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21. India, Thailand and the Burma Connection

Author:
Sasiwan Chingchit
Publication Date:
02-2012
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
Burma's ongoing democratic and economic transition has created an unprecedented opportunity for India and Thailand to cooperate and strengthen economic links between South and Southeast Asia. It was therefore no coincidence that the Indian government invited Ms. Yingluck Shinawatra, Thailand's prime minister, to be the chief guest at the country's annual Republic Day parade on January 26. Even more symbolic was that the Thai premier's visit to New Delhi overlapped with that of Burma's foreign minister, Mr. Wanna Maung Lwin, who came to discuss progress on economic and security relations and extended an invitation to India's Prime Minister Manmohan Singh to visit his country.
Topic:
Democratization, Economics, Government, and International Trade and Finance
Political Geography:
South Asia, India, New Delhi, Burma, Thailand, and Southeast Asia

22. U.S.-China Competition in Asia: Legacies Help America

Author:
Robert Sutter
Publication Date:
02-2012
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
As Sino-American competition for influence enters a new stage with the Obama administration's re-engagement with Asia, each power's legacies in the region add to economic, military and diplomatic factors determining which power will be more successful in the competition. How the United States and China deal with their respective histories in regional affairs and the role of their non-government relations with the Asia- Pacific represent important legacies that on balance favor the United States.
Topic:
Foreign Policy, Arms Control and Proliferation, Diplomacy, Economics, International Trade and Finance, and Bilateral Relations
Political Geography:
United States, China, America, and Asia

23. America's Voluntary Standards System—A "Best Practice" Model for Innovation Policy?

Author:
Dieter Ernst
Publication Date:
02-2012
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
For its proponents, America's voluntary standards system is a "best practice" model for innovation policy. Foreign observers however are concerned about possible drawbacks of a standards system that is largely driven by the private sector. There are doubts, especially in Europe and China, whether the American system can balance public and private interests in times of extraordinary national and global challenges to innovation.
Topic:
Democratization, Economics, Globalization, International Trade and Finance, Markets, and Governance
Political Geography:
United States, China, and Europe

24. Networks, Trust, and Trade: The Microeconomics of China-North Korea Integration

Author:
Stephan Haggard and Marcus Noland
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
A central hope of engagement with North Korea is that increased cross-border exchange will encourage the strengthening of institutions, and eventually, a moderation of the country's foreign policy. An unprecedented survey of Chinese enterprises operating in North Korea reveals that trade is largely dominated by state entities on the North Korean side, although we cannot rule out de facto privatization of exchange. Little trust is evident beyond the relationships among Chinese and North Korean state-owned enterprises. Formal networks and dispute settlement mechanisms are weak and do not appear to have consequences for relational contracting. Rather, firms rely on personal ties for identifying counterparties and resolving disputes. The weakness of formal institutions implies that the growth in exchange does not conform with the expectations of the engagement model and may prove self-limiting. The results also cast doubt that integration between China and North Korea, at least as it is currently proceeding, will foster reform and opening.
Topic:
International Trade and Finance and Bilateral Relations
Political Geography:
China, Israel, and North Korea

25. The Microeconomics of North-South Korean Cross-Border Integration

Author:
Stephan Haggard and Marcus Noland
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
Economic integration between North and South Korea occurs through three modalities: traditional arm's-length trade and investment, processing on commission (POC) trade, and operations within the Kaesong Industrial Complex (KIC). In order, these three modalities are characterized by decreasing exposure of South Korean firms to North Korean policy and infrastructure. Through a survey of 200 South Korean firms operating in North Korea we find that these modalities of exchange matter greatly in terms of implied risk. For example, firms operating in the KIC are able to transact on significantly looser financial terms than those outside it. We find that direct and indirect South Korean public policy interventions influence these different modalities of exchange and thus impact entry, profitability, and sustainability of South Korean business activities in the North. In effect, the South Korean government has substituted relatively strong South Korean institutions for the relatively weak Northern ones in the KIC, thus socializing risk. As a result, the level and type of cross-border integration observed in the survey is very much a product of South Korean public policy.
Topic:
Foreign Policy, International Trade and Finance, Bilateral Relations, and Infrastructure
Political Geography:
Israel and Korea

26. Benevolent Benefactor or Insensitive Regulator? Tracing the Role of Government Policies in the Development of India's Automobile Industry

Author:
Rajnish Tiwari, Cornelius Herstatt, and Mahipat Ranawat
Publication Date:
01-2011
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
India's automobile industry has witnessed an impressive run of sus - tained growth in the past two decades. The total number of vehicles produced in fiscal year 1990–91 was only 2.3 million, but by fiscal year 2009–10 this number had swelled to 14.1 million. Similarly, the value of automotive products exported by India was only US$198 million in 1990, but by 2009 the value had increased nearly twenty-five-fold to US$5 billion, representing an average annual growth rate of 26 percent and catapulting India into the league of the top fifteen exporters of automotive products worldwide
Topic:
Economics, Industrial Policy, International Trade and Finance, and Markets
Political Geography:
India and Asia

27. The Trans-Pacific Partnership and Asia-Pacific Integration: A Quantitative Assessment

Author:
Peter A. Petri, Michael G. Plummer, and Fan Zhai
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
Two emerging tracks of trade agreements in the Asia-Pacific—one based on the proposed Trans-Pacific Partnership (TPP) agreement and an Asian track—could consolidate the “noodle bowl” of current smaller agreements and provide pathways to a Free Trade Area of the Asia-Pacific (FTAAP). We examine the benefits and strategic incentives generated by these tracks over 2010-2025. The effects on the world economy would be small initially but by 2025 the annual welfare gains would rise to $104 billion on the TPP track, $303 billion on both tracks, and $862 billion with an FTAAP. The tracks will be competitive but their strategic implications are constructive: each would generate incentives for enlargement. Over time, strong economic incentives would emerge for the United States and China to consolidate the tracks into a region-wide agreement. Each track would bring a different template to such consolidation and can be viewed as defining a “disagreement point” in the Asia-Pacific bargaining game. The study is based on an analysis of 48 actual and proposed Asia-Pacific trade agreements and models impacts on variables including sectoral trade, output, employment and job shifts in 24 world regions.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, China, Israel, Asia, Australia/Pacific, and Asia-Pacific

28. An Evaluation of Overseas Oil Investment Projects Under Uncertainty Using a Real Options Based Simulation Model

Author:
ZhongXiang Zhang, Lei Zhu, and Ying Fan
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
This paper applies real options theory to establish an overseas oil investment evaluation model that is based on Monte Carlo simulation and is solved by the Least Squares Monte-Carlo method. To better reflect the reality of overseas oil investment, the model has incorporated not only the uncertainties of oil price and investment cost but also the uncertainties of exchange rate and investment environment. These unique features have enabled the model to be best equipped to evaluate the value of oil overseas investment projects of three oil field sizes (large, medium, small) and under different resource tax systems (royalty tax and production sharing contracts). In the empirical setting, China was selected as an investor country and Indonesia as an investee country as a case study. The results show that the investment risks and project values of small sized oil fields are more sensitive to changes in the uncertainty factors than the large and medium sized oil fields. Furthermore, among the uncertainty factors considered in the model, the investment risk of overseas oil investment may be underestimated if no consideration is given of the impacts of exchange rate and investment environment. Finally, as there is an important tradeoff between oil resource investee country and overseas oil investor, in medium and small sized oil investment negotiation the oil company should try to increase the cost oil limit in production sharing contract and avoid the term of a windfall profits tax to reduce the investment risk of overseas oil fields.
Topic:
Development, Economics, Energy Policy, International Trade and Finance, and Oil
Political Geography:
China, Indonesia, and Israel

29. Who Should Bear the Cost of China's Carbon Emissions Embodied in Goods for Exports?

Author:
ZhongXiang Zhang
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
China's capital-intensive, export-oriented, spectacular economic growth since launching its open-door policy and economic reforms in late 1978 not only has created jobs and has lifted millions of the Chinese people out of poverty, but also has given rise to unprecedented environmental pollution and CO2 emissions. While estimates of the embedded CO2 emissions in China's trade differ, both single country studies for China and global studies show a hefty chunk of China's CO2 emissions embedded in trade. This portion of CO2 emissions had helped to turn China into the world's largest carbon emitter, and is further widening its gap with the second largest emitter. This raises the issue of who should be responsible for this portion of emissions and bearing the carbon cost of exports. China certainly wants importers to cover some, if not all, of that costs. While China's stance is understandable, this paper has argued from a broad and balanced perspective that if this is pushed too far, it will not help to find solutions to this issue. On the contrary it can be to China's disadvantage for a number of reasons. However, aligning this responsibility with China does not necessarily suggest the sole reliance on domestic actions. In that context, the paper recommends specific actions that need to be taken internationally as well as domestically in order to effectively control the embedded CO2 emissions in China's trade.
Topic:
Climate Change, Economics, Industrial Policy, and International Trade and Finance
Political Geography:
China

30. Korea's Growth Performance: Past and Future

Author:
Marcus Noland
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
South Korea is arguably the premier development success story of the last half century. For 47 years starting in 1963, the economy averaged 7 percent real growth annually, and experienced only two years of economic contraction: 1980 after the second oil shock and the assassination of President Park Chung-hee, and 1998 at the nadir of the Asian financial crisis. At the start of that period South Korea had a per capita income lower than that of Mozambique or Bolivia; today it is richer than Spain or New Zealand, and was the first Asian and first non-G7 country to host a summit of the G20, the unofficial steering committee of the world economy.
Topic:
Demographics, Development, Economics, Industrial Policy, International Trade and Finance, and Political Economy
Political Geography:
Israel, Asia, South Korea, Spain, Mozambique, New Zealand, and Bolivia