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41. Financial Development in Hong Kong and China: A Hayekian Perspective

Author:
Kam Hon Chu
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
In addition to foreign investment absorption, Hong Kong plays a pioneering role in the internationalization of the renminbi (RMB). Despite the lack of comprehensive statistics on the volume of offshore RMB transactions, Hong Kong is for sure one of the largest, if not the largest, global centers for offshore RMB businesses. According to the Triennial Central Bank Survey (BIS 2019), for instance, Hong Kong was the largest global offshore RMB foreign exchange market, with an average daily turnover of US$107.6 billion as of April 2019, considerably higher than the US$56.7 billion for London and the US$42.6 billion for Singapore.
Topic:
Economics, Markets, Investment, and Financial Development
Political Geography:
China, Asia, and Hong Kong

42. US, Japan, and South Korea Coordination Key to Competing in Southeast Asia

Author:
Karl Friedhoff and Lea Chang
Publication Date:
06-2021
Content Type:
Special Report
Institution:
Chicago Council on Global Affairs
Abstract:
In picking fronts that offer the paths of least resistance, trilateral cooperation will maximize the presence of all three countries in ASEAN, maintaining balance in the region and making collective progress toward economic and development goals. Despite its size, economic dynamism, and geographic position, Southeast Asia has received comparatively little attention in US foreign policy. Even as American policy becomes more focused on China, the United States lacks a coordinated strategy to respond to and compete with China’s vast trade and investment in Southeast Asia. But most ASEAN countries are wary of China’s growing influence and would be open to US involvement as they look to diversify. To take advantage of this opportunity, the United States must supplement its focus on the South China Sea with diplomatic and financial efforts on land. These efforts should offer an alternative to China’s largesse but should not seek a direct competition in hard infrastructure or in terms of dollar amounts invested. Nor should the United States go it alone. Instead, it should seek to cooperate with its allies—Japan and South Korea in particular—to pursue their respective competitive advantages. These include identifying and investing in small- and medium-sized enterprises in ASEAN, developing human capital in the region, and conducting joint maritime cleanup activities in coordination with ASEAN countries. Creating coordinated activities with Japan and South Korea in Southeast Asia should be the first step for the United States to roll back China’s influence in the region. But these efforts will need to be calibrated to ensure that they focus on the needs of countries in the region and not just engulf the region in the US-China competition.
Topic:
Security, Foreign Policy, Defense Policy, Infrastructure, Investment, and Trade
Political Geography:
Japan, China, Asia, North America, Southeast Asia, and United States of America

43. Decade of patience: How China became a power in the Western Balkans

Author:
Vladimir Shopov
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
China has become the most prominent third actor in the Western Balkans. The country’s activities are spread unevenly across the region, but they follow a common approach. This approach is marked by China’s wide-ranging efforts to establish itself in key economic areas and to gradually position itself as an indispensable actor. China is slowly transforming its interactions with Western Balkans countries in sectors such as culture, media, and politics into long-term and institutionalised relationships. As European and US ambivalence towards the Western Balkans persists, the region will be in increasing danger of falling into an endless spiral of competition between various foreign actors. Western policymakers should address the widening developmental gap between the region and the EU through initiatives such as targeted investment plans in energy and infrastructure, sectoral integration frameworks, and the frontloading of EU law in the accession process.
Topic:
Foreign Policy, Infrastructure, European Union, and Investment
Political Geography:
China, Europe, Eastern Europe, Balkans, and United States of America

44. How China Regards its Future in the World

Author:
Marcos Caramuru and Philip Yang
Publication Date:
04-2021
Content Type:
Special Report
Institution:
Brazilian Center for International Relations (CEBRI)
Abstract:
China’s post-Covid plans regarding national investment and foreign policy are ambitious and its success depends on the ability to build trustworthy relations with its Asian neighbors and the great powers. The XXII China Analysis Group meeting gathered experts to discuss China’s positioning and the ways in which it could overcome challenges and aim for a positive bilateral agenda with the USA during the Biden administration.
Topic:
International Relations, Foreign Policy, Bilateral Relations, Investment, and COVID-19
Political Geography:
China, Asia, and United States of America

45. What Railway Deals Taught Chinese and Brazilians in the Amazon

Author:
Adriana Erthal Abdenur, Maiara Folly, and Maurício Santoro
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Over the past decade, Chinese investments in Brazil have expanded and diversified considerably, especially ones involving infrastructure. Chinese investors have also diversified geographically. Increasingly, major Brazilian infrastructure projects are being planned or implemented with Chinese backing in environmentally sensitive regions such as the Amazon rain forest and the Cerrado, a large savanna region in Central-West Brazil. Chinese actors have become directly involved in such projects against a backdrop of sharpening debates about sustainability and other consequences of large-scale infrastructure projects. This is especially true in protected areas such as land populated by Indigenous groups and conservation units. A notable example is the Ferrogrão project, a major railway line designed to cross sections of the Amazon and Cerrado to deliver goods to Brazilian ports. This paper examines the diverse ways that Brazilian and Chinese actors have learned from each other as they negotiate the terms of these deals. It also explores how these learning processes have been conditioned by intense domestic political debates over these projects in Brazil. Official documents and secondary sources reveal that, rather than a set Chinese way of doing business or a stock Brazilian response, such projects entail dynamic institutional learning. Such learning is shaped not only by the particulars of the Ferrogrão project but also by Chinese actors’ broader engagement with Brazilian infrastructure projects over the past ten years.
Topic:
Environment, Infrastructure, Investment, and Sustainability
Political Geography:
China, Asia, Brazil, South America, and Amazon Basin

46. How Argentina Pushed Chinese Investors to Help Revitalize Its Energy Grid

Author:
Juliana González Jáuregui
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
China’s modernization strategy integrates both domestic and foreign policy, especially through two complementary prongs—the so-called Going Global strategy and the Belt and Road Initiative (BRI). This push to internationalize China’s development strategy has ushered in a new era in Beijing’s relationships with countries and regions around the world. In Latin America, these policies have triggered a dynamic pattern of interactions between China and the region’s political economy. Being rich in fuels, energy, foodstuffs, and basic products, countries in Latin America have emerged as significant suppliers for China, but they also have become important destinations for Chinese-made industrial products, and, subsequently, Chinese investment and lending. For Latin American countries, China’s rise as an influential investor, lender, trader, and builder has created an array of new challenges and opportunities. While Beijing has harnessed its engagement in Latin America to support its own development, countries in the region have sought to direct some of China’s economic and financial resources to promote their own strategic sectors. Argentina illustrates this dynamic well, particularly in the energy sector. Argentinian government officials and business leaders have attracted Chinese investment and finance into renewables and other types of energy to promote Buenos Aires’s goals of taking a hybrid path to an energy transition. For its part, China has seized this opportunity to advance its own development goals and to participate in Argentina’s energy transition strategy. Though Argentina has not yet formally joined the BRI, Argentinian officials have reported publicly that Buenos Aires has already decided to endorse the initiative and is waiting for the right moment to do so.1 Argentina has been weighing the pros and cons of signing on to the BRI. On the one hand, signing on could enhance the presence of Chinese actors in the Argentinian renewables sector, as China seeks to intertwine its engagement in Latin America with the deployment of the Green BRI, the dimensions of the initiative that are framed in terms of environmental sustainability. More broadly, joining the BRI could attract new Chinese investment and finance in alternative energy and electricity transmission infrastructure, further contributing to Argentina’s goals for an energy transition. On the other hand, Argentina faces the challenge of designing and implementing a long-term national energy plan that complements its role in the BRI. This means devising an energy plan that, among broader objectives, seeks to help Argentina harness Chinese know-how on renewables and develop innovation and technological capacities of its own. In the meantime, Argentina’s lack of committed engagement with the BRI to date has not impeded the expansion of Chinese overseas investment and financing for renewables and other types of energy projects in the country. In a clear sign of political agency, the diplomatic outreach of key Argentinian national and provincial government officials, as well as corporate players’ push for local associations, has been central in the quest to increase Chinese engagement in Argentina’s solar and wind power sectors and in other alternative energy projects. These interactions have allowed Argentinian policymakers to help shape an adaptive partnership to strengthen the alignment between Chinese investments and Argentinian development objectives. Admittedly, this engagement has at times encountered resistance due to environmental and social risks in certain localities. Even so, these concerns are part of the learning process and set a tone for future cooperation on energy projects. Renewables and alternative energy will continue to be a magnet for global investment as countries around the world strive to address climate change. Thus, local tensions are pushing both Argentinian and Chinese actors to learn from the problematic impacts of some projects and do more to address local communities’ concerns jointly. Successful responses to such concerns would further enhance the basis of Argentina and China’s energy-focused adaptative partnership.
Topic:
Infrastructure, Economy, Business, Investment, and Energy
Political Geography:
China, Asia, Argentina, and South America

47. The policy of the People’s Republic of China towards Central and Eastern Europe in 2012-2020

Author:
Adam Kuź
Publication Date:
03-2021
Content Type:
Journal Article
Journal:
Nowa Polityka Wschodnia
Institution:
Faculty of Political Science and International Studies, Nicolaus Copernicus University in Toruń
Abstract:
In the second decade of the 21st century, the Middle Kingdom, which had huge financial surpluses, became the world’s largest exporter of money capital, which meant that investment policy became the main element of China’s foreign policy. In the case of Central and Eastern Europe, the 16+1 (17+1) format, containing both investment policy and soft power elements, has become the basic tool of the general policy of Middle Kingdom. This article aims to define the basic principles of China’s policy towards Central and Eastern Europe. For this purpose, the following general hypothesis was formulated: Chinese policy in Central and Eastern Europe consists of presenting the countries of this region with initiatives that do not go beyond the sphere of declarations and serve as a bargaining chip in relations with Germany, the country with the greatest potential in the European Union. The general hypothesis gives rise to detailed hypotheses that were verified in individual parts of the article with the use of the comparative method. The reasons most often mentioned in the literature on the subject, such as economic, cultural, social, and political differentiation of Central and Eastern European countries, legal barriers resulting from EU legislation, insufficient recognition of the region’s needs by the Chinese side and asymmetry of expectations of both parties, undoubtedly largely contribute to the lack of effective Sino-CEE cooperation. However, they cannot be considered decisive because similar problems occur wherever Chinese companies appear. However, in many regions of the world, despite these obstacles, mutual economic relations are more dynamic than in CEE. The reasons why the potential of the 16+1 (17+1) format has not been properly used can be found primarily in the context of German-Chinese relations.
Topic:
International Relations, Foreign Policy, Economy, Investment, and Capital
Political Geography:
China, Eastern Europe, and Central Europe

48. What Does China’s Update of its Anti-Monopoly Law and New Regulations for the “Platform Economy” Mean for Business?

Author:
David Hoffman
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
The Conference Board
Abstract:
The recently enacted revisions to China’s Anti-Monopoly Law, and its extensive provisions for regulating China’s “platform economy” – i.e., fintech and ecommerce platforms – are consequential for foreign investors in China, bearing both upside and downside risks. On the one hand, they reinforce the trend of increasing state intervention in China’s economy and commercial markets and raise concerns about a more confined and controlled play-space for the private sector in China, a cohort which includes foreign multinational companies and financial investors.
Topic:
Governance, Law, Economy, Business, Investment, Monopoly, Private Sector, and Commerce
Political Geography:
China and Asia

49. The EU–China Comprehensive Agreement on Investment: Lessons Learnt for Indonesia

Author:
Yan Lili Ing and Junianto James Losarili
Publication Date:
08-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The European Union (EU) and China have recently reached an agreement: the EU–China Comprehensive Agreement on Investment (CAI). As one of the most recent investment agreements concluded by the EU, the paper aims to assess specific concessions made in the agreement, and provides lessons learnt for Indonesia on the ongoing negotiations of the Indonesia–EU free trade agreement, the Comprehensive Economic Partnership Agreement (IEU CEPA). The paper will present an overview of the main areas covered under the CAI, assess the potential impacts of the CAI on EU investment into Indonesia, and set out lessons that can be learnt from the CAI.
Topic:
Economics, International Cooperation, International Trade and Finance, European Union, and Investment
Political Geography:
China, Europe, Indonesia, and Asia

50. Why Canada Must Embrace a Free and Open Indo-Pacific

Author:
Jonathan Berkshire Miller and Stephen Nagy
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
Japan Institute Of International Affairs (JIIA)
Abstract:
How has Canada viewed the scope of its engagement in Asia? The traditional lens to look at such engagement has been through the Asia-Pacific framing – defining the region largely through our experience in the multilateral architecture such as the Asia Pacific Economic Cooperation (APEC) on the trade side, and the Association of Southeast Asian Nations (ASEAN) Regional Forum (ARF) on the political-security side. Canada was a founding member of APEC in 1990 and has been a dialogue partner in the ARF since its formation in 1994. Aside from these two main vehicles, Canada has been active in the international development space over the years through and is member of the Asian Development Bank, and more recently joined – while not before considerable internal debate – the Chinese-led Asian Infrastructure Investment Bank in 2017.
Topic:
Bilateral Relations, International Development, Multilateralism, Investment, Trade, and ASEAN
Political Geography:
Japan, China, Canada, Asia, North America, Korea, and Indo-Pacific