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61. China and the Middle East: Venturing into the Maelstrom

Author:
James M Dorsey
Publication Date:
03-2016
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies (NTS)
Abstract:
China’s increasingly significant economic and security interests in the Middle East have several impacts. It affects not only its energy security but also its regional posture, relations with regional powers as well as the United States, and efforts to pacify nationalist and Islamist Uighurs in its north-western province of Xinjiang. Those interests are considerably enhanced by China’s One Belt, One Road initiative that seeks to patch together a Eurasian land mass through inter-linked infrastructure, investment and expanded trade relations. Protecting its mushrooming interests is forcing China to realign its policies and relationships in the region. As it takes stock of the Middle East and North Africa’s volatility and tumultuous, often violent political transitions, China feels the pressure to acknowledge that it no longer can remain aloof to the Middle East and North Africa’s multiple conflicts. China’s long-standing insistence on non-interference in the domestic affairs of others, refusal to envision a foreign military presence and its perseverance that its primary focus is the development of mutually beneficial economic and commercial relations, increasingly falls short of what it needs to do to safeguard its vital interests. Increasingly, China will have to become a regional player in competitive cooperation with the United States, the dominant external actor in the region for the foreseeable future. The pressure to revisit long-standing foreign and defence policy principles is also driven by the fact that China’s key interests in the Middle East and North Africa have expanded significantly beyond the narrow focus of energy despite its dependence on the region for half 1 China has signalled its gradual recognition of these new realities with the publication in January 2016 of an Arab Policy Paper, the country’s first articulation of a policy towards the Middle East and North Africa. But, rather than spelling out specific policies, the paper reiterated the generalities of China’s core focus in its relations with the Arab world: economics, energy, counter-terrorism, security, technical cooperation and its One Belt, One Road initiative. Ultimately however, China will have to develop a strategic vision that outlines foreign and defence policies it needs to put in place to protect its expanding strategic, geopolitical, economic, and commercial interests in the Middle East and North Africa; its role and place in the region as a rising superpower in the region; and its relationship and cooperation with the United States in managing, if not resolving conflict.
Topic:
Security, Diplomacy, Economics, Imperialism, and Infrastructure
Political Geography:
Africa, United States, China, Middle East, Asia, and North Africa

62. Is Indonesia the Next China?

Author:
Wendy Dobson
Publication Date:
02-2016
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper reviews Indonesia’s economic prospects and what these imply for a closer relationship with Canada. By posing the question “Is Indonesia the next China?,” the author suggests that Indonesia has the considerable economic potential envisaged by foreign investors, but conveys uncertainty as to whether Southeast Asia’s most populous country can make the changes necessary to realize that potential. A review of the economic record and comparison of China’s and Indonesia’s economic structures, endowments and institutions show major differences between the two countries. The paper further questions what it will take to realize Indonesia’s potential, finding the answers to be: human capital development; increased participation in the region’s global value chains; meeting the growing middle-class demand for modern services; raising productivity in agriculture and fishing; and increasing use of the Internet. Failure to make these changes will increase the chances of Indonesia’s growth in per capita incomes slowing and falling into the middle-income trap. Canada’s role will be to monitor closely how Indonesia tackles its five priorities at the same time as it responds to the opportunities to exploit Indonesia’s abundant natural resources, urbanization and its expanding consumer demand for modern services and educational opportunities.
Topic:
Economics, Emerging Markets, Human Welfare, International Trade and Finance, Natural Resources, and Regulation
Political Geography:
China and Indonesia

63. At the Crossroads: The TPP, AIIB, and Japan's Foreign Economic Strategy

Author:
Saori N. Katada
Publication Date:
05-2016
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
In 2015, two mega-initiatives took shape that will affect economic relations in the Asia-Pacific region: the US-promoted Trans-Pacific Partnership (TPP) trade agreement and the China-led Asian Infrastructure Investment Bank (AIIB). Although they address different needs, both are expected to have profound effects on Asia's economic governance in the near future, and will shape economic norms in the Asia Pacific and beyond. Japan has joined the TPP but stayed out of the AIIB, decisions that might seem counterintuitive considering its history of resisting trade liberalization and of promoting infrastructure investment. Is Japan simply favoring its US ally over rival China? Or is it that Japan's position on the TPP and AIIB aligns with its own economic priorities, and enhances its geo-economic advantage? With a US-China competition over economic ideas and regional strategies, Japan occupies a unique position that may allow it to influence the direction of Asia-Pacific economic governance, which is now being battled out by the two "titans."
Topic:
Economics, International Trade and Finance, Political Economy, and Treaties and Agreements
Political Geography:
China and Asia

64. S-Japan Relations and Southeast Asia: Meeting Regional Demands

Author:
Saul P. Limaye and Tsutomu Kikuchi
Publication Date:
01-2016
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
Until recently, Southeast Asia had not been a region of sustained focus for the US-Japan relationship. But the situation is changing. The international relations of the Asia-Pacific is becoming more "multipolarized." This requires the US and Japan to think about the future of the region beyond the issue of US-China relations, which has preoccupied past discussions. A number of nations and institutions in the Asia-Pacific region will substantially affect the region's future. Southeast Asian nations and the Association of Southeast Asian Nations (ASEAN) are among them. A new era of more coordinated, sustained, and combined commercial and security involvement by the US and Japan in Southeast Asia may be at hand. In light of these changes, the East-West Center in Washington (EWCW), in collaboration with the Japan Institute of International Affairs (JIIA), and through the support of the Sasakawa Peace Foundation (SPF), initiated a dialogue with Southeast Asians about their perspectives on how the US-Japan relationship and alliance could or should approach cooperation with the region.
Topic:
Security, Economics, Markets, and Peacekeeping
Political Geography:
United States, Japan, China, and Asia-Pacific

65. From Catching Up to Forging Ahead in Advanced Manufacturing—Reflections on China’s Future of Jobshina's Evolving Role in Latin America: Can it Be a Win-Win?

Author:
Dieter Ernst
Publication Date:
03-2016
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
This paper explores what we know about possible employment effects of the 10-year plan, issued by the State Council on May 19, 2015, entitled Made in China 2025. MIC2025 was designed to address China’s emerging labor shortage challenge. To achieve this goal, the plan seeks to boost labor productivity through an increased use of robots and through network-based upgrading of the entire industrial value chain and related services. How might the projected increase in labor productivity affect the creation and quality of jobs in China? Will China’s push into advanced manufacturing now move the country’s manufacturing employment closer to the pattern of “employment de-industrialization” observed in the US and other industrialized countries? How China will cope with the advanced manufacturing challenge for employment will have major implications not only for the US and other industrialized countries, but also for emerging economies and, most importantly for the majority of developing countries that are still struggling as latecomers to labor-intensive industrial manufacturing. The paper lays out objectives of the MIC 2025 plan and highlights a failure of Chinese policy makers to take into account employment effects and other labor market issues when they design their grand visions of industrial policy. The paper finds that until 2014, manufacturing has acted as an employment absorber in China. However new data on unemployment, labor force participation and income inequality signal that China may now be moving towards an “employment de-industrialization” pattern, unless enough knowledge-intensive service jobs will be created in China’s growing information economy. The paper concludes with implications for policy and further research.
Topic:
Economics, International Political Economy, Markets, and Labor Issues
Political Geography:
China

66. Beyond Manufacturing: Developing the Service Sector to Drive Growth in the PRC

Author:
Wei Wang, Gemma Estrada, Jurgen Conrad, Sang-Hyo Lee, and Donghyun Park
Publication Date:
05-2016
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
As demand from global markets declines, slowing exports of manufactured goods from the People's Republic of China means the country must increasingly rely on domestic markets for growth. Unlike manufactured goods, services—those "intangible" products that include everything from transportation to scientific research to real estate services—are geared more toward domestic markets. Services, then, will be key to the rebalancing process. However, while the service sector has grown rapidly in the PRC, it continues to lag behind other countries at similar stages of development. In addition, the sector is dominated by traditional low-end types of services, rather than knowledge-intensive services. Heavy regulatory burdens, barriers to trade in services, and an unfavorable policy environment have been major obstacles to upgrading the sector and improving its competitiveness. Policy reform should focus on strengthening competition to raise productivity, with the goal of increasing not only the number of jobs and contribution to GDP, but also of positioning the service sector to compete internationally and spur export growth.
Topic:
Economics, Markets, Reform, and GDP
Political Geography:
China

67. Service Sector Reform in China

Author:
Ryan Rutkowski
Publication Date:
01-2015
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Faced with slowing economic growth, Chinese policymakers now recognize that the service sector of the economy—transportation, communications, finance, and health care—could spur economic activity and employment. The catch is that China must reform these and other areas to accomplish this goal. Chinese leaders have outlined an ambitious agenda for reform, but myriad vested interests could slow or block their plans. This Policy Brief evaluates the steps taken so far and the difficulties that lie ahead in implementing them. If policymakers fail to reform and open up the service sector, they run the risk of seriously impairing China's growth prospects.
Topic:
Economics, International Trade and Finance, Labor Issues, Financial Crisis, and Reform
Political Geography:
China

68. After the freefall, what to expect from commodity prices

Publication Date:
10-2015
Content Type:
Working Paper
Abstract:
After the plunge in commodity prices in 2015, the outlook for raw materials remains highly uncertain amid slowing economic growth in China and looming interest rate rises in the US. In China—which gobbles up nearly one-half of the world’s consumption of aluminium, copper and coal—demand for base materials risks moderating further as the economy moves away from an investment-driven growth model. This will continue to have knock-on effects on the performance of commodity-exporting economies, weighing down on global consumption of raw materials. However, supply responses are beginning to emerge from commodity producers worldwide. Coupled with less favourable weather prospects, this will lead to some market tightening next year, allowing for some price stabilisation after four years of decline. This report provides a snapshot of The Economist Intelligence Unit’s current commodity price indexes, exploring the changing prices for industrial raw materials and food, feedstuffs & beverages. Each article provides analysis and forecasts across a number of key commodities, helping you to assess the fast-changing environment of commodity markets and influence key decision-making processes.
Topic:
Economics, Emerging Markets, Industrial Policy, International Trade and Finance, and Monetary Policy
Political Geography:
China

69. Happiness and health in China: The paradox of progress

Author:
Carol Graham, Shaojie Zhou, and Junyi Zhang
Publication Date:
06-2015
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
The past two decades in China brought unprecedented rates of economic growth, development, and poverty reduction. Indeed, much of the reduction in the world’s extreme poverty rates during that time can be explained by the millions of people in China who exited poverty. GDP per capita and household consumption increased fourfold between the years 1990 and 2005.1 China jumped 10 places forward on the Human Development Index from 2008 until 2013, moving up to 93 of 187 countries, and life expectancy climbed to 75.3 years, compared to 67 years in 1980.
Topic:
Development, Economics, Health, and Human Welfare
Political Geography:
China

70. China's Evolving Role in Latin America: Can it Be a Win-Win?

Author:
Enrique Dussel Peters
Publication Date:
09-2015
Content Type:
Working Paper
Institution:
Atlantic Council
Abstract:
Weeks before Chinese President Xi Jinping meets with President Barack Obama in Washington, the Atlantic Council's Latin America Center launched a new report that unravels the complexities of the Latin America-China relationship. Titled China's Evolving Role in Latin America: Can it Be a Win-Win?, the report provides five recommendations to help both China and Latin America usher in a mutually beneficial post-commodity-boom relationship. The key to long-term success will be to insure that the relationship promotes—rather than delays—economic growth and social progress in the hemisphere. In the report, renowned Mexico-based China Expert Enrique Dussel Peters, an Atlantic Coucil author and Professor at the Graduate School of Economics at the National Autonomous University of Mexico (UNAM), calls for a ratcheting up of strategic planning and multilateral support so the relation¬ship is a win-win for all parties, including the United States. A deep dive of the state of play is provided for five countries: Argentina, Brazil, Cuba, Mexico, and Venezuela. These countries illustrate the spectrum of ties with China, ranging from those with long and complex historical relation¬ships to those almost entirely structured around recent opportunities for economic cooperation.
Topic:
Diplomacy, Economics, and Bilateral Relations
Political Geography:
China and Latin America