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1. Global supply chains: lessons from a decade of disruption

Author:
Luca Léry Moffat and Niclas Poitiers
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
This paper explores both the character and impact of three recent shocks to global supply chains: the COVID-19 pandemic, the Russian invasion of Ukraine and the US-China trade war. These were large shocks which have had significant impacts on domestic and international supply chains, but these impacts have differed in their longevity, economic impact and policy responses. We show that supply chains were remarkably resilient against shocks of such magnitude. However, this resilience was also achieved thanks to the equally remarkable size and scope of policy responses and global supply chain reorganisation. We recommend that pre-emptive policies may be justified to shield households and industry from future shocks. Given the entangled nature of these shocks and that their effects continue to reverberate, we emphasise the need for extensive future research to understand the nature of these shocks and the effectiveness of policy responses.
Topic:
Global Markets, Trade Wars, Trade, COVID-19, Supply Chains, and Russia-Ukraine War
Political Geography:
China, Global Focus, and United States of America

2. Driving Change: How EVs Are Reshaping China’s Economic Relationship with Latin America

Author:
Ilaria Mazzocco, Ryan C. Berg, and Rubi Bledsoe
Publication Date:
09-2024
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
Countries in Latin America and the Caribbean (LAC) are navigating a new geopolitical moment. Some LAC countries are benefitting from increased access to low-cost, high-quality electric vehicles (EVs) and new investment throughout the value chain from China that can help meet governments’ climate and economic objectives. However, this comes with risks, as dependencies on Beijing may be exacerbated at a time when China’s economy is underperforming and geopolitical competition with the United States is on the rise. Washington should find new ways to engage with the region to find solutions that address local demands and simultaneously mitigate U.S. geopolitical risk.
Topic:
Global Markets, Economy, Innovation, and Electric Vehicles
Political Geography:
China, Asia, and Latin America

3. Investigating China’s economic coercion: The reach and role of Chinese corporate entities

Author:
William Piekos
Publication Date:
11-2023
Content Type:
Special Report
Institution:
Atlantic Council
Abstract:
China’s economic statecraft has expanded in line with Beijing’s vision for an international environment that is more conducive to its interests. Chinese President Xi Jinping and the Chinese Communist Party (CCP) are willing to use every means at their disposal to achieve this goal, bringing the full force of the party-state to bear in support of Xi’s objectives abroad and against perceived enemies of the Chinese government. Economic statecraft—the use of economic means to pursue foreign policy goals—has been a consistent feature of Xi’s dealings with CCP competitors and adversaries. Intensifying US-China strategic competition and Beijing’s increasingly overt attempts to assert its preferences only further emphasize the importance of confronting China’s use of economic coercion and influence and understanding the reach of Chinese companies. The deliberate use of economic ties to achieve geopolitical objectives is underpinned by corporate entities that facilitate trade, investment, and financial flows.1 Beijing’s preference for plausible deniability and nontransparency in theory makes corporate entities an attractive mechanism through which to signal its displeasure and to achieve strategic goals. Understanding the reach and role of such entities is, therefore, key to identifying where Beijing might be best positioned to advance its economic statecraft. To that end, this report explores avenues through which researchers can investigate these issues, considers industries that could be vulnerable to future coercion and influence, and offers policy recommendations to counter China’s economic statecraft.
Topic:
Diplomacy, Politics, Global Markets, Economy, Trade, Norms, and Coercion
Political Geography:
China, Asia, and Indo-Pacific

4. China's New Trade Strategy amid US-China Confrontation and Implications

Author:
Sang Baek Hyun, Wonho Yeon, Suyeob Na, Young Sun Kim, and Yunmi Oh
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
In 2021, China has reached the point of entering a new stage of socialist development by declaring the achievement of the goal of building ‘a comprehensive well-off society’. Since the reform and opening up of China, the paradigm of economic and social development is facing the greatest turning point from ‘getting rich first’ to ‘common prosperity’. As the US checks on China intensify during this period of economic transition in China, China is pursuing a new trade strategy to respond to it. In order to understand the changes in the global trade environment in the era of the US-China conflict, it is necessary to understand both the US checks with China and China's trade strategy to respond to them. Most of the recent US-China conflicts are analyzed from the perspective of the US checking in with China, but it is necessary to take a balanced look at what kind of countermeasures China is seeking in order to correctly forecast and prepare for changes in the global trade environment in the future.
Topic:
Foreign Policy, Global Markets, Trade, and Economic Development
Political Geography:
China, Asia, North America, and United States of America

5. How the rest of the world responds to the US-China split

Author:
Hung Tran
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The election of Joe Biden as the forty-sixth US president is not expected to change the list of substantive issues dividing the United States and China, such as trade, investment, technology, geopolitical competition, national security, and human rights—except that the priority among them may change, with human rights concerns moving more to the forefront. However, the tone and modality of the unfolding of the US-China competition will change from Donald Trump’s unilateralism to Biden’s efforts to build alliances with “likeminded” countries in Europe, Asia, and elsewhere to deal with the challenges China has posed. In a way, Biden’s alliance-building approach may intensify pressure on the rest of the world to take sides. How countries respond to this challenge, unwelcome by most, depends on whether they see themselves as competitors to China, or as “price takers” in the international economic system.
Topic:
Global Markets, Regulation, Finance, Economy, Trade, and Digital Policy
Political Geography:
China, Europe, Asia, North America, United States of America, and Indo-Pacific

6. Work for Others, not Yourself: Globalization, Protectionism and Europe’s Quest for Strategic Autonomy

Author:
Fredrik Erixon
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Protectionism and mercantilism are yet again at the centre of global economic policy. “America First” is the guiding ethos in a good part of US international economic policy. Beijing is taking a larger stake in China’s economy and hand out privileges to domestic firms. Europe is increasingly occupied by achieving “strategic autonomy” and to create European champions at the expense of competition. Old and disreputed economic doctrines are getting a new lease on life. Behind this new orientation in international economic policy stands the old idea that a strong economy is an economy not dependent on others. Human prosperity – our story of rags to riches – tells a very different story. Prosperity is generated when people collaborate and improve our collective intelligence. Open economies are much better at creating wealth because they operate by the principle that people should work for others, not themselves. They specialize – and in the process, they get far more dependent on others. Dependency is a factor of success; economic sovereignty is a sure way of depriving people of opportunity and prosperity.
Topic:
International Political Economy, International Trade and Finance, Global Markets, and Strategic Competition
Political Geography:
United States, China, and Europe

7. Learning to Love Trade Again

Author:
Frank Lavin and Oscar Guinea
Publication Date:
06-2020
Content Type:
Research Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
We are at the moment, the first in seventy-five years, where there is no international consensus in support of trade. Indeed, trade is unloved, unsupported, and even unwanted. There is no shortage of topics in the rhetoric of trade complaints: from the rapid rise of China to Coronavirus as a metaphor for the evils of greater connectivity. Regardless of the validity of these complaints, none of them negate the central truth of trade: countries that engage in trade move ahead, and those that do not, stagnate. Our political leaders disagree. Anti-trade positions are held by leaders across the political spectrum, from Donald Trump to Bernie Sanders. And yet, the public is increasingly warm to the idea of trade. When Gallup asks Americans, “Do you see foreign trade more as an opportunity for economic growth through increased U.S. exports or a threat to the economy from foreign imports?” a record high of 79% see trade as an opportunity, with 18% viewing it as a threat. How did the world arrive at this moment where the benefits of trade are clearly evidenced while trade has become politically toxic? We identify four main factors: (i) U.S. absenteeism from the leadership role; (ii) detachment between trade and security architecture; (iii) no alternative leadership in Europe or elsewhere; and (iv) the cumbersome WTO process. Against this background we put forward five initiatives that will be big enough to count but unobjectionable enough to be adopted. The Big Three. The U.S., EU, and Japan, should establish a consultative body on trade to forge a new approach that allows trade to move ahead in the absence of universal consensus. No harm, no foul. Each of the Big Three should commit to zero tariffs on any item not produced in each particular market. A de minimis strategy. Tariffs should be eliminated on all products where the current tariff is less than 2%. At that level tariffs are simply a nuisance fee. Mind the social costs. Expand the Nairobi Protocols to include health products and green tech. Scrapping import tariffs on medical and green goods would not only encourage additional trade but will also provide health and environmental benefits. Harmonize down. The Big Three should commit that on every tariff line each of the three will be no worse than the next worse. In other words, each of the Big Three will agree to reduce its tariff on every product where it has the highest tariff of the three. These actions will spur the WTO, not undermine it. The measures we propose can be set up on a plurilateral basis that would allow other trading powers to participate. By breaking away from the tyranny of universal consensus, these actions will encourage the trading community – including the WTO – to get back in forward motion. In some respect, convergence between the Big Three is already happening. The EU and Japan signed an FTA that lowers import tariffs between these two economies, while the U.S. and Japan agreed to negotiate a comprehensive FTA. And if China is willing to step up? China should be welcomed into this group if it supports the four initiatives, changing the Big Three to the Big Four.
Topic:
International Political Economy, International Trade and Finance, Global Markets, Trade, and WTO
Political Geography:
United States, Japan, China, Europe, and Global Focus

8. United G20 must pave the way for robust post-COVID-19 recovery

Author:
Phil Thornton
Publication Date:
07-2020
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The world is facing unprecedented health and economic crises that require a global solution. Governments have locked down their economies to contain the mounting death toll from the COVID-19 pandemic. With this response well underway, now is the time to move into a recovery effort. This will require a coordinated response to the health emergency and a global growth plan that is based on synchronized monetary, fiscal, and debt relief policies. Failure to act will risk a substantial shock to the postwar order established by the United States and its allies more than seventy years ago. The most effective global forum for coordinating this recovery effort is the Group of 20 (G20), which led the way out of the global financial crisis (GFC) in 2009, the closest parallel we have to the current catastrophe. Eleven years ago, world leaders used the G20 meeting in London as the forum to deliver a unified response and a massive fiscal stimulus that helped stem economic free fall and prevented the recession from becoming a second Great Depression. A decade on, it is clear that the G20 is the only body with the clout to save the global economy. This does not mean that the G20 should be the only forum for actions for its member states. The United States, for example, should also work closely with like-minded states that support a rules-based world order, and there are many other fora where it can and must be active with partners and allies. But no others share the G20’s depth and breadth in the key focus areas for recovery. The other multilateral organizations that could take up the challenge lack either the substance or membership. The United Nations may count all countries as members but is too unwieldly to coordinate a response. The International Monetary Fund (IMF) has the resources but requires direction from its 189 members. The Group of Seven (G7), which once oversaw financial and economic management, does not include the fast-growing emerging economies. The G20 represents both the world’s richest and fastest-growing countries, making it the forum for international collaboration. It combines that representation with agility.
Topic:
Security, Energy Policy, G20, Global Markets, Geopolitics, Economy, Business, Trade, Coronavirus, and COVID-19
Political Geography:
China, Middle East, Canada, Asia, Saudi Arabia, North America, and United States of America

9. Making the most of Prosper Africa: Leveraging US competitiveness in African markets

Author:
Audrey Hruby
Publication Date:
03-2020
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
Global powers are jockeying for access to opportunities in African markets. In recent years, through the Forum on China-Africa Cooperation, the Tokyo International Conference of African Development, the Russia-Africa Summit, and many others, the world’s largest economies have sought to make headway in what are seen as fast-growing and lucrative new markets. In this environment, effective United States (US)-Africa policy requires greater focus on areas of American competitiveness and concerted efforts to educate, mobilize, and support US commercial success in African markets. In this update of her 2017 issue brief “Escaping China’s shadow: Finding America’s competitive edge in Africa,” Senior Fellow Aubrey Hruby outlines recommendations for how to best utilize Prosper Africa and leverage American private sector competitiveness by focusing efforts on sectors in which the United States already leads.
Topic:
Global Markets, Economy, Trade, and Strategic Competition
Political Geography:
Africa, China, and United States of America

10. The China Trade Challenge: Phase II

Author:
Committee for Economic Development of the Conference Board
Publication Date:
07-2020
Content Type:
Special Report
Institution:
The Conference Board
Abstract:
China’s fast-paced economic rise and defiance of globally accepted market rules—along with the growing and yet unknown economic impact of the coronavirus (COVID-19)—are driving the next phase of US-China trade negations to the top of the nation’s post-election agenda. While the Phase I US-China trade deal has eased tension, it also set the stage for discussions on other important economic disputes, including forced technology transfer, cyber theft of intellectual property (IP), industrial policies, state subsidies, and new technology, according to a new Solutions Brief, The China Trade Challenge: Phase II, by the Committee for Economic Development of The Conference Board (CED).
Topic:
Bilateral Relations, Global Markets, Economy, Global Political Economy, and Trade
Political Geography:
China, Asia, North America, and United States of America