Allgemein, PRIMO

Rising Powers and International Relations in 2017 – Issues on the Horizon

[I curated this piece was curated for the PRIMO blog and contributed to the section on China]

2016 was a tumultuous year across the globe. Political unrest in Turkey and Brazil – one attempted coup, one political “coup” successful in ousting President Dilma; both countries, along with China and Russia, faced increasing economic challenges, albeit in different areas and to different degrees; the World Trade Organization (WTO) remained in dead lock; the UK voted to leave the European Union; and President Trump’s election in November heightened fear of growing protectionism. After all this, what is in store in 2017?

Surely, 2017 will see many of last years’ challenges develop and mature. Brazil and Turkey will have to deal with deteriorating security situations in addition to economic and political challenges. But will 2017 bring more clarity regarding “Brexit”? What will be the impact of Trump’s policies on the Rising Powers, in particular China and Russia? Will the WTO be able to make a comeback as an important forum for global trade negotiations? And who will take leadership in global affairs?

The following contributions by our PRIMO fellows outline the most important domestic and international issues that these countries and organisations face this year. Read on for outlooks for Brazil, China, Russia, Turkey, the UK, and the WTO in 2017.

 

China
(by Insa Ewert, Fleur Huijskens, and Mingde Wang)

In China, the 19th Party Congress, progress of economic reforms, as well as China’s response to US policy and its economic diplomacy will shape the Year of the Rooster.

The outcome of the 19th Party Congress, to be held in fall, will determine China’s policy direction for the following five years. Crucial issues are the expected leadership transition, confirmation of the main party line, and introduction of new ideological positions. Having reached the official retirement age of 68, a large part of the 25 members of the Politburo are expected to retire, including five out of seven Politburo Standing Committee (PSC) members, China’s top leadership body. The two leaders President Xi Jinping and Premier Li Keqiang will remain.

Xi’s elevation to ‘core’ leader at the Sixth Plenum of China’s Central Committee in October 2016, an honour previously granted only to Mao Zedong and Deng Xiaoping, enhances Xi’s power and gives him greater room to promote the people of his choosing.

These developments are decisive for China’s direction during Xi’s second term and determining China’s reform progress. While reform-minded appointments could influence Xi, quite a few of the current Politburo members are considered liberal minded, but they have had limited impact in the past five years.

Since President Xi announced supply side reform in early 2016, Beijing outlined five major tasks to tackle the Chinese economy’s structural problems, including overcapacity, overstocked products, and high debt levels. However, overseas commentators lament insufficient improvements due to the lack of clear direction. In contrast, the government affirms substantial progress and further deepening of reform in 2017, with priority given to merging and re-organising “zombie firms” in the steal and coal industries, and “de-stocking” over-supplied properties in the housing market.

Deviant voices point to continued slowdown of the economy and Beijing’s inability to achieve its strategic goals as a result of retreating foreign investment, the investment-driven growth model (particularly through real estate), and the resurgent debt level of state-owned enterprises. However, pro-government voices also predict increased uncertainty about this year’s reform outcome, largely due to challenges arising from US policies under the Trump Administration – one of the priorities for China’s foreign policy in 2017. Contentious issues include the conflict in the South China Sea, questioning the One-China policy, and economic policies.

While policy-makers in both China and the US recognise the dangers of a potential trade war, the US will likely introduce some new economic measures such as increasing tariffs. However, US protectionism presents a chance for China to present itself as the new leader of economic globalization. Negotiations over the RCEP (Regional Comprehensive Economic Partnership) between China and 15 Asian countries are accelerating and, with the US revoking participation in the TPP, possibly drawing (near) to conclusion.

Further Chinese-led initiatives such as “One Belt, One Road” (OBOR) and the Asian Infrastructure Investment Bank (AIIB) will expand: a forum for international cooperation on OBOR will be held in Beijing this May, and 25 new countries from Europe, Africa, and South America plan to join the AIIB later this year. Thus, there is a window of opportunity for China to take a leadership role in the global order, but 2017 will also show how much action will follow the rhetoric.

 

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Allgemein, PRIMO

The US Elections – Views from Rising Powers and Europe

[I edited this project for the PRIMO blog and contributed to the section on China]

PRIMO fellows have spent the last two years trying to make sense of the changes currently taking place in the configuration of the world order. Last week’s election in the United States will most certainly influence these changes — the question arising is: how? For Francis Fukuyama, this election represents a critical juncture: many countries are returning to populist nationalism, because the benefits of the liberal world order with its global value chains — despite fuelling global growth and facilitating movement of goods and people — have not filtered down to everyone.

Indeed, in many of the countries represented by the PRIMO Network, Trump’s victory has been welcomed. In particular, rising powers that have demanded a larger say in the international system may welcome an America led by Trump, as the power of the US is seen to further decline, and as a less interventionist foreign policy strategy may be adopted. Similarly, representatives of right-wing parties and governments in Europe have celebrated Trump’s win. Surprise at the election outcome was most noticeable in Germany and Turkey, but many governments and observers are worried about their own security, global stability, and the possible economic effects that an increase in protectionist policies may bring about.

The following contributions show that most leaders remain cautious, as there is little certainty over Trump’s course of action. Who will take up positions as Trump’s advisers? Which campaign promises will he be able to deliver on? To what extent will Congress, the federal structure of the US, and the courts act as constraining powers? The answers to these questions remain to be seen.

Read on for responses to Trump’s victory and insights from Rising Powers (Brazil, China, Russia, and Turkey), an economic view from the BRICS, as well as views from Europe (Germany, Italy and the Visegrád 4).

 

China
(by Insa Ewert and Mingde Wang)

China seemed less surprised by Trumps’s victory than other countries. Commentators contend that the largest challenge for the Chinese government may lie in the uncertainty of Trump’s China policies and possible advisers, and whether Trump can deliver on his campaign promises. For instance, Trump has repeatedly threatened a trade and currency war with China. Fuelled by expectations that TPP will not be ratified, Beijing is moving forward with its plans for an Asian-Pacific Free Trade Area.

While on election day, media coverage was scant, an official commentary appearing on the day after Trump’s victory in People’s Daily, the mouthpiece of the CCP, depicts the results of the US election as confusing and unstable. To its domestic audience, anger, riots, and racial and social divisions in the process are cited as evidence of deep social contradictions in the US as well as the dilemma in and fragility of American democracy. Regarding the implications of Trump’s presidency for US foreign policy, both People’s Daily and Global Times, which often represent hawkish voices within the CCP, perceived changes along with greater uncertainty, and consider the Trump administration a destabilising factor in world politics. According to published media interviews, even though a variety of top analysts from China’s leading IR institutes have generally suggested the unpredictability of the election’s long-term impact on China’s foreign policy interests at the current stage, they are more or less concerned with the “businessman nature” of the President-elect, and an increasing pressure from the US for China to make more economic concessions.

Snapshots of interviews with people in Beijing and Shanghai reflect worries that as a businessman Trump might not understand politics. However, as a businessman, he is also widely admired and his TV show The Apprentice is quite popular in China. A poll by the South China Morning Post revealed that 39% of the respondents favoured Trump – a higher percentage than in other Asian countries, where Trump only scored around 13%. The paper concludes that even though Chinese people are not too keen on Trump either, they also do not approve of Clinton. This Chinese view seems largely consistent with public opinion, media coverage, and other polls.

 

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Allgemein, PRIMO

PRIMO Life: Working with Jaguar Land Rover

As part of my training within the PRIMO network, I completed a secondment with PRIMO’s private partner Jaguar Land Rover (JLR) from December 2015-February 2016. The study I conducted during this time for JLR looks at regional trade agreements and how these might affect the business strategies of globally operating businesses like JLR. Due to my dissertation topic, which focuses on trade and investment negotiations between the EU and China, I was familiar with the academic literature on trade regimes and had interviewed many policy-makers in order to understand the policy-making processes involved in negotiating trade agreements. To understand and learn about the considerations of and affects on a globally operating business was a great addition.

During the project I was mainly based in Brussels, working closely with JLR’s government affairs department. In Brussels I had the opportunity to meet with representatives from the car industry, business associations, and policy-makers involved in the negotiations of trade agreements. In January, JLR invited us to their headquarters in the UK to meet with different departments and learn more about how the business operates. We thus met with representatives from a variety of business areas, from regulatory and homologation experts over business expansion to economists. Finally, we had the opportunity to present the results of our research to JLR managers. The meetings were tremendously helpful to understand how JLR as a business operates, what information the business actually needs and how it must be presented in order to be understandable and useful– to be sure, very different than in academic settings. We were also invited to tour one of the factory sites. Even though this unfortunately did not include driving one of the new sports cars, we were able watch the whole manufacturing process, which was quite fascinating.

As this was my first experience working with a globally operating business, I was able to gain valuable insights for my professional future. Of course, I learned a lot about the automotive industry in general and JLR in particular. In addition, it was great to see robots building cars, and to learn how and in what ways research skills can be useful for a business, and to understand the difference between how scholars in International Relations discuss trade regimes in contrast to how these trade regimes impact companies in practice.

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