Monthly Archives: March 2012

Where is Chinese Outbound Investment Going? Reply

China, Finance
Investment percent gdp

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Executives leading China’s state-owned and private companies are, for the most part, new to the foreign direct investment game, and are thus likely to be conservative in their initial investments. One would assume, therefore, that those executives are likely to invest in those countries where the Chinese government enjoys strong relationships, carries some influence, and perhaps the government is prepared to provide incentives to make that investment.

Yet at the same time, Chinese firms are making high profile investments in Europe, Australia, Canada, and the United States where the specter of political opposition looms over every deal. Are companies stepping abroad looking for an umbrella from Beijing, or are they simply following business?

This is the question that Quan Li of Texas A&M University and Guoyong Liang from UNCTAD set out to answer in “Political Relations and Chinese Outbound Direct Investment.” Reviewing 346 instances of outbound Chinese FDI along with statistics from other sources, the scholars paint a compelling picture about where Chinese money is likely to flow in global mergers and acquisitions.

The patterns are not surprising, but what was surprising to me was the number: that nearly 350 Chinese companies are already players in outbound direct investment suggests that the comfort with those investments is growing. As that happens, expect cash-rich firms to get bolder with their acquisitions, looking more into North America as well as Africa, Eastern Europe, and Latin America.

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China’s Aircraft Carrier in Perspective 1

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Beijing’s “Starter Carrier” and Future Steps: Alternatives and Implications – Andrew S. Erickson, Abraham M. Denmark, and Gabriel Collins

via U.S. Naval War College | 2012 – Winter.

In this excellent review essay the Naval War College’s excellent team of China Watchers give offer a balanced view of the significance of China’s new aircraft carrier and, more important, what it portends.

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Are Chinese Intellectual Property Courts Fair? Reply

China, IPR

Lan Rongjie, “Are Intellectual Property Litigants Treated Fairer in China’s Courts? An Emprical Study of Two Sample Courts,” Indiana University Research Center for Chinese Politics and Business, Working Paper #16, January 2021.

The world is abuzz about how Chinese courts have found against Apple’s claims of the iPad trademark in the PRC, and what it will mean for both Apple and IPR in China in the future. Against what we see happening this week, it is useful to take a step back and look at the bigger picture.

In an empirical study of two courts in China, Lan Rongjie finds that for several reasons, you are more likely to get a fair trial in an IPR case in Chinese courts than in any other type of civil action.

Apparently, judges are more likely to defer to experts in such cases, and they are likely to be much more careful in rendering a verdict, especially when foreign parties are the plaintiffs.

The paper will be of scant comfort to Apple’s attorneys this week, but it does remind us that companies as varied as Louis Vuitton, Starbucks, and Lego have all won intellectual property cases against local Chinese businesses.

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Radio, Television, and Public Diplomacy Reply

Media, Policy, Strategic Communications
A reporter for RFE/RL's Afghan Service intervi...

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BBG’s Strategic 5yr Plan: to inform, engage and connect.

In the darkest days of the Cold War, the United States focused considerable effort on bringing to the world what can either be described as “the truth,” or “the truth according to the United States government ” with services like Voice of America and Radio Free Europe. We can argue about the value of these broadcasts to the people of Latin America, but it seems clear these broadcasts provided a critical information lifeline to the people of China and the countries locked behind the USSR’s Iron Curtain.

In the years since the opening of China and the end of the Cold War, however, these services have lacked the kind of clear mission they once had, and the rise of the Internet calls into question the value of broadcast services generally. I would argue, though, that America’s global broadcast assets remain a critical part of public diplomacy. Commercial enterprises like CNN and Fox News have their place, but they are not in the business of conducting information activities in support of US foreign policy.

The BBG spells out exactly why it should continue to receive funding over the next four years in its 2012 strategic plan. Admittedly awash in bureaucratese, the concrete steps it outlines take the organization a big step toward regaining the relevance it once had. Even given the glacial speed of governmental organizations, the plan is realistic and doable.

If the plan lacks anything it is a clearer vision of where the organizations need to be in 10 years. More needs to be done than what is outlined here, and both what and why need to be made clearer.

Nonetheless, even die-hard net-heads like myself cannot help but see the value of broadcast in America’s public diplomacy after reading this.

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Mines in the South China Sea Reply

ASEAN, China, National Security

“Taking Mines Seriously: Mine Warfare in China’s Near Seas”
Scott C. Truver
U.S. Naval War College Review
Spring 2012

Strategists focus heavily on the aerospace aspects of China’s “access denial” strategy, thinking about how ballistic missiles, cruise missiles, and attack aircraft could effectively seal the US Navy out of the Western Pacific. But another weapon remains that could have a similar effect in a much lower intensity conflict: sea mines.

Drop a few dozen cheap and low-technology magnetic mines around the Paracels or Spratleys, sit back, and watch the fireworks. It is an illustration that China has plenty of arrows in its quiver that could prove costly for Vietnam, the Philippines, Malaysia, Brunei, and the U.S. to address, one that demands an equally asymmetric strategy.

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Getting Navies to Work Together 1

International Relations, National Security, Strategy
Naval Command College

Flags of the home nations of the students of the Naval Command College (Photo credit: U.S. Naval War College RI)

“Networking the Global Maritime Partnership” – Stephanie Hszieh, George Galdorisi, Terry McKearney, and Darren Sutton, via U.S. Naval War College | 2012 – Spring.

This is a fascinating article that picks up on the concept first introduced by Chief of Naval Operations (later Chairman of the Joint Chiefs of Staff) Admiral Mike Mullen, wherein we  no longer see the U.S. Navy as operating in a strategic vacuum, but as a component of a “Thousand Ship Navy,” a multinational maritime force of nations who share the same priorities and can therefore be melded into a single, unified force.

I liked Mullen’s idea when he first introduced it six years ago, and I like it more now that the USN is fumbling its warship procurement efforts and other nations are expanding their naval forces (Look at the UK building two aircraft carriers as a part of a fleet renewal program as just one example.) Mullen may not have taken his ideas directly from Thomas P.M. Barnett‘s thinking about a multi-agency, multi-national response to global security challenges (as outlined in his seminal book The Pentagon’s New Map,) but the direction is the same. The U.S. may be sheriff, but it needs deputies to run the town.

The article offers some detailed ideas about the challenges and opportunities in making it happen.

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China’s Future: The World Bank Chimes In Reply

China, Economy, Policy

 

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China 2030: Building a Modern, Harmonious, and Creative High-Income Society.

That China’s economy and polity are at an historic crossroads is so often repeated these days that it has become a truism. The question that faces prognosticators is what China should do about it. Even if the lessons of economic development of one country could be applied to another, the scale, speed, and urgency of China’s economic challenges seem push the nation’s leaders onto an uncharted course.

So what to do?

In joint effort with the Development Research Center of the State Council, The World Bank has produced a China 2030: Building a Modern, Harmonious, and Creative High-Income Society laying out a series of macro-level recommendations to address the issues China’s economy is facing over the next 20 years. What the framers of that report mean, of course, is that China faces these challenges today, but it is impolitic to suggest as much. (To suggest that the United States could also use such guidance would be similarly impolitic but no less accurate.)

What is compelling (read “different”) about this report is the participation of the Chinese government in the process. For that reason alone, the report is worth the read for the insights it should give into the kind of forward thinking that is “permissible” in the current policy environment.

The work has already been criticized for not addressing CCP politics and the role of the Party in the policy process. What I wonder about is the extent to which the World Bank was compelled to pull its punches on its recommendations

in order to retain the government’s participation. At a conference reported by Bob Davis ofThe Wall Street JournalWorld Bank Group President Robert Zoellick was fairly optimistic about both the resilience of the Chinese economy (“stress points will expand over time rather than turn into a crisis”) and about the possibility that some if not all of the reports recommendations would be carried out (“I think that in some form you’ll see this move ahead.”) That does not sound like a man doling out bitter medicine.

If the medium is the message, though, and this report does have legs, it may be as important as China’s own vaunted 12th Five Year Plan in helping to divine the future of China’s economic policy.

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Japanese Science: Anything but Foreigners Reply

Education, Japan, Policy • Tags: , , ,
Kyoto University, one of the most prestigious ...

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“Revamp Math and Science Education, Kazuo Nishimura, AJISS-Commentary

The Japanese Institutes of Strategic Studies, a conservative think-tank in Tokyo, has published this op-ed by Kazuo Nishimura, a Professor of Mathematical Economics at Kyoto University.

In the op-ed, Nishimura calls for starting science education earlier, changing the structure of elementary courses, and keeping high-school kids in compulsory science courses longer in High school. More controversially, he also calls for a complete overhaul of the nation’s grading system.

All of these are good proposals, especially the latter, but the one policy Nishimura shies form is the one most likely to make a difference in the near term: allowing greater numbers of foreign scientists to come into Japan to work and offer their efforts to Japanese companies. Indeed, he believes this is the problem.

A fascinating article.

Top Picks from AFRICOM Reading List 1

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Reblogged from U.S. Africa Command Blog:

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Maintaining up-to-date information and deep knowledge about Africa is critical to the team at the U.S. Africa Command. To that end, a reading list was compiled to provide suggestions. Here are some top picks. Check the blog next week for the full list.

Thanks to the AFRICOM Research Library for providing us with this list. Look for an upcoming story on the library, new to Kelley Barracks.

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An excellent list for someone looking to build core knowledge about what is happening in Africa.