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341. Beyond 2030: Economic growth in the Middle East and North Africa

Author:
Karen E. Young
Publication Date:
05-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Energy-dependent growth in the Middle East and North Africa (MENA) region, whether in traditional oil and gas exports or petrochemical production and global refinery operations, will be sensitive to shifts in Asian economies and new technology and efficiency innovation. Without structural reforms to subsidies and labor markets, a reliance on debt finance now kicks the can down the road toward difficult fiscal choices in the future. MENA economies are becoming more integrated into emerging markets not by increased trade but through state-led development partnerships and the use of aid and economic statecraft.
Topic:
Foreign Policy, Development, Energy Policy, and Economic growth
Political Geography:
Middle East, North Africa, Gulf Cooperation Council, and Gulf Nations

342. Road to the Caliphate

Author:
Katherine Zimmerman
Publication Date:
06-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Successes on the battlefields against al Qaeda, the Islamic State, and other like-minded groups have not led to their defeat or permanently reduced their threat to the United States. The deterioration of conditions in the Muslim world has made communities vulnerable to and created opportunities for the Salafi-jihadi vanguard to develop local ties. The reliance of the Salafi-jihadi movement on its relationship with Sunni communities to strengthen and expand beyond ideological supporters is a key vulnerability. The US should reorient its efforts to focus not only on disrupting and preventing active terror plots as a national security priority but also on severing the relationships the Salafi-jihadi movement has formed with Sunni communities.
Topic:
Foreign Policy, Terrorism, Military Strategy, Al Qaeda, and Islamic State
Political Geography:
Middle East

343. Dismantling the authoritarian-corruption nexus

Author:
Clay R. Fuller
Publication Date:
07-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The effects of authoritarianism are amplified and obfuscated by growing economic interconnectivity. Combating authoritarianism and addressing the dark networks that support its consolidation are the unavoidable strategic challenges to global security. The authoritarian-corruption nexus is the growing convergence of licit and illicit state and non-state actors that facilitates and launders the profits of illegal activity, reinforcing the strength and survival of authoritarian systems of governance everywhere. It depends on and resides in the complex and rapidly changing global economic currents flowing in and out of American markets and is the defining threat to freedom in the 21st century. Domestic and international efforts are needed to dismantle the authoritarian-corruption nexus, including addressing the (ab)use of anonymous shell corporations and reestablishing the Group of Seven.
Topic:
Foreign Policy, Corruption, and Authoritarianism
Political Geography:
Global Focus

344. China’s global business footprint shrinks

Author:
Derek Scissors
Publication Date:
07-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
China’s investment and construction around the world plunged in the first half of 2019 and is unlikely to return to 2016–17 levels in the foreseeable future. The principal cause is fewer large transactions by state-owned enterprises. These firms rely on foreign currency provided by Beijing for global activities, and hard currency may be rationed indefinitely. There are brighter spots. The raw number of investments held up better than transaction size. The private share of China’s global investment climbed, and the greenfield share rose sharply. Investment in the Belt and Road Initiative outperformed that in traditionally favored rich economies such as Australia. Chinese investment in the US has been minor in size for two years. Policymakers should shift focus from screening to unwanted activity by Chinese firms, including intellectual property theft and other criminal acts. Enforcement targeting specific firms is superior to tariffs but should go beyond largely empty steps taken to date.
Topic:
Foreign Policy, Economy, Business, and Investment
Political Geography:
China, Asia, and United States of America

345. How to evaluate China’s economy

Author:
Derek Scissors
Publication Date:
01-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Official Chinese economic data are often the only game in town, but they are untrust­worthy. Sometimes they prove inaccurate; during downturns they are falsified outright. Finding inconsistency in official statistics demonstrates the problem but offers no solution, since it is rarely clear which series is better. Examining 15 major indicators for importance and reliability shows that growth in gross domestic product (GDP) and GDP per capita should be deemphasized. To illustrate, China’s GDP per capita is twice as high as official per capita disposable income. The latter can be spent; the former is an accounting result. Another conclusion: Arguably the most valuable indicators are the worst measured. Debt is reasonably estimated at present, but factor productivity and human capital are vital to medium-term performance and receive far too little attention.
Topic:
Foreign Policy, Monetary Policy, GDP, and Economy
Political Geography:
China, Europe, and Beijing

346. The China dream: America’s, China’s, and the resulting competition

Author:
Gary J. Schmitt
Publication Date:
01-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Although changes in American and Chinese leadership have brought current tensions between the two nations to the fore, the underlying reasons for the tensions are not tied to either President Donald Trump or President Xi Jinping coming into office. Rather, the strategic competition between the US and China is principally the product of regime-driven differences over both what constitutes their national interests and what their respective visions were for the character of China’s rise. The administration’s Indo-Pacific strategy is a relatively coherent response to the challenge China poses. But questions remain about the administration’s ability to resource it sufficiently and carry it out steadily given President Trump’s own idiosyncratic America First policy views.
Topic:
Foreign Policy, Bilateral Relations, and Strategic Competition
Political Geography:
China, Asia, North America, United States of America, and Indo-Pacific

347. China’s demographic outlook to 2040 and its implications: An overview

Author:
Nicholas Eberstadt
Publication Date:
01-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
We already have a fairly reliable picture of China’s population profile for the year 2040 because the overwhelming majority of people who will be living in China in 2040 are already alive and living there today. China’s population is on track to peak in the coming decade and to decline at an accelerating tempo thereafter. China is set to experience an extraordinarily rapid surge of population aging, with especially explosive population growth for the 65-plus group, even as its working-age population progressively shrinks. These trends can only make for serious economic headwinds, presaging the end of China’s era of “heroic economic growth.”
Topic:
Foreign Policy, Demographics, Political Economy, and Population
Political Geography:
China and Asia

348. The Gulf’s eastward turn: The logic of Gulf-China economic ties

Author:
Karen E. Young
Publication Date:
02-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Arab Gulf states are expanding their political and economic ties with China as a bridge strategy to create a next-generation energy market in traditional oil and gas products, as well as petrochemical production and future market access in expected areas of consumer growth. China is also a competitor in some areas where Arab Gulf states are investing in infrastructure, ports, and political outreach to secure new security partnerships, particularly in the Horn of Africa. China and the Arab Gulf states share a model and vision of economic development that is state centered and profitable to state-owned enterprises and financial institutions.
Topic:
Foreign Policy, Development, and Economics
Political Geography:
China, Middle East, Asia, and Gulf Cooperation Council

349. A golden opportunity for a US-Taiwan free trade agreement

Author:
Dan Blumenthal and Michael Mazza
Publication Date:
02-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The United States and Taiwan can create a free trade agreement (FTA) that serves the interests of both sides. Taiwan should seek to set the gold standard in economic openness, as well as in the legal, regulatory, and standards frameworks that will govern emerging technologies and industries such as 5G, the internet of things (IOT), artificial intelligence (AI), and the future industries to be built upon them. In pursuit of the United States’ vision for a “free and open” Indo-Pacific, it would be wise for the US to enlist in its effort countries that are, themselves, already free and open. Taiwan should be considered a crucial partner in the Trump administration’s strategy. This monograph serves to provide a framework for a US-Taiwan free trade agreement (FTA), outlining areas of concern for the United States, in addition to areas that provide opportunities for closer bilateral cooperation. Importantly, such cooperation could give greater impetus for free trade negotiations, advance the Trump administration’s Indo-Pacific strategy, and bolster the United States’ National Security Strategy. In order to deepen economic ties and to, at the same time, advance the Indo-Pacific strategy, the United States should prioritize a free trade agreement (FTA) with Taiwan. The US has not completed or ratified a free trade agreement since the U.S.-Korea deal. It is now negotiating with Japan and the Philippines. But, as this paper will show, an FTA with Taiwan would have substantial strategic benefits and would, moreover, be far easier to conclude than other agreements under discussion.
Topic:
Foreign Policy, Bilateral Relations, Free Trade, and Trade
Political Geography:
Taiwan, Asia, North America, and United States of America

350. The US-China economic relationship: A comprehensive approach

Author:
Neena Shenai and Joshua P. Meltzer
Publication Date:
02-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The US–China economic relationship has reached a critical juncture. Over the past year, the US has imposed tariffs on $250 billion worth of Chinese imports and China has retaliated, raising tariffs on a similar amount of US exports. At the G-20 leaders’ summit in November 2018, Presidents Trump and Xi agreed to resolve the trade dispute within 90 days—by March 1, 2019, though this deadline has been recently extended. The US concerns that underpin these bilateral trade tensions stem from specific practices endemic to China’s economic model that systematically tilt the playing field in favor of Chinese companies domestically and globally. Progress on specific trade issues will require China to comply with its World Trade Organization (WTO) commitments and to make certain reforms that will likely touch on areas of state control over the economy. In addition, new trade rules are needed to address China’s economic practices not covered by its WTO commitments, including in areas such as state-owned enterprises (SOEs), certain subsidies, and digital trade. These issues also come at a time of increasing US concern over the national security risks China presents, particularly with respect to technology access. All of these matters underscore the complexity of US-China bilateral negotiations as well as the stakes at play. Resolving US-China differences in a meaningful way will take time. This policy brief assesses the state of the US-China trade relationship by first looking at the economic impact on the US The policy brief then looks at why the Chinese economic model is so concerning. Despite the challenges the US has had at the WTO, the policy brief argues that the WTO should be central to resolving US-China trade tensions. We outline a multi-prong strategy, including bilateral, multilateral, and unilateral actions as well as working with allies that together would constitute positive next steps for this critical economic relationship. In taking this multifaceted approach, the US needs to stay true to its values and not accept short-term gains or “fig leaf” deals. In particular, creating a managed trade relationship with China would not be a constructive outcome. Instead, the US should work with China to agree on long term solutions. The resulting deal should address the real issues at hand in a free market manner and strengthen the multilateral global trading system and rule of law that the US has championed in the post-World War II era.
Topic:
Foreign Policy, Globalization, Bilateral Relations, and Trade
Political Geography:
China, Asia, North America, and United States of America