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1. The Russia Factor in China’s Relations with the West

Author:
Klaus W. Larres and Lea Thome
Publication Date:
04-2024
Content Type:
Journal Article
Journal:
Baku Dialogues
Institution:
ADA University
Abstract:
Tension between China and the Western world has been a characteristic of global affairs for the better part of the last decade. Notwithstanding Russia’s full-scale invasion of Ukraine in February 2022, the United States continues to view China as its greatest global rival and competitor. In fact, many policymakers in Washington (though by no means all of them) view China as an existential threat to America’s global influence and predominance. As the European Union and its 27 member states are not among the world’s superpowers, the Europeans have a somewhat more relaxed attitude toward China. Still, according to an important policy statement issued by the EU Commission in 2019, Brussels has come to see Beijing not only as a “partner and competitor” but also as a serious “systemic rival.” This refers less to geopolitical concerns but very much to global governance issues and geoeconomic, trade, and investment relations with China. The EU is deeply concerned about the continuing lack of reciprocity of market access, intellectual property theft, and China’s frequently state-subsidized competition regarding cutting-edge technology products, including solar panels, EV vehicles, and many other products, which may soon swamp the EU market. The EU Commission has launched an investigation into China’s production of EV vehicles and also Beijing’s shipbuilding industry, which it suspects may well work on the basis of rather unfair and highly subsidized support from the Chinese state.
Topic:
Foreign Policy, Markets, Geopolitics, Economy, Strategic Competition, and Production
Political Geography:
China, Europe, Asia, and United States of America

2. Essential but Invisible and Exploited: A literature review of migrant workers’ experiences in European agriculture

Author:
Carlos Ruiz-Ramírez, Juan Castillo-Rojas-Marcos, and Yoan Molinero-Gerbeau
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Oxfam Publishing
Abstract:
This report – derived from work implemented by Oxfam Intermón and the University Institute for Studies on Migration (IUEM) of Comillas University in the EU SafeHabitus project – is based on a review of academic and non-academic literature from the past five years. It assesses research on working, living, health and transport conditions for migrants working in the agri-food sector in Europe, and cross-cutting gender issues.
Topic:
Agriculture, Food, European Union, Migrant Workers, Supply Chains, Equity, Production, and Gender
Political Geography:
Europe

3. The Granular Trade and Production Activities (GRANTPA) Database

Author:
Sebastien Bradley, Javier Flórez Mendoza, Mario Larch, and Yoto V. Yotov
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper introduces the Granular Trade and Production Activities (GRANTPA) database, which covers international trade flows for 3,124 products and 247 countries over the period 1995-2019 as well as domestic trade flows and production data for the same number of products and years for a subset of 35 European economies. The original data sources that we employ are Eurostat’s Comext and Prodcom databases. A gravity application delivers a large set of product-level ‘home bias’ estimates, which cannot be obtained without domestic trade flows. The average estimates on the standard gravity variables in our model (e.g., distance) are comparable to those from the related literature. However, our disaggregated estimates are very heterogeneous across products, thus highlighting the importance of our new database.
Topic:
International Trade and Finance, European Union, Trade, Production, Gravity Data, Structural Gravity, Home Bias Estimates, and Disaggregated Gravity Estimates
Political Geography:
United Kingdom, Europe, Turkey, Norway, Serbia, Iceland, Montenegro, and North Macedonia

4. Alabuga’s Greatly Expanded Production Rate of Shahed 136 Drones

Author:
David Albright, Igor Anokhin, Sarah Burkhard, Victoria Cheng, and Spencer Faragasso
Publication Date:
05-2024
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
Over the last two years, Russia has launched thousands of Shahed 136 drones against Ukraine. Although most of these relatively noisy, slow-moving drones have been shot down, about 15 percent on average have gotten through, causing immense damage to Ukraine’s military and civilian infrastructure. The Russian manufacturer of these drones, JSC Alabuga, contracted with Iran in early 2023 in a $1.75 billion dollar franchise deal to supply 6000 of the drones to the Russian Army by September 2025 in a three-stage arrangement, shown in Figure 1. While there were initial delays and skepticism about Alabuga being able to supply 6000 drones, data on Russian launches of Shahed drones collected by the Ukrainian military indicate that Alabuga is ahead in its production schedule and has already supplied approximately 4500 of the promised 6000 drones as of late April 2024. Based on these data, Alabuga has almost tripled its average production rate recently. It has, for the last several months produced Shahed drones at an average rate of about 20 drones per workday, equivalent to two shifts per day at the production facility, compared to a contract amount for 2023 of about 7 drones per workday followed by 10 drones per day. At this new rate, about 5200 drones per year, Alabuga could fulfill its commitment of supplying 6000 drones a year early, by mid-August 2024, and it could supply an additional 5400 drones by September 2025.
Topic:
Weapons, Drones, Production, and Russia-Ukraine War
Political Geography:
Russia, Europe, Iran, and Ukraine

5. Analysing the German construction industry’s supply chains

Author:
Johanna Neuhoff, Hannah Zick, and Andy Logan
Publication Date:
12-2023
Content Type:
Special Report
Institution:
Oxford Economics
Abstract:
The supply chain disruptions triggered by the coronavirus pandemic, the blockade of the Suez Canal, and Russia’s invasion of Ukraine were historically unique for Germany’s construction sector. Our research showed how these supply chain disruptions affected construction companies in various ways and identified strategies to help overcome them. The dominant effects were higher purchase prices, longer waiting times, and increased resources devoted towards planning. These longer waiting times meant greater difficulties in processing existing orders and a consequent need to forego new orders, which in turn led to a loss of turnover. Our research also found its supply chain was more globally intertwined than previously understood: the sector generates 40% of gross value added via imported services. Thirteen of the 57 imported intermediate inputs were found to be highly vulnerable. Other industry-specific characteristics include a high level of manufacturing complexity, which leads to a large number of required products. Meanwhile warehousing is often difficult, meaning supply chain interruptions have a direct impact on production capacity. Our recommendations to the Federal Institute for Research on Building, Urban Affairs, and Spatial Development were that companies should: Control their supply chains as completely as possible with digital technologies —from procurement and logistics to delivery to the construction site; Use digitalisation to detect disruptions at an earlier stage and react to them; Secure greater supply of raw materials through domestic production; Replace fossil energy sources with renewable energies; Select their suppliers in a diversified manner as far as possible; and Promote innovation for new future technologies.
Topic:
Manufacturing, Renewable Energy, Fossil Fuels, COVID-19, Logistics, Supply Chains, Production, Construction, Russia-Ukraine War, Digital Technologies, and Warehousing
Political Geography:
Europe and Germany

6. The Anti-Circumvention Instrument: Another Roadblock on the Investment Development Path?

Author:
Weihuan Zhou and Victor Crochet
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Companies from emerging economies, and China in particular, have started internationalizing their production operations. In doing so, they are following the same path as that taken by American, European and East Asian corporations before them, by setting up factories in third countries to serve their export markets from closer locations and produce more efficiently. Thus, it is no longer only developed countries’ multinationals which are moving their operations to developing countries, but emerging market companies that are increasingly engaging in production abroad. This phenomenon is having beneficial effects in countries where these companies invest and might help them start their own industrialization process. Yet, it has attracted the ire of developed countries, in particular the European Union. They are now targeting these downstream production plants abroad by using the so-called anti-circumvention instrument, resulting in trade defence duties imposed on the parent companies being extended to their foreign subsidiaries. This application of the anti-circumvention instrument departs from its historic rationale and might hinder the development of countries in need of foreign investment. Therefore, affected governments should consider taking international legal action to bring developed countries to the negotiating table to put a halt to this abuse of the anti-circumvention instrument.
Topic:
Development, Industrial Policy, Investment, Trade, Internationalization, Production, Emerging Economies, and Anti-Circumvention Instrument
Political Geography:
China, Europe, Global Focus, and United States of America

7. Cooperation against the odds: Getting small firms to work together in unfavourable circumstances

Author:
Kira Gartzou-Katsouyanni
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
How can we get small firms to work together in order to achieve mutually beneficial outcomes, despite adverse circumstances? This policy paper provides an answer to this question that could be useful both to policymakers and to local stakeholders seeking to undertake innovative, cooperative economic activities in their area. Based on evidence from eight case studies within the Greek agri-food and tourism sectors, I argue that a small group of local actors, whom I call ‘institutional entrepreneurs’, usually play a key role in catalysing the emergence of cooperation at the local level. Their strategies and experiences carry valuable insights. I also outline the characteristics that macro-level institutional frameworks need to have if they are to facilitate local cooperation. These characteristics can inform the design of institutions at both the domestic and the EU level. The paper’s findings could be relevant to people interested in local development, but also to those concerned with boosting the productivity and export orientation of the Greek economy as a whole. After all, cooperation can improve the performance of small firms, and it is thus an important ingredient for inclusive growth in countries with a lot of small firms, such as Greece.
Topic:
Development, Economy, Business, and Production
Political Geography:
Europe and Greece

8. Prosperity and Resilience: Diverse Production and Comparative Advantage in Modern Economies

Author:
David Henig and Anna Guildea
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
A common version of trade theory suggests that countries will specialise in a limited number of products. Using the example of David Ricardo from 1817, England specialises in cloth and Portugal in producing wine – and then they trade with each other to mutual benefit. However, this is a crude version of comparative advantage that routinely leads to political concerns about trade. Today the prime concern is that Europe and other developed countries have become too dependent on China by allowing the logic of comparative advantage to work. In short, trade has made us vulnerable. The observed reality is different. Most advanced economies produce and export a broad range of goods and services. Their governments have similar aspirations to develop and support diverse manufacturing and services, including in the most traded global sectors such as pharmaceuticals, automotive, business services, and food and drink. Modern specialisation comes in countries producing various, but not all, products within global supply chains. Patterns of trade suggest such specialisation has allowed countries to both grow and become resilient to individual shocks. Knowledge and ownership of the whole supply chain is more important than producing everything.
Topic:
Globalization, Economy, Services, Resilience, WTO, and Production
Political Geography:
Europe and Global Focus

9. Production and Trade of ICT from an EU Perspective

Author:
Amat Adarov, Dimitrios Exadaktylos, Mahdi Ghodsi, Robert Stehrer, and Roman Stöllinger
Publication Date:
10-2021
Content Type:
Special Report
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
The competitiveness of industries and countries is shaped more and more by technological advancement in the production and use of information and communications technology (ICT). This report considers the supply side of ICT goods and services. It studies the drivers of ICT production location and trade across countries with a focus on the relative position of the EU. The analyses clearly indicate that the EU must step up its efforts to accelerate the shift towards digital production and strengthening the ICT sector that produces the required technologies and services. In addition, from a trade policy perspective, a harmonised set of standards and regulatory framework is to be aimed at to minimise mismatches in technical specifications and requirements. This will lead to the diffusion of positive externalities and should allow for a smooth operation of the global value chains in these products.
Topic:
Communications, European Union, Trade, Information Technology, Digitalization, and Production
Political Geography:
Europe

10. The Future of the Automotive Industry: Dangerous Challenges or New Life for a Saturated Market?

Author:
Annamaria Simonazzi, Jorge Carreto Sanginés, and Margherita Russo
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The automotive industry is undergoing a radical transformation. New social, technological, environmental and geopolitical challenges are redefining the characteristics of a saturated market, opening new scenarios while offering opportunities for the entry of new players. These challenges are bound to trigger reorganization of the global value chain between old and new suppliers and car makers and their suppliers, affecting the distribution of employment, the regionalization of production and the dynamic evolution of the comparative advantage of nations. In this paper we address the issue of the reorganization of global value chains in the face of these challenges. The analysis will compare the relative position of core and peripheries in the North-American and European macro-regions, focusing on Mexico, which represents a significant case study for analysis of the impact of the digital transformation on the domestic value chain in an “integrated periphery”, and of trade agreements on the location policies of big multinationals. The dependency of the Mexican automotive industry on the strategic decisions of global players is considered a factor of great vulnerability, especially in a context of rapid change in the patterns of consumption, technologies and international trade agreements. For Mexico, as for European producers in the integrated and semi-peripheries, the main challenge in the near future will be posed by the radical transformation the industry is going through in electrical and autonomous-driving vehicles, which sees regions and players outside the traditional automotive clusters in the lead. The transformations taking place are bound to change the global structure of automotive production. The rise of new competitors from the emerging economies and would-be entrants from other sectors, competing in mastering the new digital and software technologies, threatens the established structure of the industry. The pandemic has led to a spectacular acceleration in the process of change, while heightening uncertainty about future developments. This is why the governments of leading countries are joining in the race, wielding carrots and sticks in support of their industries and in the endeavor to encourage risk-taking and investment in research and innovation, step up e-vehicle production while providing for the necessary infrastructures, and guarantee their companies a place in the new industry.
Topic:
Markets, Networks, Integration, Decarbonization, Digitalization, Production, and Automotive Industry
Political Geography:
Europe, North America, and Mexico