Southeast Asia and cross‐strait relations: The policy of separation of politics and economics

During the periods of July‐August 1995 and mid‐March 1996, China initiated a series of missile tests and military exercises in the Taiwan Strait, and the mainland for many was considered responsible for the rising tensions across the Taiwan Strait. But, Southeast Asian countries held Taiwan responsible for stimulating the mainland's military actions because of the island's claim for independence. Why? There are three different theoretical arguments on this issue, i.e. those of political primacy, economic determinism, and the separation of politics and economics. This paper contends that the principle of separation of politics and economics is the policy that Southeast Asian countries pursue in developing their relations with the PRC and the ROC, i.e. maintaining official and full‐scale relations with the PRC, but keeping unofficial and economic links with Taiwan. Therefore, for Southeast Asian countries, the PRC's military exercises in the Taiwan Strait were a political and not an economic problem, and one between the mainland and Taiwan. This is the key factor in explaining attitudes in Southeast Asian nations toward the Taiwan Strait crisis.     

International Political Economy from a Chinese Angle

In the 1990s, international political economy (IPE) as a set of concepts to interpret the current and future world system caught on quickly among Chinese scholars and policy analysts. Recent events (the Asian financial crisis and the US role, WTO negotiations, US‐Japan trade disputes) combined with China's historical experience (imperialism, war, revolution) and aspirations (to be a regional power) have given IPE specialists a different perspective on and language for the issues and events of today's global political economy. Zhu Wenli highlights the divergence between US and PRC views and interpretations on concepts of hegemony (the role of the US in a unipolar system), globalization, development models, and economic security, arguing that understanding this theoretical gap helps us to understand the current policy gap. She concludes with a reference to the limited role that international relations concepts and ideas play in the formation of foreign policy.     

Policy elites in the political economy of China's exchange rate policymaking

This paper examines the political economy of making China's exchange rate policy, with a focus on the post-Deng reform period. First it analyses the structure of elite economic policymaking, especially on exchange rate policy, pinpointing core policymakers in that structure. Second, the paper analyses the roles and responsibilities of key economic ministries, and explains how the ministries' changing roles and responsibilities in the transforming economic environment of the reform period have affected their relative influence and the positions they pursue on exchange rate policy. Results of the analyses are then applied to explain the RMB devaluation policy in 1989 and the no-devaluation policy during the Asian financial crisis.     

Emergence of the Greater China Circle Economies: Cooperation versus competition

The integration of the so-called greater China economies among Mainland China, Taiwan, and Hong Kong is one part of the global trend of regionalism. The significance of integration in terms of foreign trade and foreign direct investment demonstrates not only rapid growth but also diversity, ever since Mainland China pursued her open door policy of economic reform in 1979. For instance, the combined volume of Hong Kong and Taiwan accounted for as much as 74.1% of Mainland China's capital utilization in 1993, which in turn contributed to the rapid economic growth of Mainland China over the last two decades. The membership of Mainland China and Taiwan to the WTO, as expected by the end of 2001, will facilitate a more official arrangement of intergovernmental coordination within these Triangle Economies. However, the government of Taiwan will continue to evaluate the cross-strait relations in the context of the nation's overall political and economic security as long as the government of Mainland China does not renounce the use of military force against Taiwan.     

WHERE DOES CHINA'S SECURITIES MARKET GO FROM NOW?

On December 19,2010,China’s securities market turns 20.The past two decades have witnessed the market start from scratch and grow steadily,withstanding the near-cataclysmic 1997 Asian financial crisis and the 2008 global financial crisis.Now,it is opening up to the outside world and merging into the international financial environment.Its role in propelling the Chinese economy is undeniable,but as the securities market continues to expand and adapts to the changing world environment,one question arises:What is the next step on its path of development?     

The Role of the Military in the PRC Taiwan Policymaking: A case study of the Taiwan Strait crisis of 1995-1996

This article examines the role of the military in the structure and process of PRC policy formulation on Taiwan through a case study of the military's involvement in, and influence on, Beijing's policymaking in the Taiwan Strait crisis of 1995-1996. The military has its own vital interests in Taiwan policy, which are embodied in three aspects: preservation of the military's political privilege, military build-up for modernisation drives, and more budgetary resources for defence. This article proposes that the PRC leadership succession problem together with the military's leverage accounted for the outbreak of the crisis. Under pressure, Jiang Zemin had to accept the plan of physically intimidating Taiwan to gain the military's support in consolidating his position as Deng Xiaoping's successor.     

Competing Realities in China–India Multilateral Discourse: Asia's enduring power rivalry

Asymmetric growth in foreign policy dynamics and power posture between China and India at the regional level is the new contour of current Asian politics. One vital aspect of it is the multilateral power politics or engagement through which rising powers connect and integrate with regional vis-à-vis global conditions in order to contend and compete with each other's strategic interests and primacy. This Asian rendezvous is part and parcel of the rhetoric of liberalist sentiments, which realistically do not work in favor of the developing countries' relationships. The history of the China–India bilateral discourse suggests that. In today's context, the increasing multilateral engagement between the two countries is a potential medium for denying space and holding an edge over each other's priority of acquiring assorted global resources, forming an Asian and a global identity, and notably in securing respective national strategic objectives. Current foreign policy contours of both countries are quite different from the previous order and politics. The boundary will continue to be the fundamental problem in their bilateral discourse, while the Asian discourse of Sino–Indian multilateral politics will be decided by their competition and power rivalry in resources and identity.     

当前世界金融危机与东南亚金融危机的比较——兼谈中国应对当前世界金融危机的措施

当下发生的世界金融危机是在经济全球化背景下的新现象,几乎各国经济都深受其害,中国经济也受到较大冲击,世界经济陷入上世纪大萧条以来最困难的境地。该文对当前世界金融危机和东南亚金融危机进行比较,并提出了中国应对当前世界金融危机的措施。     

Identity,Sovereignty, and Economic Penetration: Beijing's responses to offshore Chinese democracies

Investigating how the PRC responds to democratization in Taiwan and Hong Kong, this paper argues that the Chinese Communist leadership has mainly developed three strategies in managing the complicated crises, including Beijing's own legitimacy crisis and the integration crisis of the Chinese nation, caused by the rise of offshore Chinese democracies. These strategies are: identity politics, sovereignty politics, and economic penetration. With ‘identity politics’, Beijing identifies ‘identification with the Communist leadership’ as the sole Chinese national identification, and utilizes the nationalistic passions of mainland and even overseas Chinese people against democrats in Taiwan and Hong Kong, by labeling the latter as ‘separatists’ or ‘national traitors’. Further, Beijing defines ‘sovereignty’ in a way in which the ‘central’ government monopolizes all possessions of the nation, and excludes ‘people's sovereignty’ from the politics of national reunification or the ‘one country, two systems’ model actualization. While appealing to both ‘soft power’ based in ‘patriotic nationalism’ and ‘hard power’ embedded in national sovereignty, however, the Chinese regime also mobilizes business resources and opportunities provided by China's growing economic power and China's dominance in Greater Chian economic integration for its political purposes of curbing offshore Chinese democracies.     

The Taiwan strait crisis of 1996: Implications for US security policy

The Taiwan Strait crisis of 1996 was the greatest challenge to Sino‐American relations in several decades. This study examines the crisis and its implications for US security policy. It outlines US policy toward the defense of Taiwan, discusses the US response to Beijing's military intimidation of Taiwan and analyzes several of the major lessons gleaned from the crisis. The paper suggests that, while China's aggressive behavior should not lead to a dramatic shift in the American position toward Taiwan's defense, some modest adjustments in policy may be warranted.     

China and Major Power Relations in East Asia

Tremendous changes have taken place in East Asia in the post-Cold War era, which have a great impact on Chinese foreign policy and its relations with major powers in East Asia. This new power configuration is related to as 'two ups' and 'two downs', which have become apparent since the early 1990s. The 'two ups' concern the rise of the United States and China. The United States' rise to sole superpower status has given Washington a dominant role in all four dimensions of world affairs: political, strategic, economic, and technological/cultural. Meanwhile, China has achieved a spectacular economic performance for the past two decades, sustaining high growth rates, and escaping, so far, the Asian economic crisis of 1997‐98. This expansion has greatly increased China's influence in regional and global affairs. The 'two downs' refer to the downturns of Russia and Japan. This article provides a detailed analysis of China's international environment in the context of the changing dynamics of major-power relations in East Asia. Special attention is paid to the crucial Beijing‐Tokyo‐Washington triangle. The examination focuses upon political, economic, and strategic dimensions.     

Information Exchange,Headquarters Economy and Financial Centers Development: Shanghai,Beijing and Hong Kong

Over the past several years, China has consistently maintained economic growth and at the same time emerged as a new global giant in the international arena, despite the distractions caused by the global financial crisis, which was triggered by the US Sub-prime Mortgage Crisis of 2007 and the recent bond crisis that emerged in the European Union in 2011. Concurrent with China's growing interaction with the global economy and robust growth of its domestic economy, competition for the status of national and even international financial centers in the region has become fierce. This study focuses on a ‘local’ examination of internal conditions for the emergence and growth of Chinese financial centers over the next 10–20 years. Cities contending for the top slot in the roster of Chinese cities, like Beijing, Shanghai and Shenzhen, are striving to become international financial centers and are trying to compete with Hong Kong. This study investigates the development potentials, future prospects and division of functions between different financial centers within China regarding Hong Kong, Beijing and Shanghai, with special reference to the role of information and locations of MNCs' regional headquarters.     

Prescribing Economic Remedies

After slowly emerging from the financial crisis,the world economy has left the worst behind it.But the road ahead will by no means be a smooth one.Staggering unemployment,sovereign debt crises and inflationary jitters continue to stretch the nerves of policymakers.     

中国金融发展如何才能做到为实体经济服务

该文指出，应对未来严峻挑战最关键的步骤就是要尽快发展和健全中国的金融体系，而不能像过去那样过度仰仗货币政策被动的对冲手段来缓解。该文提出了“企业家金融”、“关系型金融”、“供应链金融”、“财富金融”、“消费金融”、“政府金融”、“国家金融”和“全球化金融”等不同的改革与发展模式来适应中国经济转型各个环节对金融服务的紧迫要求。     

China's good neighbor policy and its implications for Taiwan

Chinese leaders in recent years have been following a coherent policy toward Asia that emphasizes moderation and accommodation while preserving core PRC interests. China's prevailing ‘good neighbor’ policy approach—backed by improvement in US–China relations—provides important opportunities and challenges for Taiwan. It clearly inclines the PRC leaders to avoid more aggressive or harder‐line tactics in the mix of carrots and sticks that makes up China's recent approach toward Taiwan. To follow a more disruptive course would undermine the influence and advantage Beijing has been seeking with its ongoing moderate approach toward the United States and other Asian powers. The main challenge for Taiwan is how to deal with the current balance of carrots and sticks in China's policy. Much depends on the ability of Taiwan's leaders and populace to turn the prevailing balance in PRC policy to Taiwan's advantage. This presumably will involve reviving their economy, promoting effective governance and prudent defense, while consolidating relations with the United States and managing tensions in cross‐Strait relations to the advantage of Taiwan's future security and development. Unfortunately, there is no political consensus on Taiwan to mobilize domestic resources and opinion in a concerted effort to protect Taiwan's future as an entity independent of PRC control. Those outsiders who have followed with positive interest Taiwan's remarkable development over the past decades hope that Taiwan makes good use of the opportunities posed by China's good neighbor policy to adopt prudent and concrete measures beneficial to Taiwan's long range prospects.     

Technology and economic development: the case of Taiwan

In this paper it is argued that Taiwan succeeded in developing by deviating from the currently popular ‘Washington Consensus’ strategy in specific ways. In particular, it developed investment strategies that have now reached a crucial ‘Schumpeterian’ phase. This has important implications for high and information technology sectors. Following Schumpeter we assume that innovation in specific firms can have economy‐wide effects. Models based on this idea can be shown to have multiple equilibria. The idea of a positive feedback loop innovation system or POLIS is formalized by picking an appropriate sequence of equilibria over time. It is shown that POLIS has empirical relevance by applying the formal model to an actual economy. Recent financial crisis in many Asian countries, most notably South Korea, seems to have reversed the conventional wisdom regarding the East Asian ‘miracle’. This paper applies the concept of a POLIS to show that neither the current view that the miracle was a mirage nor the earlier contrarian view that the growth was a result of factor accumulation only is correct. Ultimately technological transformation—in particular the creation of a positive feedback loop innovation system is what makes the difference between sustained growth and gradual or sudden decline. Although various problems remain in both the real and the financial sectors, the successes of Taiwan in building the preconditions for an innovation system are worth examining. Upon careful examination of Taiwan's system of innovation within the above Schumpeterian model it is found that of all the ‘miracle’ economies Taiwan has the best chance of building a POLIS in the near future. Because of Taiwan's strength in building a POLIS, the PRC can also benefit from continuing contact with Taiwan through trade and FDI from Taiwan.     

From Financial Assets to Financial Statecraft: the case of China and emerging economies of Africa and Latin America

Over the past few decades, China has accumulated over US$3.4 trillion of official foreign exchange reserves as it rises to become a global power. Do China's financial assets increase its ability to pursue its national interests internationally? With the globalisation and rising influence of Chinese state-owned enterprises, state-owned banks and sovereign wealth fund, as well as China's growing clout in several regional groupings, it is clear that China does possess the necessary mechanisms to assert its financial power. This article examines the efficacy and limitations of these mechanisms in Africa and Latin America, in the economic and political domains. In the economic domain, China has consistently used foreign oil contracts and acquisitions to secure direct oil flow from developing nations. An analysis of recent cases shows that while China is able to successfully harness its financial power in its pursuit of oil, it needs to fulfil its promises to the satisfaction of the recipient countries in order to maintain the value of its offers. In the political domain, China has used its financial assets to purchase diplomatic allegiance from various African and Latin American countries in support of its One-China policy. Studying both successful and unsuccessful cases reveals that while China is generally able to use its financial power in third-world countries against Taiwan successfully, its national goals have, in recent years, shifted to the economic realm, even with countries that still recognise the Taipei government.     

China's Economic Advance Gives Hope to the Developing World

C HINA'S economic progress since the com-mencement of its reform and opening-up in 1978 gives hope to every developing nation that if China can do it,so can we.A 2019 report by Switzerland-based financial servic-es company Credit Suisse Group said that China was this century's champion in wealth creation and the figures it cites are truly amazing.Having successfully cushioned the impact of the global financial crisis of 2008-2009,unlike so many other nations,China has seen total household wealth rise from US $3.7 trillion in 2000 to US $63.8 tril-lion in 2018,an exponential 17-fold increment.     

The United States and China in the Age of Obama: looking each other straight in the eyes

Though the United States remains atop the world's power hierarchy, it is becoming less dominant, both because of the rise of new power centers and because the problems are becoming larger. The United States now must function in a world of relatively greater power equality and ever-larger problems springing from interdependence. The United States and China now have to look each other straight in the eyes, with the core of their relationship resting on the strategic foundation of stabilization—stabilization of the global economy, global ecosystem, and global security. This essay makes several additional points: (1) China has made some wise domestic and foreign economic policy decisions in the context of the great economic downturn of 2007–2009 that probably will increase the PRC's relative capacities coming out of the downturn; (2) US–China relations are more fundamentally sound than they have ever been before. Both nations' leaders should seize this opportunity to recast their relationship as partners in the effort to build coalitions to address the global system's most pressing challenges; and (3), even with a relatively sound strategic foundation for bilateral relations, when one moves from the general to the specific in important policy domains, it will be exceedingly difficult for Beijing and Washington to reach agreements on how to proceed on many key issues.     

A Year of Economic Recovery

As 2009 draws to a close, Beijing Review interviewed several economic experts on the performance of the Chinese economy in the aftermath of the global financial crisis. Beijing Review reporter Liu Xinlian interviewed Zhang Ping, Deputy Director of the Institute of Economics at the Chinese Academy of Social Sciences, who reflected on the overall economic performance and problems of the economy in 2009.