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4981. Globalization and the Urban Poor in China

Author:
Guanghua Wan and Yin Zhang
Publication Date:
04-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the distributional impact of globalization on the poor in urban China. Employing the kernel density estimation technique, we recovered from irregularly grouped household survey data the income distribution for 29 Chinese provinces for 1988-2001. Panels of the income shares of the poorest 20, 10 and 5 per cent of the urban residents were then compiled. In a fixed-effect model, two of the central conclusions of Dollar and Kraay (2002)—that 'the incomes of the poor rise equi-proportionately with average income' and that trade openness has little distributional effect on poverty—were revisited. Our results lend little support to either of the Dollar-Kraay conclusions, but instead indicate that average income growth is associated with worsening income distribution while globalization in general, and trade openness in particular, raises the income shares of the poor. It is also found that openness to trade and openness to FDI have differential distributional effects. The beneficial effect of trade was not restricted to the coastal provinces only, but also weakened significantly after 1992. These findings are robust to allow for nonlinearity in the effect of globalization and to control for the influence of several other variables.
Topic:
Economics, Globalization, and Poverty
Political Geography:
China and Asia

4982. International Finance and the Developing World: The Next Twenty Years

Author:
Tony Addison
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Much has changed in international finance in the twenty years since UNU-WIDER was founded. This paper identifies five broad contours of what we might expect in the next twenty years: the flow of capital from ageing societies to the more youthful economies of the South; the growth in the financial services industry in emerging economies and the consequences for their capital flows; the current strength in emerging market debt, and whether this represents a change in fundamentals or merely the effect of low global interest rates; the impact of globalization in goods markets in lowering inflation expectations, and therefore global bond yields; and the implications of the adjustment in global imbalances between Asia (in particular China) and the United States for emerging bond markets as a whole. The paper ends by noting the paradox that today we see ever larger amounts of capital flowing across the globe in search of superior investment returns, and yet the financing needs of the poorer countries are still largely unmet.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
United States, China, and Asia

4983. China and Iran: Mismatched Partners

Author:
John Calabrese
Publication Date:
08-2006
Content Type:
Working Paper
Institution:
The Jamestown Foundation
Abstract:
China and Iran are important geopolitical actors as well as major players in the global energy market. In recent years, the Sino-Iranian relationship has broadened and deepened. Energy cooperation is the main axis around which this partnership revolves. As a result, China is a stakeholder in the outcome of the diplomatic crisis that has been brewing over the Iranian nuclear program. The relationship between China and Iran deserves careful scrutiny, not the least because their strategic motivations remain ambiguous and their dealings with each other lack transparency.
Topic:
Security and Energy Policy
Political Geography:
China and Iran

4984. The Korean War June-October 1950: Inchon and Stalin in the "Trigger vs. Justification"; Debate

Author:
Tan Kwoh Jack
Publication Date:
01-2006
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
China's decision to enter the Korean War in 1950 is a historical puzzle: why would China, a much weaker country, enter into a military confrontation with the United States, a superpower? The rationale for Chairman Mao Zedong's intervention in Korea carries strategic lessons for the contemporary crisis on the Korean Peninsula, as well as for Sino-American relations. Utilizing newly declassified Russian documents made available at the Cold War International History Project from 1994- 2004, this paper critically assesses this new evidence concurrently with the existing literature that has emerged so far, and seeks to contribute to the “trigger vs. justification” debate surrounding China'sentry. Three shortcomings of this debate are identified: 1) whether Mao would have intervened had the US military stopped at the 38 th parallel is difficult to determine; 2) Mao' s vacillations up till the very last minute cast doubt on the justification argument i.e. offensive intervention driven by revolutionary ideology and politics; and 3) as a result, this ignores the complex dimensions of decision-making and interaction between Stalin and the Chinese leadership, as well as within the Chinese leadership itself. This paper argues that one significant variable overlooked heretofore is the American landings at Inchon on 19 September 1950. This is followed by in-depth analyses of the following three main interactions that Inchon engendered – 1) the policy shifts within the Truman administration; 2) the Stalin-Mao manoeuvres; and 3) the debates and dilemmas within the Chinese Politburo. This paper concludes that it was Inchon, along with additional pressure from Stalin, and not the crossing of the 38 th parallel, that triggered China's eventual entry into Korea.
Topic:
Security and War
Political Geography:
China and Asia

4985. Environmental Management and Conflict in Southeast Asia – Land Reclamation and its Political Impact

Author:
Kog Yue-Choong
Publication Date:
01-2006
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
Land-scarce Singapore has no choice but to carry out massive reclamation to cope with its population growth and economic development. The ability for Singapore to continue to carry out its reclamation to enlarge its territory is tied to its survival as a competitive economy. Land reclamation works have been carried out in Singapore since the late 19th century when Singapore was a British colony. After Singapore was separated from Malaysia in 1965, massive land reclamation has been ongoing almost non-stop since then without giving rise to any dispute with its neighbours. Dredged sea sand has been used for reclamation in Singapore long ago, initially the sea sand come from seabed within Singapore's territory and later from Malaysia and Indonesia. But for the first time in 2002, such reclamation works have figured in volatile ties between Singapore and Malaysia when Malaysia protested vehemently about the trans-boundary environmental impact of Singapore's reclamation works. At the same time, Indonesian leaders imposed an export ban of sea sand from Indonesia to Singapore because they felt that sea sand was being shipped to enlarge Singapore's territory at environmental costs that surpassed the economic benefits from selling the sand. This paper will review the reclamation efforts by Singapore and the perceived threat that it poses to neighbouring countries including Malaysia and Indonesia in the context of the concerns over environmental degradation, territorial rights and the tensions engendered in the relations among these countries. This paper will argue that the dispute between Singapore and Malaysia as well as Singapore and Indonesia should not be securitised. Instead, such non-traditional security issues should be viewed as 'desecuritised'. This need is particularly acute in this uncertain time because of the threats of terrorism and the challenge of escalation in economic rivalry brought about by globalisation and the opening of China and India.
Topic:
Conflict Resolution, Environment, and Politics
Political Geography:
China, Indonesia, Malaysia, India, Singapore, and Southeast Asia

4986. China: The Balance Sheet - Issue Snapshots

Publication Date:
04-2006
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
American strategy can—and must—respond to China's rise in a way that assures regional security, realizes the greatest possible economic benefit, averts worst-case outcomes from China's remarkable social transformation, and increasingly integrates the country as a partner—or at least not an active opponent—in achieving a prosperous and stable world order for future generations. All this can be done—if the United States asks the right questions, understands China's complexities, and reinforces America's strengths. China: The Balance Sheet, a joint publication by the Center for Strategic and International Studies and the Institute for International Economics, provides the foundation for an informed and effective response to the China challenge in four critical areas.
Topic:
International Relations, Security, and Economics
Political Geography:
United States, China, America, and Asia

4987. Struggle for the Future - The Poison of Populism and Democracy's Cure

Author:
Robert F. Noreiga
Publication Date:
12-2006
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
While the world's attention is focused on a struggling Iraq and a rising China, a battle for the heart and soul of the Americas is being waged closer to home. A simplistic account might describe this confrontation as a tug of war between U.S. president George W. Bush's vision and that of his self-appointed nemesis, Venezuelan president Hugo Chávez. Equally misleading are characterizations that describe the showdown as one between left and right, rich and poor, north and south. But this is not a battle between two powerful leaders or between ideologies of the left and right. The contest being waged in the Western Hemisphere is about democracy itself: can it deliver the goods for impatient publics? On one side are leaders from the left and right who see democratic institutions and the rule of law as indispensable to prosperity and liberty. On the other are those who treat democracy as an inconvenience and see free markets as a threat.
Topic:
Democratization, Development, and Politics
Political Geography:
China and Asia

4988. China Needs to Float the Yuan--for China's Sake

Author:
John H. Makin
Publication Date:
05-2006
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
In their April 21 press release following their spring meeting in Washington, D.C., the G7 finance ministers and central bank governors added an important sentence to their usual bland statement that exchange rates should reflect economic fundamentals: Greater exchange rate flexibility is desirable in emerging economies with large current account surpluses, especially China, for necessary adjustments to occur. In their April 21 press release following their spring meeting in Washington, D.C., the G7 finance ministers and central bank governors added an important sentence to their usual bland statement that exchange rates should reflect economic fundamentals: Greater exchange rate flexibility is desirable in emerging economies with large current account surpluses, especially China, for necessary adjustments to occur. The G7, significantly, also called for an increased role for the International Monetary Fund (IMF) to help countries, including those in the G7 but also China and others in emerging Asia, meet the macroeconomic and financial policy challenge of globalization. Specifically, the G7 supported the strengthening of IMF surveillance, including through increased emphasis on the consistency of exchange rate policies with domestic policies and a market-based international monetary system and on the spillover effects of domestic policies on other countries. The G7s endorsement of greater exchange-rate flexibility and of an enhanced IMF role in implementing it is important. The IMF, having been founded after World War II to maintain stable exchange rates among major economies, has become an advocate on behalf of the major economies of global exchange-rate flexibility. The lesson regarding the need for G7 currency flexibility was learned after Americas August 1971 abandonment of fixed exchange rates, which was followed by a decade of adjustments to higher oil prices that would have wreaked havoc under fixed exchange rates. The lesson for needed currency flexibility in emerging markets was learned after the disastrous attempt, fostered in part by the IMF, to impose fixed exchange rates during the Asian and Russian crises of 1997 and 1998, which prolonged and exacerbated the market gyrations caused by the crises. Sadly, China response to the G7-IMF call for greater currency flexibility has been both negative and misguided. China's foolishly insouciant attitude, captured in a comment by Zhou Xiao-chuan, governor of the Peoples Bank of China, carries with it serious risks both for China and for the world economy. Zhous remark was quoted on April 24 in the Wall Street Journal: [T]he speed of moving forward (on yuan appreciation) is OK. Its good for China and welcomed by many other countries. China's currency has appreciated only 1.2 percent since its initial 2.1 percent revaluation last July 21. That is less than OK. The total 3.3 percent revaluation against the dollar really represents no adjustment at all in view of the 1 to 2 percent inflation differential (lower in China) that has persisted between the United States and China over the past two years. If China had allowed prices to rise instead of mandating caps on prices of important commodities like gasoline, there would be less pressure for the yuan to rise in value. Both the intervention to cap the yuans appreciation and the capping of domestic prices are building up potentially disruptive inflation pressure inside China, as we shall see below. The most dangerous aspect of China's increased efforts to prevent yuan appreciation, as measured by accelerating reserve accumulation over the past year, is the rising pool of liquidity inside China that has resulted. The level of excess reserves in Chinese banks is now larger, relative to GDP, than the level of excess reserves built up in Japan from 2001 to 2005 during the years of a prolonged, desperate struggle against deflation. China's currency undervaluation, coupled with the massive liquidity buildup in its banking system, has resulted in excessive investment in China's state enterprises that have close traditional ties with the liquidity-sodden banks. The usual Chinese response to excess reserves has been to boost reserve requirements for its banks. But to absorb the huge pool of excess reserves now in place, reserve requirements would have to be boosted by 5 percentage points to 12.5 per-cent, going far beyond previous moves of 0.5 to 1 percentage point, and far beyond what China's shaky, insolvent banks could endure. When the Peoples Bank of China boosted its one-year benchmark lending rate on April 26 by 27 basis points (to 5.85 percent), it took a tiny step that will do little to tighten China's monetary stance.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
United States, China, and Washington

4989. The Neo Con: The Bush Defense Record by the Numbers - An Analysis of the Data Behind the Bush Approach to National Security

Author:
Sharon Burke and Harlan Greer
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
Third Way
Abstract:
Like all presidents before him, President George W. Bush came to office promising to keep America safe, strong, secure, and the leader of the world. There are some who believe that the President has kept this promise. Secretary of State Condoleezza Rice and others inside the Bush Administration have continued to maintain that America's national security strategy—and in particular, the strategy in Iraq—has been successful. But there are many who disagree—even leading conservatives. William Kristol, one of the intellectual leaders behind the Bush foreign policy, now regards America's national security situation as dire. Several retired senior military officers have leveled a barrage of criticism at Bush, with calls for the firing of Defense Secretary Donald Rumsfeld, breaking a tradition among retired military against publicly criticizing the commander-in-chief.
Topic:
Foreign Policy and Defense Policy
Political Geography:
Afghanistan, China, Iraq, America, Iran, and North Korea

4990. U.S.-China Relations: The Case for Economic Liberalism

Author:
James A. Dorn
Publication Date:
10-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
In its 2005 Report to Congress, the U.S.-China Economic and Security Review Commission—also known as the U.S.-China Commission (USCC)—recommended that China appreciate its currency, the renminbi (RMB), “by at least 25 percent against the U.S. dollar” or face “an immediate, across-the-board tariff on Chinese imports.” The commission argued that such an action could be justified under Article XXI of the World Trade Organization (WTO), “which allows members to take necessary actions to protect their national security.” The key idea behind the commission’s protectionist policy stance is that “China’s undervalued currency has contributed to a loss of U.S. manufacturing, which is a national security concern” (USCC 2005: 14).
Topic:
Bilateral Relations, Economy, Trade, and Liberalism
Political Geography:
China, Asia, North America, and United States of America