China's new generation trade agreements: Importing rules to lock in domestic reform?

Since the beginning of the 21st century we have witnessed a proliferation of Preferential Trade Agreements (PTAs) in Asia Pacific. China has been at the forefront of this development. Initially, China's PTAs were very shallow and mainly aimed at building friendly relationships with developing countries. However, over time, China has started to negotiate deeper PTAs with developing and developed countries alike. This notable shift has thus far been understood to result from four broad motivations: China's desire to access key export markets; the facilitation of regional production networks; to address resource security concerns; and/or to further geostrategic interests and political influence. We propose that these motives are not sufficient to fully account for China's new generation trade agreements. We suggest that China is increasing its integration into the world economy to push for domestic marketization and reform by credibly committing to trade liberalization through PTAs. Deep and comprehensive PTAs oblige a country to follow a set of rules that leave little leeway to violate the terms. In order to successfully implement and enforce PTA commitments, China has also gradually strengthened its regulatory state by investing in regulatory capacity and capability in the field of trade policy. We test the plausibility of our argument through an in-depth analysis of the PTAs signed by China since 2000 and find evidence that China's PTAs are indeed in part driven by a desire to lock in domestic economic reform, which has gone hand in hand with a strengthening of its regulatory state.     

Recent trends in the European Union trade and investment policy towards China

The last decades＇ trend towards the creation of a world market of goods and services and the upsurge of China as a global competitor ought to be considered as an important challenge for the European Union. In contrast to this interpretation, the European Union policy towards China has suffered from an absence from a long run view. European institutional behaviour has been based on applying measures that were solely reactions to the policies launched by the United States. Finally, the difficulty of finding common interests among all member countries has been a constant in the relationship with China. The European Union has recently shown a clear concern about the unavoidable need of improving European firms＇ competitiveness, especially in order to overcome the Chinese access to the internationalised division of labour. Nevertheless, it is still difficult to observe a thorough treatment for the economic challenge of emergent economies as a whole in many European policy measures.     

Subnational electoral regimes and crisis recovery in Argentina and Mexico

The confluence of Latin America's volatile economic development patterns and transition to democracy has given rise to a proliferation of work on the national-level political causes and consequences of economic shocks and recovery rates. We explore the subnational electoral determinants of crisis recovery through analysis of growth rates in Mexico's thirty-one states and Argentina's twenty-three provinces following their economic declines of 2000–2002. Consistent with a theory that views intra-national variations in democracy as critical to understanding broader development patterns, we find that subnational electoral “regimes” significantly affect provincial recovery rates. Provinces that have an established electoral legitimacy prior to the onset of an economic shock, and those in which the governor enjoyed a substantial margin of victory, had significantly stronger recovery rates than those provinces stuck in a subnational regime transition with a sitting executive who lacked any claim to an electoral mandate.     

Still a poster child for social investment? Changing regulatory dynamics of early childhood education and care in Denmark and Sweden

This paper investigates the regulation of publicly organized early childhood education and care (ECEC) in Denmark and Sweden, through the regulatory welfare state (RWS) framework. The analysis focuses on how alterations in funding and quality of care are shaped by governmental and nongovernmental actors at national and local levels of government. Through focused structured analysis, we examine how various actors have shaped the funding and quality of childcare in Denmark and Sweden, from the early 2000s to 2020, with special attention to the period during and after the 2008 financial crisis. In the aftermath of the financial crisis, concerns about quality in care were raised on the political agenda by various actors in both countries, leading to decisions to improve the quality of care. Yet, the regulatory dynamics differ: In Denmark, the debate led to a decision in 2019, to implement a minimum statutory requirement of regulatory quality standards. From an RWS perspective, this outcome can be qualified as “double expansion,” because regulatory quality standards, and public funding for childcare increased. In Sweden, the debates about quality of ECEC led, in 2016, to political guidelines about quality standard, but with no additional national funds, and no mandatory regulatory quality requirements. Analytically, this can be qualified as “regulatory-led expansion,” that is requirements for quality standards, although the lack of additional national funds suggests that it will be difficult to improve ECEC quality substantially. The RWS perspective, which focuses on national and municipal levels of governance, also gives insights into hidden inequalities between municipalities regarding funding and quality of ECEC, which are more pronounced in Sweden than in Denmark.     

Sudpolitik: the political economy of Taiwan's trade with Southeast Asia

Abstract

In December 1993 the Taiwan government adopted a policy called nanjin zhengce or sudpolitik, a policy aimed at diverting part of Taiwan's trade and investment flows from China to Southeast Asia. This paper addresses the following questions: what is sudpolitik? why adopt such a policy? what are the economic, political, and strategic considerations in the pursuit of this policy? which countries are its specific targets? how do the countries directly affected by this policy respond to it? The paper also discusses the issue of Taiwan's aid in connection with sudpolitik. While the effectiveness of the policy is far from clear at present, the paper concludes with four observations: Taiwan's trade and aid are beginning to intertwine; Taiwan's diplomacy is largely economically or commercially led; Taiwan has achieved some positive results in improving its relations with Southeast Asian countries; and, Taiwan has reached a new stage in its economic development whereby it needs to invest overseas in order to sustain its economic growth. Overall, sudpolitik represents a novel step in Taiwan's diplomatic practice.     

China in the dynamic Asia‐Pacific region

The Chinese economy has experienced spectacular growth in recent years. Despite its huge trade and investment potential, China today remains an insignificant player in the world economy. But the emerging Chinese economy has already profoundly changed the pattern of trade and investment flows in the Asia‐Pacific region. Over the years, the Chinese economy has been steadily integrated with its neighbouring economies of Japan, the NIEs and ASEAN, which are all well known for their dynamic growth. The growing integration of the Chinese economy, with its huge economic potential, into the Asia‐Pacific region will enhance the region's prospects for further growth. Most Asia‐Pacific economies take a positive view of China's increasing economic involvement in the region as a new source of economic opportunity. It is in such a regional rather than the global context that the immediate effects of China's recent economic upsurge should be gauged.     

China–ASEAN economic relations after establishment of free trade area*

This paper aims to contribute to an understanding about the major changes in China–ASEAN economic relations after establishment of the China–ASEAN Free Trade Area (CAFTA) in 2010. First, China's merchandize trade balance with ASEAN has shifted from deficit to surplus since 2012. This reflects China's improving comparative advantage in manufacturing production vis-à-vis ASEAN as a whole. Second, with China's wage hike, ASEAN investors can no longer take advantage of China's cheap labor force. Concurrently, China's investment in ASEAN has been increasing and become more diversified, ranging from energy to manufacturing and services. Singapore has remained the most important investment destination for Chinese investors and the largest foreign investor in China among ASEAN countries. Third, China has comparative advantages in providing construction, telecommunications, computer and information services and other business services to ASEAN. On the other hand, ASEAN, led by Singapore, has opportunities in the financial services and tourism markets in China. Finally, the development of economic regionalism, notably the Regional Comprehensive Economic Partnership and Trans-Pacific Partnership, will remain critical for the CAFTA's relevance in regional economic integration, as well as China–ASEAN relations in the future.     

What are the strategic and economic implications for South Asia of China's Maritime Silk Road initiative?

This article focuses on South Asia's role in China's Maritime Silk Road (MSR) initiative. Given the saliency of this MSR enterprise as part of ChinesePresident Xi Jinping’s “One-Belt-One-Road” strategy, how this ambitious scheme impacts China’s relations with South Asian states along the MSR’s route, i.e. India, Pakistan, Sri Lanka, Maldives and Bangladesh, merits investigation. The fate of the MSR will be determined by China’s relations with these states, since South Asia is in the middle of major sea-lanes between East/Southeast Asia and Middle East/Europe. The study examines the intentions and executions of China’s MSR projects in South Asia, evaluates the political and economic calculations of participating in the MSR for regional states, and identifies actions taken by them that can decide the initiative’s success. Politically, reactions of South Asian states to the MSR are explained as: fear of expanding Chinese influence in the Indian Ocean for India; and attempts by which Pakistan, Sri Lanka, Maldives and Bangladesh use China to counteract possible domination by India. Economically, two MSR pathways for South Asian states are analyzed: increases in Chinese infrastructure investments; and expansion in South Asia-China trade; both of which are reducible by loans owed to China, or “strings”/conditions attached.     

Trading with the enemy? The futility of US commercial countermeasures against the Chinese challenge

This paper examines whether the US is in a position to adopt restrictive commercial measures against China in order to complement military balancing. It focuses on the necessary condition for serious economic measures against an adversary: the state needs to be sure that it can effectively diminish the adversary's economic performance more than its own. This essay suggests that Washington cannot ascertain that this necessary condition is met in its relations with China. Thus, it might be better for the US to avoid restricting trade with China in any meaningful way, even though bilateral security rivalry intensifies.     

Explaining Australia–Japan security cooperation and its prospects: ‘the interests that bind?’

In this paper, we assess the drivers of, and prospects for, further security cooperation in the Australia–Japan bilateral relationship. We argue that while balance of threat and capability gaps may restrain the pace of deepening Australian-Japan security relations, these gaps are diminishing and are, in any case, secondary to the specific shared interests we posit as the primary drivers of Australia–Japan security cooperation. These specific interests, however, are shaped not only by a commitment in both countries to liberal-based principles and freedoms at home and in inter-state relations, but also by a common awareness of the importance of continued US primacy to the ongoing maintenance of those interests. Thus, in the absence of any fundamental change in how Australia and Japan understand their respective interests and the US role in the region, Donald Trump's recent and unexpected election as US president notwithstanding, we conclude that the case for further security cooperation – via additional cross-bracing of their respective US alliance relationships – will almost certainly remain compelling for both countries.