small uncrewed and smart capabilities. AI, robotics, electronic warfare and space capabilities remain aspirational, without any pathway for inclusion and integration into a truly focused force capable of meaningful deterrence and warfighting. That is why it is so important to realise AUKUS Pillar II, which is dealing with these capabilities. It’s easy to criticise; harder to do. All governments are grappling with tight budgets amid competing demands and the unremitting expectations of voters and taxpayers. As a nation, we need to accept the need for higher defence spending. Hoping that conflict won’t come is not a viable strategy. If we are prepared for war, we have a better chance of deterring and hence averting it. Europe is living that lesson now, having put all hope in the judgment that global trade and economic entanglement would bring security. Now it is clear that military investment is imperative to deter war or best prepare nations for it. The government has a vital responsibility to speak plainly to the nation about the geopolitical risks and the possibility of conflict. We need to grasp the challenge that is in front of us today, not in three or five years’ time. Otherwise, we risk delivering on Macarthur’s famous two word warning: “The history of failure in war can almost always be summed up in two words: “Too late.” Too late in comprehending the deadly enemy. Too late in realizing the mortal danger. Too late in preparedness. Too late in uniting all possible forces for resistance.” Why take the risk of only acting after a crisis and saying better late than never? The world in turmoil demands we act in real time to both deter crises and be best prepared for them.
Topic:
Defense Policy, Economics, National Security, Armed Forces, Budget, and Defense Industry
Political Geography:
Australia and Australia/Pacific

27. A Subdued Environment and Missed Opportunities

Author:
Scott Snyder and See-Won Byun
Publication Date:
01-2024
Content Type:
Journal Article
Journal:
Comparative Connections
Institution:
Pacific Forum
Abstract:
Chinese diplomacy toward the Korean Peninsula in late 2023 sputtered forward, driven more by a calendar of bilateral anniversaries with North Korea and multilateral gatherings involving South Korea than any sense of strategic purpose. Both relationships seemed preoccupied with off-stage developments such as the September summit between Kim Jong Un and Vladimir Putin and the momentum of US-Japan-South Korea trilateral relations, rather than any inherent dynamism of their own. Still, regular Sino-North Korean bilateral exchanges ahead of the 75th anniversary of the bilateral relationship and Sino-South Korean bilateral economic dialogues provide opportunities to overcome resistance and sustain progress in the face of deepening major power rivalries. Senior-level dialogues between China and North Korea occurred on North Korea’s 75th founding anniversary in September, with the visit of Chinese Vice Premier Liu Guozhong to Pyongyang, a visit that occurred against the backdrop of the second US-South Korea Nuclear Consultative Group meeting, North Korea’s first successful indigenous satellite launch, and North Korean Vice Foreign Minister Pak Myong Ho’s visit to Beijing. Meanwhile, ministerial and working-level economic dialogues on issues such as supply-chain stability, export controls, and trade facilitation continued between China and South Korea, punctuated by a notable bilateral exchange between Chinese President Xi Jinping and South Korean Prime Minister Han Duck-soo in late September on the 19th Asian Games in Hangzhou. But these exchanges did not generate the traction necessary for South Korean President Yoon Suk Yeol to have substantive bilateral meetings with President Xi on the sidelines of the APEC meeting in San Francisco in November. Bilateral and trilateral foreign ministerial meetings in Busan between South Korean Foreign Minister Park Jin and counterparts Wang Yi and Kamikawa Yoko—the first in four years—failed to generate sufficient momentum to set a date for the resumption of China-Japan-South Korea summitry. Instead, the resumption of China-South Korea or China-Japan-South Korea summitry will depend on developments in 2024.
Topic:
International Relations, Foreign Policy, Diplomacy, Economics, Dialogue, and Regional Security
Political Geography:
China, South Korea, and North Korea

28. 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

29. Mitigating the Political Cost of Financial Crisis with Blame Avoidance Discourse: The Case of Turkey

Author:
Büşra Söylemez-karakoç
Publication Date:
08-2024
Content Type:
Journal Article
Journal:
Uluslararasi Iliskiler
Institution:
International Relations Council of Turkey (UİK-IRCT)
Abstract:
How do centralized governments mitigate the political cost of severe financial crises? The economic voting scholarship has established that the clarity of responsibility, i.e., government accountability for economic conditions to the mass public, is a necessity for electoral reward or punishment for economic performance. On the one hand, political centralization, which reduces the number of veto players, may increase the visibility of the role of the executive in policy success or failure. On the other hand, it allows an uncontested blame avoidance discourse, especially when accompanied with democratic backsliding. Furthermore, the recent backlash against globalization has enabled blame shifting to international actors in many countries. Against this theoretical framework, we comparatively analyze the responsibility attribution discourses for the 1994, 2001, and 2018-2022 financial crises in the statements of incumbent presidents, ministers, and parliament members of Turkey. We find that while blame avoidance discursive strategies have been attempted in all three cases, the responsibility attribution for the 1994 and 2001 crises mostly targeted the executive. In contrast, for the ongoing crisis, the responsibility discourse is dominated with blaming international political economy factors, creating ambiguity, and targeting domestic non-governmental actors.
Topic:
Economics, Globalization, Politics, Financial Crisis, Voting, and Democratic Backsliding
Political Geography:
Turkey and Middle East

30. 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