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71. How should we view China's rise?

Author:
CHRISTOPHER K JOHNSON, Amy Searight, and Victor D. Cha
Publication Date:
12-2017
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
It is evident that China’s rise will continue to dominate the geopolitics of Asia. How do the Chinese view this? Do its neighbors view it as inevitable, benign, or concerning? Where is there greatest convergence of Chinese views with that of its neighbors, and where is the greatest divergence?
Topic:
Globalization, International Political Economy, and International Trade and Finance
Political Geography:
China

72. U.S.-Sino Relations in the Arctic A Roadmap for Future Cooperation

Author:
Heather A. Conley
Publication Date:
01-2017
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
The emergence of the Arctic as a region of political and economic opportunity adds a new dimension to U.S.-China relations. Despite divergent priorities in the region, there are opportunities for greater cooperation. Both countries experience the physical challenges of climate change while investing in scientific research to gain a better understanding of a transforming Arctic. They both also seek cooperation through the Arctic Council and the International Maritime Organization to promote governance in the region. For these reasons, among others, the United States and China should create a more purposeful dialogue on a range of Arctic issues. U.S.-Sino Relations in the Arctic: A Roadmap for Future Cooperation is the result of fruitful exchanges between American and Chinese experts who addressed a range of issues: the future of Arctic governance, geopolitical factors shaping the Arctic’s future, international maritime issues in the Central Arctic Ocean, future trends in sustainable Arctic development, and new bilateral scientific research initiatives in the Arctic. Through frank and candid exchanges, this report aims to lay the foundation of strong bilateral cooperation between the United States and China in the Arctic.
Topic:
International Political Economy, International Trade and Finance, Geopolitics, and Climate Finance
Political Geography:
China, America, and Arctic

73. Writing New Rules for the U.S.-China Investment Relationship

Author:
Jennifer M. Harris
Publication Date:
12-2017
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Chinese outbound investment is on the rise, and much of it is finding its way into the United States. Be- tween 2010 and 2015, China’s foreign direct investment (FDI) inflows to the United States grew by an average of 32 percent annually.1 Within the past two years alone, Chinese foreign investment inflows to the United States increased four-fold, and available data suggests 2017 will see the second highest annual investment on record, after 2016.2 This is not a two-way street: the United States and other foreign investors do not enjoy similar open market access in China. China maintains a dizzying assortment of formal and informal barriers to for- eign investment—from outright restrictions and quotas to mandatory joint ventures, forced localization measures, and domestic licensing regimes. Despite years of negotiations, these barriers are, if anything, growing more cumbersome in many sectors. U.S. firms paint a darkening picture of the business climate they face in China. U.S. FDI in China has slowed considerably in recent years: after growing roughly 180 percent from 2002 to 2007 (albeit from a low baseline), U.S. FDI flows into China have declined since 2012.3 The one-way surge of Chinese investment into the United States comes against a backdrop of strategic mistrust between Washington and Beijing. Ongoing accusations of state-sponsored cyber predation of U.S. firms, Beijing’s increasing aggressiveness over territorial disputes, its systematic efforts to under- mine the U.S. alliance system in Asia, and mounting tensions over North Korea all contribute to a dark- ening mood in the U.S.-China relationship. And, like so much involving China, this investment is simply different. Rarely, if ever, has the United States seen an increase in investment of this magnitude—espe- cially from a non-ally and especially from one where the lines between state ownership and private own- ership are so inherently blurred. For all the concern surrounding Japanese investment in the United States in the 1980s—coming as it did amid fierce economic competition—those debates ultimately re- mained under the umbrella of the U.S.-Japan military alliance. All of this raises questions about whether the United States needs to tighten its stance on Chinese in- bound investment; proposals to that effect have bipartisan support in the Congress. The Donald J. Trump administration has signaled its desire for a tougher approach in its economic dealings with China, which U.S. businesses seem to welcome. One foundation for such an approach is the principle of reciprocity. Roughly two dozen sectors in China—construction, mining, banking, insurance, and so on—remain effectively off-limits to American investment, because the Chinese government protects its domestic companies through regulations and financial subsidies. Even in sectors that technically allow foreign investment, discriminatory industrial policies tilt the playing field in favor of Chinese firms. Until this changes, Washington would be justi- fied—even obligated—to limit Chinese investment in the U.S. market. However, U.S. policymakers do not have a consensus on what a policy of reciprocity would entail, and different policy interpretations could spell quite different economic and foreign policy consequences for the United States. The United States should aim for a version of reciprocity that allows it the flexibility to maximize pressure on the broad range of Chinese industrial policy concerns while leaving a clear route to negotiations. The United States should also encourage European and other Western countries, many of which are seeing similar increases in Chinese investment, to adopt this new approach.
Topic:
Diplomacy, International Cooperation, International Trade and Finance, and Foreign Direct Investment
Political Geography:
United States, China, Asia, and North America

74. 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

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

Author:
Wei Wang, Gemma Estrada, Jurgen Conrad, Sang-Hyop 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:
International Trade and Finance, Markets, Political Economy, Reform, and GDP
Political Geography:
China

76. 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

77. The Asian Development Bank and the Asian Infrastructure Investment Bank: Conditional Collaboration?

Author:
Robert M. Orr
Publication Date:
04-2016
Content Type:
Working Paper
Institution:
Council of American Ambassadors
Abstract:
In the past two years, the creation of the Chinese-sponsored Asian Infrastructure Investment Bank (AIIB) has caused considerable attention in many capitals, particularly in Washington and Tokyo. Some view the establishment of the AIIB as a challenge to the supremacy of the post-World War II Bretton Woods order. Others see it as another symbol of shifting regional power in Asia. Some have deep concerns about the AIIB’s willingness to adhere to international safeguards and open procurement.
Topic:
International Trade and Finance
Political Geography:
United States, Japan, China, and Asia-Pacific

78. Framing Sino-Brazilian Energy Cooperation: Perspectives from China

Author:
Cui Shoujun and Otavio Costa Miranda
Publication Date:
12-2016
Content Type:
Journal Article
Journal:
AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:
Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:
With the booming of Brazil’s off-shore oil drilling, the Sino-Brazilian energy cooperation is facing historical opportunities, manifested in the fields of oil trade, market access, technology transfer and bioenergy exploration. To achieve a steady and robust development in bilateral cooperation, China should take a proactive energy diplomacy approach to overcome challenges arise from its increasing engagement.
Topic:
Energy Policy, International Trade and Finance, Oil, Science and Technology, and Natural Resources
Political Geography:
China, Asia, Brazil, and South America

79. Impact of China Slowdown on India

Author:
Geetima Das Krishna and Ankit Bhardwaj
Publication Date:
02-2016
Content Type:
Working Paper
Institution:
Centre for Policy Research, India
Abstract:
After three decades of double-digit growth, China is slowing as it is rebalancing its economy from export-driven to less-volatile domestic consumption driven economy. The paper looks at the impact of China slowdown on India through different channels. Even though India is usurping China as the fastest growing major economy in the world, Indian economy being a fifth of the Chinese economy and also less material intensive can hardly substitute for China as a global growth driver. China has emerged as the largest trading partner of India but India’s trade still remains less vulnerable to Chinese slowdown directly as India’s services exports account for as much as 50% of India’s overall exports (merchandise and services). On the other hand, China’s total FDI investment in India has been miniscule $1.2 billion till September 2015 and India’s infrastructure sector, with its massive investment needs, can be the natural destination for Chinese investments. India reaped the indirect benefit of lower commodity prices in terms of narrower CAD, softening inflation, lower interest rate, increased government fiscal bonanza, all of which contributed to greater macro-stability in India. It was also found that a 50bps decline in China’s growth rate is likely to lower India’s growth by 30bp in the short run.
Topic:
International Trade and Finance, Bilateral Relations, Economy, Economic growth, and Regional Integration
Political Geography:
China, South Asia, India, and Asia

80. The Blind Men and the Elephant: Making Sense of China's One Belt One Road Initiative

Author:
Nimmi Kurian
Publication Date:
12-2016
Content Type:
Special Report
Institution:
Centre for Policy Research, India
Abstract:
China’s One Belt One Road Initiative has virtually been a lightning rod for divisive debate and a polarised narrative since it was announced in 2013. For India, it has been the proverbial elephant in the room, as it awkwardly swings between willful pretence and wishful erasure. The policy brief looks at the clues this initiative could offer on the likely drivers of China’s economic diplomacy in the region. There could be three signals for India to watch out for. A clear pointer is the growing role of domestic determinants in setting the direction and pace of China’s regional economic engagement. Another pointer could be China’s role in shaping and defining Asia’s new institutional financial architecture. Lastly, the initiative could be a signal of how China is likely to engage with the larger questions of benefit sharing, trade-offs and the allocation of risks and burdens in subregional Asia.
Topic:
Diplomacy, International Trade and Finance, Regional Cooperation, Infrastructure, Economic growth, and Soft Power
Political Geography:
China, South Asia, India, and Asia