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31. China, Like the US, Faces Challenges in Achieving Inclusive Growth Through Manufacturing

Author:
Robert Z. Lawrence
Publication Date:
08-2019
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
For more than three decades the goal of becoming “the factory of the world” has been at the core of China’s development strategy. This strategy, in combination with high rates of domestic investment and low rates of consumption, made Chinese production the most manufacturing intensive in the world. But as its wages have risen, China’s competitiveness in the most labor-intensive manufacturing industries has eroded. Its ability to assemble products remains a major source of its exports, but it has also tried to shift toward more sophisticated value-added production domestically. Chinese domestic spending has shifted away from investment toward more consumption as citizens’ incomes have grown. Like Americans, Chinese people are also spending more on services than on manufactured goods. All these changes are fundamentally altering the structure of China’s production, reducing the role of manufacturing, and increasing the skill levels of workers in manufacturing. This Policy Brief reviews the challenges posed by these developments for China’s long-term goal of achieving more inclusive growth. It presents evidence that commonly held perceptions that Chinese manufacturing employment growth is robust are wrong. In fact, such growth has peaked and China is now following the pattern of structural change that is typical of a more mature emerging economy, in which the share of employment in manufacturing declines as workers are increasingly employed in services.
Topic:
Bilateral Relations, Economic growth, and Manufacturing
Political Geography:
China, Asia, North America, and United States of America

32. The 2018 US-China Trade Conflict after 40 Years of Special Protection

Author:
Chad P. Bown
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
In 2018, the United States suddenly increased tariffs on nearly 50 percent of its imports from China. China immediately retaliated with tariffs on more than 70 percent of imports from the United States. This paper assesses what happened in 2018 and attempts to explain why. It first constructs a new measure of special tariff protection to put the sheer scope and coverage of the 2018 actions into historical context. It then uses the lens provided by the 2018 special tariffs to explain the key sources of economic and policy friction between the two countries. This includes whether China’s state-owned enterprises and industrial subsidies, as well as China’s development strategy and system of forcibly acquiring foreign technology, were imposing increasingly large costs on trading partners. Finally, it also examines whether the US strategy to provoke a crisis—which may result in a severely weakened World Trade Organization—was deliberate and out of frustration with the institution itself.
Topic:
Economics, International Trade and Finance, World Trade Organization, Bilateral Relations, Trade Wars, Donald Trump, and Imports
Political Geography:
China, Asia, North America, and United States of America

33. The United Kingdom's Belt and Road Initiative strategy after Brexit

Author:
Benjamin Barton
Publication Date:
06-2019
Content Type:
Policy Brief
Institution:
Asia Research Institute, University of Nottingham
Abstract:
As China’s President Xi Jinping’s signature foreign policy programme, the Belt and Road Initiative (BRI) has become one of the world’s most active infrastructure development drivers. The BRI is helping to meet the increasing demand for infrastructure development in emerging markets across the world. This policy is unlikely to change due to the importance that the Chinese government attributes to the BRI, with it now being formally enshrined into the Chinese Communist Party (CCP) constitution. For the UK, the BRI stakes are high; it matters both domestically and internationally. It is impacting the wellbeing of countries that are of strategic importance to the UK. It also contributes to the emerging geopolitical rivalry on infrastructure financing. The government should explore bilateral and multilateral venues to seek to cooperate with China on the BRI by developing a UK BRI strategy post-Brexit.
Topic:
Development, Bilateral Relations, Infrastructure, Geopolitics, Brexit, Multilateralism, Belt and Road Initiative (BRI), and Economic Cooperation
Political Geography:
Britain, China, United Kingdom, and Asia

34. The United Kingdom's Belt and Road Initiative strategy after Brexit: Background Report

Author:
Benjamin Barton
Publication Date:
06-2019
Content Type:
Special Report
Institution:
Asia Research Institute, University of Nottingham
Abstract:
As China and President Xi Jinping signature foreign policy programme, the BRI has become in a very short space of the time one of the world’s largest and most active international infrastructure development drivers. The BRI is helping, in a significant manner, to meet the increasing demand for infrastructure development and upgrades in emerging markets – a trend that is unlikely to slow anytime time soon, especially given the initiative’s current importance to the Chinese government. For the British government (from here onwards ‘government’), although the UK is unlikely to be a prime destination for BRI projects (for now), the BRI stakes are high. Not only do BRI projects impact the economic wellbeing of a number of countries of strategic importance to the UK, but the government cannot remain passive in the emerging geopolitical context of infrastructure development and financing rivalry. In addition, in light of its relative post-Brexit geopolitical isolation, the government needs to adopt a firm and unequivocal political stance in dealing with its Chinese counterpart should the UK itself become the recipient of BRI projects.
Topic:
Economics, Bilateral Relations, Geopolitics, Brexit, Multilateralism, and Belt and Road Initiative (BRI)
Political Geography:
China, United Kingdom, and Asia

35. Sino-Indian Nuclear Dynamics: Taking the Global Lead

Author:
Prakash Menon
Publication Date:
07-2019
Content Type:
Journal Article
Journal:
Fletcher Security Review
Institution:
The Fletcher School, Tufts University
Abstract:
Technology often seduces potential adversaries through a promise of relief from security threats only to deceive through the inevitable action-reaction cycle. In the universe of security, technology is contestable both by technology itself and by doctrinal prescriptions and operational countermeasures. The advantage provided by new technology is mostly ephemeral in that provides the momentum for an endless cycle that is best described as chasing one’s own tail. Only political intervention through mutual understanding, doctrinal prudence, and regulating the search for operational supremacy holds potential to escape the stranglehold of the action-reaction cycle. The elusive search for Ballistic Missile Defense (BMD) is a prime example. This paper seeks to interrogate the role of the technology-security dynamics in the context of the Sino-Indian nuclear weapon relationship. ​ The context of the Sino-Indian nuclear weapon relationship is clouded by the enhancing reach of India’s missiles[1], the evolving Chinese reaction to U.S. nuclear modernization accompanied by a shift in nuclear posture, and a shared belief in the role of nuclear weapons that is signified by No First Use (NFU) doctrine. The latter point represents political intervention while the two former signify the action-reaction cycle which is primarily a product of technology. However, both China and India must contend with nuclear powers that espouse First Use. China in dealing with the United States and Russia who are quantitatively superior nuclear powers, while India deals with Pakistan whose claims of quantitative superiority are contested. ​ In technological terms, the rise of China and the U.S. reaction resulting in contemporary geopolitical flux at the global level has impacted the evolution of China’s nuclear arsenal. The most prominent illustration of this is China’s reaction to the United States’ withdrawal from the Ballistic Missile Defense Treaty. Earlier China had eschewed development of BMD, but the United States’ quest to create BMD has caused China to attempt to develop its own BMD system as well as systems that can overcome BMD like multiple independently targetable reentry vehicles (MIRVs) and Hyper Glide Vehicles (HGVs). Similarly, India has reacted to developments in China and Pakistan by launching an indigenous BMD development program...
Topic:
Security, Nuclear Weapons, Bilateral Relations, and Weapons
Political Geography:
Pakistan, China, South Asia, India, and Asia

36. Prospects for the New EU Strategy on India: Game Changer or Business as Usual?

Author:
Garima Mohan
Publication Date:
09-2019
Content Type:
Policy Brief
Institution:
Institut français des relations internationales (IFRI)
Abstract:
The new European Union (EU) strategy on India marks a major moment of departure in EU-India relations. It reflects three critical shifts: firstly, the EU no longer views India from a “trade lens” only, recognizing its important geopolitical role in maintaining a multipolar Asia. Second, the strategy frames EU-India relations in the context of broader geopolitical developments, primarily the rise of China. Recognition of the China challenge and its impact not only in Europe, but also on the balance of power in Asia, has pushed the EU to change the nature of its partnerships in the region, particularly with India. Finally, the strategy links European security and prosperity to developments in Asia, broadening the scope of EU foreign policy substantially. This paper analyses the new EU strategy on India and highlights areas, which represent a departure from previous strategies. The paper looks specifically at proposals for greater foreign and security cooperation, for securing a rules-based order, increasing regional connectivity, improving trade and investment, and building better coordination on and with India. These proposals are commendable and respond to a long laundry list suggested by experts from both sides over a long time. They also fit well with India’s priorities, namely responding to increasing Chinese political, economic and military presence in South Asia, security in the Indian Ocean, as well as more proactive engagement in regional and global institutions. Finally, the paper suggests ways of taking this forward and ensuring the strategy does not remain a paper tiger in the long arsenal of EU-India declarations. While more dialogues on global and strategic issues is a great idea and will help change perceptions in New Delhi that the EU is not a strategic actor, the EU will have to ensure this is not hindered by the Indian Ministry of External Affairs’ already overstretched capacities and the 30 existing EU-India dialogues. Focusing on ongoing debates in India and Europe in these dialogues, particularly connectivity projects, maritime security in the Indian Ocean, 5G networks and infrastructure might also open up new avenues of cooperation. Overall the EU-India relationship has witnessed remarkable momentum over the last four years – aided by political will from both sides, the China challenge, friction in transatlantic ties, and common challenges within Europe and India. The new strategy is a good first step to build on this momentum. However, it needs to be translated into action fast.
Topic:
Security, Foreign Policy, Bilateral Relations, and Geopolitics
Political Geography:
China, Europe, South Asia, India, and European Union

37. How does China fare on the Russian market? Implications for the European Union

Author:
Alicia Garcia-Herrero and Jianwei Xu
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
China’s economic ties with Russia are deepening. Meanwhile, Europe remains Russia’s largest trading partner, lender and investor. An analysis of China’s ties with Russia, indicate that China seems to have become more of a competitor to the European Union on Russia’s market. Competition over investment and lending is more limited, but the situation could change rapidly with China and Russia giving clear signs of a stronger than ever strategic partnership.
Topic:
Economics, Markets, Bilateral Relations, Governance, Investment, and Exports
Political Geography:
Russia, China, Europe, Eurasia, and Asia

38. A Golden Opportunity for a U.S.-Taiwan Free Trade Agreement

Author:
Dan Blumenthal and Michael Mazza
Publication Date:
02-2019
Content Type:
Special Report
Institution:
Project 2049 Institute
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 U.S. 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 U.S.-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.
Topic:
Treaties and Agreements, Bilateral Relations, Free Trade, and Trade
Political Geography:
China, Taiwan, Asia, United States of America, and Indo-Pacific

39. U.S.-China Relations: The Way Forward

Author:
P. H. Yu
Publication Date:
01-2019
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
As confrontation looms over Washington and Beijing, it is critical to identify the true nature of this challenge from an international relations perspective before any attempt to devise a counter measure. Wrong presumptions or prejudicial interpretations may lead to dire consequences of unforeseeable magnitude. One past example would be the U.S. government’s belief that Iraq was developing weapons of mass destruction (WMDs) before the American invasion in 2003. A more current example would be the American nuclear anxiety on North Korea and how President Trump bypassed conventional American strategic thinking and circumvented hawkish threats of preemptive nuclear annihilation to resolve a “draconian crisis” via “smart diplomacy.” These examples may shed light on a pathway to resolution for the current U.S.-China trade conflict. The United States and China have ample experience of weathering a crisis on the brink of war, whether it was on the Korean Peninsula or in Indochina. China today remains on the U.S. sanctions list for certain high-tech products and military equipment. Both the Trump administration and Congress continue to criticize China regularly, ranging from human rights to religious rights, from the rule of law to the autocratic political system, from the state-owned banks to restrictive market access to foreign corporations, and from currency manipulation to unfair trade practices.
Topic:
International Relations, Bilateral Relations, Trade Wars, and Trade
Political Geography:
China, Asia, North America, and United States of America

40. Denmark's China Challenge

Author:
Luke Patey
Publication Date:
10-2019
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies
Abstract:
A common refrain in Denmark is that China is too far away to be a threat to Danish economic, foreign and security policy interests. This is no longer the case. Danish policy-makers acknowledge that China’s rise as a global superpower presents Denmark with new challenges. However, transforming this strategic thinking into practice is no simple task. Recommendations Intensify cooperation between the Ministries of Defense and Foreign Affairs to ensure Denmark’s initiatives in foreign policy, security and economic relations with China are more closely integrated. Beware of the bilateral. Beijing’s new assertive foreign policy and US-China strategic competition require that Denmark leverage its interests increasingly through the EU, NATO and other multilateral bodies. Assess the economic vulnerabilities of Danish industries in China and diversify trade and investment across Asia’s emerging markets and developed economies in the G7/EU.
Topic:
Security, Foreign Policy, Defense Policy, Power Politics, Bilateral Relations, Cybersecurity, and Global Political Economy
Political Geography:
China, Europe, Asia, and Denmark