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91. Handling "Value" in the US-China Conflict

Author:
Naoko Funatsu
Publication Date:
05-2021
Content Type:
Research Paper
Institution:
Japan Institute Of International Affairs (JIIA)
Abstract:
The escalating confrontation between the United States and China has been one of the most important issues in American foreign policy in recent years. The weight of US foreign policy toward China has increased as China's presence in the international community has grown. This is due to China's remarkable economic growth, and many countries around the world sought to incorporate the booming Chinese economy into the international economy to promote their own economic growth; the United States had been no exception. As globalization and China's economy continued to grow, however, the trade imbalance between the US and China expanded, and the trade deficit with China became an issue in the US. In the US presidential election of November 2016, Republican candidate Donald J. Trump made correcting the trade deficit with China a policy priority and was elected. When the administration took office in January 2017, it was marked by a discourse based on economic nationalism, one of the characteristics of a Trump administration committed to putting "America first".
Topic:
Foreign Policy, Globalization, Bilateral Relations, Economy, and Trade
Political Geography:
China, Asia, North America, and United States of America

92. China’s state-owned enterprises and competitive neutrality

Author:
Alicia Garcia-Herrero
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
As China’s economic weight continues to grow, so does the global impact of its companies. Chinese state-owned enterprises (SOEs) produce a large share of Chinese goods and services. Given their importance both in China and increasingly globally, it should be measured whether SOEs introduce distortions into markets and how significant those distortions are. Foreign governments negotiating trade or investment deals with China need this information so they can better measure how far China is from offering a level playing field to foreign companies on its domestic market. In this context, competitive neutrality is an important working concept that can be used to asses how far a market is from being a competitive environment. The Organisation for Economic Co-operation and Development defines a framework of competitive neutrality as one in which public and private companies face the same set of rules, and no contact with the state gives competitive advantage to any market participant. Quantifying the concept is difficult, but we provide a preliminary measure of the lack of competitive neutrality in relation to Chinese SOEs. In particular, we focus on debt and tax neutrality and compare the situation for Chinese state-owned and private firms on aggregate and sectoral levels. Our results support the view that China’s competitive environment is generally poor. The advantageous position of SOEs in China is true for most economic sectors, though to a variable extent, with the automotive sector one of the furthest away from competitive neutrality. A working measure of competitive neutrality applied in China could help improve the level playing field for foreign companies in China. It could also be applied globally given the very large size and global footprint of Chinese SOEs. The concept could even be introduced in a potential reform of the World Trade Organisation.
Topic:
Business, Trade, Neutrality, and State-Owned Enterprises
Political Geography:
China and Asia

93. U.S. Trade Policy toward China: Learning the Right Lessons

Author:
Scott Lincicome
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Labor market and cultural disruptions in the United States are real and important, as is China’s current and unfortunate turn toward illiberalism and empire. But pretending today that there was a better trade policy choice in 2000—when Congress granted China “permanent normal trade relations” (PNTR) status and paved the way for broader engagement—is misguided. It assumes too much, ignores too much, and demands too much. Worse, it could lead to truly bad governance: increasing U.S. protectionism; forgiving the real and important failures of our policymakers, CEOs, and unions over the last two decades; and preventing a political consensus for real policy solutions. Indeed, that is happening now.
Topic:
International Relations, Economics, Markets, Bilateral Relations, Trade, and Protectionism
Political Geography:
China, Asia, North America, and United States of America

94. ASPI NOTES for the Biden Administration

Author:
Wendy Cutler, Anubhav Gupta, Nathan Levine, Richard Maude, Elina Noor, Jing Qian, Alistair Ritchie, Kevin Rudd, Daniel R. Russel, and Thom Woodroofe
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Asia Society
Abstract:
The Asia Society Policy Institute (ASPI) Notes for the Biden Administration is designed to offer creative and practical ideas for how the United States might re-engage in the Asia Pacific, particularly in the critical first six months of the new administration. The administration will immediately face a range of challenges and opportunities in this important region, including on climate change, public health, and the global economy. President-elect Biden and his team have signaled the need for the United States to lean into and deepen its engagement with friends and allies. This will mean leveraging the Asia Pacific’s multilateral architecture as well as using global forums such as the G20 and international organizations. Trade policy will also figure importantly in any effort to renew and expand America’s engagement. Additionally, the U.S.-China relationship will loom large from the outset. Tensions with China will surely linger, whether in the South China Sea or the Taiwan Strait, complicating the task of establishing a new framework of “managed strategic competition” – a combination of each side's "red lines," continued competition, plus agreement on areas of mutually beneficial cooperation. ASPI Notes for the Biden Administration provides a diverse package of 20 actionable proposals to address specific risks or objectives in reconnecting with the Asia Pacific. These notes carefully reflect the views, perspectives, and expectations of the region itself – a hallmark of ASPI’s approach.
Topic:
Foreign Policy, Climate Change, Economy, Trade, Public Health, and Joe Biden
Political Geography:
China, Taiwan, Asia, Asia-Pacific, and United States of America

95. The Effects of US-China Rivalry on Latin America and Their Implications

Author:
Sungwoo Hong, Yeo Joon Yoon, Jino Kim, Jeewoon Rim, and Jimin Nam
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The conflict between the United States and China may be the issue of most importance as well as interest to the world, prior to COVID-19. This conflict between the two countries is appearing not only in the economic sector, but also in various field such as politics, diplomacy, and military affairs. Such competition between the two countries is likely to escalate further as multilateral systems such as the WTO are threatened and protectionism intensifies in the post-COVID-19 world. Even within Latin America, the competition between the two countries frequently appears in a variety of forms. Conflicts between the United States and China in Latin America tend to occur mainly in the infrastructure sectors. Furthermore, the United States pressured Latin American countries to choose between the United States and China, with the results of this pressure depending on the political orientation of the ruling government. In order to investigate the impact of retaliatory tariffs between the two countries on Latin American countries’ exports and welfare, we employ an event analysis for exports and computational general equilibrium (CGE) model for welfare, with Argentina, Brazil, Mexico, and Chile as the subject of our analysis. Based on the outcome of the event study, Brazil’s exports to the United States moderately increased due to the tariff imposition, and such an effect persisted for short term. Its exports to China rose considerably immediately after the tariff imposition, and then the impact tended to decrease over time. By contrast, it is difficult to conclude that the tariff imposition had a statistically significant and lasting effect on the exports of the remaining three countries to the United States and China. As a result of the analysis using the CGE model, meanwhile, the tariffs imposed between the United States and China trivially increased the welfare of Latin American countries.
Topic:
Foreign Policy, Economy, Tariffs, Exports, Trade, and Rivalry
Political Geography:
China, Asia, South America, Latin America, Korea, and United States of America

96. No, China Does Not Make Everything!

Author:
David Henig and Anna Guildea
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
China is now the world’s leading manufacturer, with goods exports rising from $63 billion in 1990 to $2.5 trillion in 2018. The popular assumption is that everything is now made in China, and that falling manufacturing employment in the EU and US is due to this. The assumption is wrong. China is the world’s largest goods exporter, but other countries have also experienced increases. One reason is that China is also the world’s second largest importer of goods, at $2.1 trillion in 2018.
Topic:
International Political Economy, Exports, Manufacturing, and Trade
Political Geography:
China

97. 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

98. 2021 Chicago Council Survey: A Foreign Policy for the Middle Class—What Americans Think

Author:
Dina Smeltz, Ivo H. Daalder, Karl Friedhoff, Craig Kafura, and Emily Sullivan
Publication Date:
10-2021
Content Type:
Special Report
Institution:
Chicago Council on Global Affairs
Abstract:
While the Biden administration seems to understand where Americans stand on China and domestic renewal to support global competitiveness, the data disproves their assumptions that Americans are skeptical about trade and weary of US global engagement and leadership.
Topic:
Foreign Policy, Politics, Public Opinion, Trade, and Survey
Political Geography:
China, North America, and United States of America

99. Built to order: How Europe can rebuild multilateralism after covid-19

Author:
Anthony Dworkin
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
The pandemic has brought forward a new agenda for multilateralism, focused on areas including global health, economic recovery, climate, technology, and trade. In trying to promote global cooperation, the EU must take account of competition with China and other illiberal powers across these areas. The EU should pursue a twin-track strategy, seeking to revitalise institutions that include rival powers while promoting deeper cooperation with like-minded countries. Europe should launch an initiative to build up global vaccine manufacturing and encourage the free movement of medical goods, and set up a ‘preparedness club’ of countries committed to transparency in their health systems. The EU should look for ways to coordinate with China on climate and global debt, while focusing on work with its liberal partners on technology and human rights.
Topic:
European Union, Multilateralism, Trade, Vaccine, COVID-19, and Global Health
Political Geography:
China and Europe

100. The evolution of US strategic priorities

Author:
Carl Bildt
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
The Biden administration’s Interim National Security Strategic Guidance reflects an evolution in US strategic thinking and policy priorities. The document shows how the administration intends to shift away from America Alone and towards America and its Allies. But the optimism and confidence the US expressed in 2015 has been replaced by deep concern over a range of strategic trends. The US will now prioritise strategic competition with China, a new approach to trade, the rise of technology, the defence of democracy, the urgent climate and health crises, and efforts to avoid ‘forever wars’ in the Middle East.
Topic:
Climate Change, Health, Science and Technology, Democracy, and Trade
Political Geography:
China, Middle East, North America, and United States of America