Showing papers in "International Journal of China Studies in 2016"

How Much "State" Is in China's State Enterprises? A Case Study of ZTE Corporation in an Era of Reform

Abstract: 1. IntroductionThe state has played a dominant role since the establishment of the People's Republic of China in 1949, with this role fulfilled by state enterprises since 1978. Reform of state enterprises was a central area of reform in the country's transformation towards a socialist market economy. One product of this reform is that it is very hard to characterize a state enterprise in China today. Some enterprises are 100% owned by the state, while others are partially owned with varying degrees of state control. Some are held by a state enterprise which is a subsidiary of another state enterprise. In addition, there are enterprises over which the state has control despite having less than a controlling ownership share. Because of the complicated ownership of these enterprises, as well as an unclear link between ownership and control, characterizing state enterprises is not a simple matter.This situation raises questions that have implications for both the applicability of theory as well as the meaning of state enterprise as currently understood. The western concept of public enterprise is defined by ownership, whether in whole or in part, by the state. Through ownership, control is exercised. To the extent it is the latter which really matters for the state, two related questions are, first, how control is exercised, and second, how does this control affect enterprise performance. Existing theories answer the latter question by pointing to the inferior performance of state enterprises compared to their private counterparts.Gaining insights into the above issues in the China context is the overarching objective of this paper. The specific objectives are to: (1) clarify the meaning of state and state enterprise in the Chinese context, (2) assess the applicability of extant Western theories of public enterprise in light of (1) above, (3) link the complexity of Chinese state enterprises ownership and control and performance to the reforms that brought the situation about, and (4) view all the above through analyzing the case of ZTE Corporation, a large enterprise officially classified as a "state-holding enterprise".In the next section, we provide through a brief literature review the extant theoretical framework underlying this paper, making the case that the Chinese state does not necessarily conform to this framework. A review of China's state enterprise reform that has produced the types of enterprises today is undertaken in section 3. Using a case study approach, we profile in section 4 ZTE Corporation, relating its development to the reforms mentioned earlier. The discussion is centred on the evolution of the magnitude and nature of state ownership and control. How these links with the state impact enterprise performance is the subject of section 5. The concluding section 6 draws together the main findings and highlights several implications, including for the application of existing theories.2. Theoretical Underpinnings: Contestations of the Role of the Chinese StateWestern models have been extensively applied to China's state sector. These models, based on agency theory, property rights theory, public choice theory and neoliberalism, argue against state ownership of enterprises. Agency theory postulated that there would be interest conflicts between the principal and the agent if their interests diverged (Bebchuk and Fried, 2004). Property rights theory implied that the more direct and strengthened were the rights to the property, the better its assets would be used (Alchian and Demsetz, 1973). Public choice theory then argued that when politicians and government officials represented the state to manage public resources, they would give priority to their own interests instead of public interests that state enterprises were to cater to (Tullock, 1987). Finally, neoliberalism emphasizes the efficiency of private enterprises since private sectors face competition and open markets both of which lead to efficiency. …

The 21st Century Maritime Silk Road and China-ASEAN Industry Cooperation

Abstract: 1. The Motives of China Proposing the 21st Century Maritime Silk RoadWhen Chinese President Xi Jinping visited Kazakhstan on September 7th of 2013, he first raised the initiative of jointly building the Silk Road Economic Belt with European and Asian nations; and when he visited Indonesia on October 3rd of 2013, he then raised the initiative of jointly building the 21st-Century Maritime Silk Road with ASEAN countries. These two grand initiatives together have since then been referred to as the Belt and Road Initiative. On March 28th of 2015, the Chinese government officially published the Vision and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Road (hereinafter referred to as the Vision and Actions), which has rapidly grasped attentions from all over the world. The background of proposing the Belt and Road initiative, especially regarding "the Road" initiative, is based on two aspects: first, China has today become a major maritime country, and it is marching to become a great maritime power. This is incomparable to the 1990s, so maritime cooperation must be put on the agenda of China's foreign policy. Second, this initiative is mainly based on the unique maritime geographic location of Southeast Asia, and therefore is specifically targeting at ASEAN. The new Maritime Silk Road will be extended to the Indian Ocean and Europe, but ASEAN will still be the top priority.The Belt and Road Initiative is not just a domestic development strategy but an international initiative mainly aiming at developing countries in Asia. So, what are the main reasons for China to propose such a vital and grand initiative?First, from the political perspective, the Belt and Road Initiative conveys China's idea for a peaceful world and its open-mindedness. Two thousand years of ancient Maritime Silk Road has spread Chinese civilization and the ideas of peace, openness and inclusiveness of the Chinese nation. These ideas are still adhered to by the new generation of Chinese leaders in their governance. Through the construction of the Belt and Road, China will provide development opportunities for Asia and the whole world, share the achievements of development with all nations, and construct broader areas of mutually beneficial relationships. The Belt and Road Initiative adheres to open regionalism and respects and employs the existing regional cooperation mechanisms. The Initiative will not engage in closed regionalism and is not targeted against any third party. Countries along the Belt and Road can participate voluntarily, contribute according to their abilities, and share the benefits.Second, from the economic perspective, the construction of the Belt and Road is also an effective channel both for China to transfer overcapacity, and for the Asian developing countries to accept the transferred industries. China now has accumulated huge infrastructure production capacity. Industries such as iron and steel, cement, plate glass, electrolytic aluminum, shipbuilding, wind power equipment and building materials have been saturated in the domestic market, which need to be transferred abroad. These high-quality industries are facing overcapacity issues in China, but they are needed for the economic development of the developing countries along the Belt and Road. So, this is a win-win path for both sides.Third, from the social and cultural perspective, the Initiative will facilitate cultural exchanges between China and countries along the Belt and Road, increase output of Chinese cultural industries, and enhance China's cultural softpower. The Belt and Road Initiative is not simply a concept of transportation corridor; it involves a full range of communication activities 377 along the lines of economic cooperation, technology and culture, which will promote people-to-people communication and the establishment of an Asian community.2. The Groundwork and Advantages of China-ASEAN Industry Cooperation under the Belt and Road InitiativeFor ASEAN countries, the Belt and Road Initiative is about the 21st Century Maritime Silk Road, but the Initiative also has a land connectivity component. …

Globalizing the Chinese Social Assistance Program: The Authoritarianism That Listens?

Abstract: (ProQuest: ... denotes non-US-ASCII text omitted.)1. IntroductionAuthoritarian regimes are not known for listening to their subjects, particularly to those politically marginalized social groups. When the situation gets sour and they have to pay attention, authoritarian rulers commonly resort to two instruments in their toolbox of political control. repression and bribe. Whenever force becomes too costly, cash benefits would buy off the dissatisfied population at rough times.It is against this common perception that China's recent development of welfare protection for the poorest seems puzzling to the conventional understanding of authoritarian regimes. The figure below shows the changing trend of the social assistance program targeting the very poor in urban and rural areas and the traditional pension program for retired government employees at both the central and local levels. Whereas the spending level for the latter group have fluctuated over time, it remains largely constant compared to that for the poorest, who see their benefits increase drastically from the late 1990s.This is indeed surprising, particularly given that the political structure in China has remained largely unchanged. Why, therefore, would an authoritarian state compensate the politically powerless in the absence of institutionalized channel of representation? Political stability is an easy answer and it is indeed a critical factor to compel most authoritarian rulers to be careful in mistreating its subjects. Yet, the steady increase of the spending level on the poorest since the late 1990s in contrast to the unimpressive change in pension spending is at odds with the fact that these retired government employees are politically powerful in defending their interests. We cannot assume that this group of individuals would be indifferent seeing their government transfer the money to their politically inferior counterparts while ignoring their own well-being against market fluctuation and inflation.Furthermore, as will be discussed in detail later, is that the program is evolving along with a remarkable process of institutionalization - in spite of various problems and shortcomings associated with the program, the institutional foundation has been well established to cover almost the entire population and overcome the urban-rural divide. This poses another question: Why would an authoritarian regime, instead of using cash benefits, make long-term commitment to compensating the poor through institutionalized measures that would apparently tie their own hands?In revealing the mechanism of institutional origin and change of China's social assistance program, I attempt to offer a theoretical model that emphasizes the interaction of global and local dynamics, through which the government is induced to utilize institutional instruments to protect the poorest social sectors for its own political survival. Specifically, I argue that economic integration produces an equalization effect on the wage differentials and risk perceptions among different sectors and social groups. As wage and risk gaps get narrowed, the demands for welfare protection across different sectors as well as their ability to exert political pressures on the ruler become increasingly similar, which induce the ruler to listen to the demand of every social sector. I suggest that this is a structural condition introduced by globalization that has produced a world-wide welfare transformation that, as Economist (2012) aptly claims, even turns the East Asian tigers into marsupial.Precisely because of the authoritarian nature of the regime that tends to offer lip service to the sectors outside of its core constituency, the political elites are particularly motivated to tie their own hands through institutionalizing welfare protection in order to ensure that an effective welfare system can supplement their efforts of building a competitive economy. On the other hand, the enabling effect of economic integration cannot be realized without the suitable local conditions that make political leaders particularly vulnerable and therefore more motivated to expand their political base through institutionalized protection. …

Culture and Commerce: China's Soft Power in Thailand

Abstract: 1. IntroductionRecent literature shows that the implementation of the Confucius Institute (CI) programme is part of China's soft power policy and aims to raise the nation's international profile along with its increasing economic role in the world, despite the controversy about China's cultural expansion abroad serving its own national interest (Guo, 2008; Lo and Pan, 2014; Leung and Du Cros, 2014; Gil, 2015). Evidently, the CI debate has drawn scholarly and critical attention on how China's soft power should be perceived.Developed by Joseph Nye, the term "soft power" describes the ability to shape the preference of others through appeal and attraction. Whereas hard power is exercised through military and economic forces, soft power relies on the attractiveness of a nation's culture, political values and foreign policies (Nye, 2004: 5, 11). In the case of China, officials and scholars went beyond Nye's traditional definition of soft power and interpreted the concept in their own, broader terms.1 Kurlantzick (2007: 6) notes that Chinese soft power includes more coercive economic and diplomatic levers such as aid, investment and participation in multilateral organisations. Lai and Lu (2012: 30) broaden the term "soft power" to include multilateral diplomacy, economic diplomacy and "good neighbour" policy. In a speech given to members of the Chinese Communist Party (CCP), former President Hu Jintao and current President Xi Jinping highlighted several methods by which China could exert influence through soft power.2 The concept of soft power proved highly popular among Chinese leaders, scholars and journalists, as can also be judged from its prevalence in Chinese media (Li, 2008: 287). It therefore played a crucial role in shaping China's international political strategy.Despite the significance of this notion in the case of China, the context that either generates or hinders the growth of soft power is understudied. Ferguson (2003) noted that not all non-traditional forces, such as cultural and commercial goods, can influence world affairs. For instance, it does not make sense to say that children all over the Islamic world love the United States just because of American fast food and pop culture. In this sense, Li Mingjiang (2011: 1-18) challenges the received idea about how the resources of power are used: culture, ideology and values can be used for coercion, and military and economic strength can be used for attraction and appeal. In this light, the study of the economic, political, social and cultural context of a host country should be encouraged as a crucial step to better understanding and assessing China's soft power.Drawing on empirical data including academic literature, official and media reports, and interviews with the people involved, this article examines the growing presence of China on a global scale, with a particular focus on the context of Thailand - an influential player in Southeast Asia and an ally of the United States - as a case study of Chinese diplomatic practices. The paper also argues that the increasing Chinese influence in Thailand is also driven by the historical background of close Sino-Thai relations, by Thailand's economic interests as well as by the role of ethnic Chinese communities in Thailand. In other words, the context of Thailand as a host country facilitates the existence and functioning of China's soft power. To detail the environment that enabled the considerable progress of China's soft power, this article begins with the historical canvas that shaped Sino-Thai relations. In a second stage, it examines the expansion of China's soft power due to non-governmental or people-to-people activities (e.g., tourism), and the increasing use of policy tools (such as education and media) for public diplomacy. Finally, it presents a few challenges and expressions of China's soft power in Thailand, strongly reflecting the role of Chinese governmental organisations and their ties with Thailand's ethnic Chinese communities. …

Enabling African Regional Infrastructure Renaissance through the China-Africa Partnership: A Trans-Continental Appraisal

Abstract: 1.IntroductionThe China-Africa partnership in socio-economic and political development has continued to strengthen since the early contacts between China and the African continent during the voyages undertaken by Admiral Zheng He in the early 15th century (see Harris, 2003; Jinyuan, 1994; Liu et al., 2014; Vhumbunu, 2014; Wade, 2005; Yoshihara and Holmes, 2008). Since the attainment of independence in Africa, most countries on the continent partnered China in different areas of cooperation which intensified at the turn of the millennium following China's "going out policy". This fittingly complemented the equally intensifying African regional integration initiative whose approach followed the path of consolidating Regional Economic Communities (RECs) for the eventual integration of the continent into the African Economic Community (AEC) through a 34-year process as set out by the AEC Treaty (Abuja Treaty) of 1994. The Abuja Treaty foresees a fully integrated African Economic and Monetary Union with a single African currency, and an African Central Bank in the year 2018, having transformed through the various stages of sectoral integration, harmonization of policies, establishment of common markets (CMs), Free Trade Areas (FTAs) and Customs Unions (CUs) within RECs at first, and later at the continental level (Organization of African Unity, 1991).One means of accelerating this continental integration initiative has been through the physical integration of the 54 African states through infrastructure development in the form of regional roads, railways, airways, waterways, energy infrastructure, among others. Since the construction of the landmark Tanzania-Zambia Railway Project, also referred to as the "Great Uhuru Railway", constructed between 1968-1976 to link the Zambian town of Kapiri-Mposhi and Tanzanian port of Dar es Salaam, the China-Africa partnership has strengthened, with China involved in several regional projects across the continent. This paper explores the major transnational or regional projects that have been undertaken through the China-Africa partnership at the turn of the millennium across the continent. It is organized as follows. Section two will focus on the historical context of the TAZARA project and its significance to the transformation of the China-African partnership in infrastructure development. The third section explores the post-TAZARA frameworks for China-Africa partnership on infrastructure development. A critical assessment of infrastructure development projects that are regional/trans-boundary in nature that have been delivered within the framework of China-Africa partnership are presented in section four of the paper. The fifth and sixth sections of the paper focus on the prospects for the China-Africa partnership for infrastructure delivery and recommendations respectively.2.The TAZARA Project: Its Significance to the China-Africa Partnership TransformationThe history of China-Africa partnership in infrastructure development is usually traced back to the grand TAZARA project which stretched for 1,860 km from Dar es Salaam to the Zambian town of Kapiri-Mposhi. The TAZARA was a regional infrastructure project that linked Central and Southern African countries with East Africa thereby laying the foundation for closer inter-state cooperation, trade, and tourism between and amongst countries within these three African regions.The railway was constructed by the China Engineering Construction Company (CECC) through an interest-free loan repayable in thirty years amounting to Yuan 988 million (around US$500 million at that time) from the Chinese Government. According to the Tanzania Zambia Railway Authority (2016a), the loan was extended to cover costs of railway line construction (including 320 bridges, 22 tunnels and 2,225 culverts), supply of motive power and rolling stock, steel rails, equipment for signaling, cement sleepers, construction of stations, construction of a training school, workshops, and other related infrastructure in addition to 15,000 to 50,000 Chinese labour force (see also Arewa, 2016: 137). …

Understanding the Economic Diplomacy between the Philippines and China

Abstract: 1.IntroductionAs the Philippines-China maritime tension escalated, various sectors flagged concerns on possible economic coercion by China. The constraining of trade, blacklisting of Philippine companies in investment bids, negative tourist advisories are just a few fears. On the other hand, questions have been raised on whether the Philippines will diversify away from China or resort to a nationalist boycott. While exploring the Philippines' vulnerability to possible sanctions from China and reactions is a burning question (Clemente, 2014), this research note seeks to shed light on the pattern of bilateral economic diplomacy to contextualize within this picture, China's actions towards the Philippines. Government planners may use the research to reconsider the Philippines' economic strategies in the context of national security and better understand China's economic statecraft.Using official primary documents on agreements such as treaties and communiques, a meticulous content analysis in processing qualitative content was applied. Secondary sources such as reports, news and commentaries were used as supplementary material in ascertaining information where access to primary content was limited. Agreements that related to economic diplomacy were then coded according to a classificatory instrument that allowed the framing of interests in an economic diplomacy spectrum where commercial gain and stability are binary extremes.The next section presents data on the bilateral economic engagement in trade, investment and official development assistance. The third section analyses patterns in the bilateral agreements. The fourth section provides a brief word on new questions pertaining to China's recent grand initiatives. The paper ends with closing remarks.2.Trade, Investment and Aid: What the Numbers Confess2.1.TradeTrade with China proceeded at a glacial pace since 1975, but it leaped forward sharply in the 21st century. Except for the drastic dip associated with the global financial crisis, the relative uptick in trade is a fairly recent phenomenon. Figure 1 shows that both exports to and imports from China likewise started surging in the beginning of the 21st century except for the large dip in exports owing to the global financial crisis. It is noteworthy that when advanced economies in the West took a hit, this meant that China's major export markets were compromised. Philippine exports posted a sizeable drop as Philippine exports were linked to China's exports to the West (Tong and Chong, 2010). The pattern of imports relative to exports shows that China has increasingly become important to the Philippines, owing to the fact that buyers of Philippine commodities are more diversified. While Philippine exports to China are more volatile, imports from China have been more stable. The balance of trade between the Philippines and China posted a deficit from 1975-2001 except for 1977. During the years 2002-2011, the balance of trade yielded a surplus except for the years 2004 and 2009. Curiously, the deficits in 2012-2015 raised concerns that they were caused by the maritime tension. The figures for 2013-2015 indicate the three highest deficits in the economic relationship.However, China's trade with the Philippines constitutes a small proportion of its total trade with the Association of Southeast Asian Nations (ASEAN) and an even smaller proportion of its trade with the world. Zhao (2013) contends that the Philippines did not take a proactive stance in crafting Free Trade Agreements (FTAs) with China and other economies. This view is consistent with the observation that the Philippines merely adheres to multilateral trade agreements rather than paves its own inroads. It is therefore not a surprise that relative to other nations in ASEAN, bilateral trade and investment with China have proceeded slowly. The value of China's imports from the Philippines is the least among the economies in the ASEAN 5 (Indonesia, Malaysia, Philippines, Singapore and Thailand) but it happens to be greater than what it imports from Vietnam (Figure 2). …

Factional Pull: Measuring the "Tuanpai Effect" on Elite Formation from 1992 to 2012

Abstract: (ProQuest: ... denotes non-US-ASCII text omitted.)1. IntroductionFactionalism is perhaps the most iconic element defining Chinese Elite studies since its debut back in the early to mid-1970s (Nathan, 1973; Tsou, 1976). Countless studies have since tried to assess the role of factions in Chinese politics using both qualitative and quantitative methods (Bo, 2007b; 2010; Choi, 2012; Fewsmith, 2013; Huang, 2010; Huang, 2000; Kou, 2010; Lam, 2007; 2010; 2015; Li, 2013; Miller, 2011; 2013; Shih et al., 2012; Wang, 2006), be it from a "winner-takes-all" (Tsou, 1976) or a "balancing" approach (Nathan, 1973; Bo, 2007a; 2009).1 Criticisms have also been raised regarding this notion and its usage as an independent variable to analyze Elite formation (Breslin, 2008; Zeng, 2013). More studies have since started to emphasis leadership institutionalisation (Kou, 2010; Zeng, 2013; 2014). However, some like Fewsmith (2013) and Shirk (2002) question this assumption. Even if we can observe an on-going standardization, factions will remain of importance for the foreseeable future in Chinese communist Elite formation.Our inquiry focuses on one of the main forces currently active on the Chinese political landscape: the Chinese Communist Youth League [CCYL] (Zhongguo Gongchanzhuyi qingniantuan, ...).2 Structured around a Party mass organisation totalling around 90 million members back in 2014 (People's Daily, 2014), the tuanpai (??) "recruitment channel" or faction has produced 38 of the 399 new Central Committee members since 1992,3 out of which seven have then become Politburo members. Considering its non-negligible importance in terms of top Elite formation during the last two decades, the objective of the article is to attentively measure how the tuanpai variable operates (e.g. how does it influence career and promotion patterns? Where does it lead?, etc.).I posit that the Gongqingtuan - insofar as it is a promotion channel - is an intermediate variable that is likely to be associated with some other core determinants pivotal for Politburo membership, which includes for example holding provincial chief positions (Bo, 2007; 2009; Li, 2005). The latter is also likely to allow for continuously faster promotion thus making its member more "promotable" than non-tuanpai individuals. However, this accelerated career track, all things being equal, does not exonerate one from having to go through a certain "path" in order to be promoted.In turn, we expect these individuals to be better positioned and promoted faster than their non-tuanpai counterparts and to exhibit a certain ability to "sprint", even just a bit faster than other Cadres, thus impacting their career path and role in the Party-State apparatus.Therefore, one of the main objectives of this article is to measure the influence - through statistical analysis - of the tuanpai variable on promotion patterns and to see how and when the latter becomes relevant for top promotions (i.e. where and how far can each selected indicator can take an individual to?). This research attempts to do so by comparing career patterns of tuanpai and non-tuanpai individuals in order to see how and when, by examining samples from 1992 to 2012, each of the defined tuanpai variables take "traction" (i.e. when during a Cadres' career the selected position plays a role).As such, the main contribution of this article lie in its reassessment of the tuanpai variable's influence on Elite formation. It is important to note, this article proceeds from a top-down approach and focuses on trends and shared characteristics instead of focusing on each individual's account. This work, which remains exploratory in nature, encompasses a limited number of variables commonly found in the Chinese Elite literature while leaving some (e.g. impact of economic performance [Landry, 2003; Li and Zhou, 2005] and education [Li and Whyte, 1990] on promotion) aside for the time being.2. Faction or Structure: a Brief Look Back at the Chinese Communist Youth LeagueFounded in 1925, the Chinese Communist Youth League (CCYL) focused on student recruitment and on expending teachings of Marxism-Leninism to workers, peasants and students in order, at first, to mobilize them for the revolutionary effort. …

China's Dilemma in the South China Sea and the Arbitration Tribunal - Implications on China's Regional Strategy in Southeast Asia

Abstract: 1. IntroductionAs President Xi addresses the Central Working Meeting on Neighbourhood Diplomacy in October 2013, he attached priority to improving relationship with regional countries, which was crystallized in the four attributes namely amity, sincerity, mutual benefit, and inclusiveness (: "qin, cheng, hui, rong"). It is noteworthy that this work forum focusing on the specialized topic of China's periphery diplomacy followed a number of important Poliburo study sessions aimed at refining China's diplomatic strategy, notably the study session on overall diplomacy in January 2013 and another study session on maritime strategy in July 2013 (Health, 2013). Southeast Asia was also the first destination for President Xi to launch his vision of a shared destiny community where both advantages and disadvantages exist for China in advancing the idea of regional cooperation based on ancient heritage and future-oriented outlook.The paper attempts to examine China's management of the dilemma following the verdict on the South China Sea disputes for the sake of China's security needs and development interests. It serves as a reminder for China not to undermine the hard-won amity and friendship over the territorial disputes, but aimed at building up its relations with the ASEAN counterparts in Southeast Asia and safeguarding a stable international environment along its periphery instead. The paper argues that China will find itself engulfed in vicious cycles of dilemma caused by the deepened mistrust within Southeast Asia unless a new mindset and creative practice to existing problems between China and other claimants is adopted by Beijing leaders in enlisting support for managing the South China Sea disputes peacefully, ensuring China's rise is not coercive and at the expense of the rest of the region.The paper is structured into three main parts. Firstly, the paper attempts to locate the South China Sea in China's foreign policy during Xi Jinping's era. Second, the paper summarizes the Permanent Court of Arbitration's award and discusses China's changing responses to the Arbitration Tribunal in the past several months. Third, the paper envisions a better future for China-ASEAN strategic partnership should a new approach be adopted and integrated in China's grand strategy to address the South China Sea's territorial and maritime disputes with ASEAN claimants and project its influence in Southeast Asia, instead of tactical responses.2. The South China Sea in China's Foreign Policy during Xi's Era2.1. Main directions in Chinese foreign policy since the 18th Chinese Communist Party (CCP) CongressChina's policy has largely been shaped by its strategic goals, especially the two centennial goals to achieve a well-offsociety set by 2021 and global ascendancy by 2049 respectively. The Chinese Communist Party (CCP) leaders believe that China should take advantage of strategic opportunities in the early 21st century to achieve historic goals, turning China into a global superpower under the CCP's leadership. Those strategic objectives have been articulated in the CCP documents, namely: (i) to create more favourable conditions for ensuring an international security environment characterized with unpredictability and uncertainty, deepening economic ties with Asia to extend the "period of major strategic opportunity" and smoothing China's "peaceful rise/development" with Chinese characteristics of "no hegemony, no expansion, and win-win cooperation strategy"; (ii) to accelerate the modernization of national defence and armed forces to respond to China's core national security needs and its development interests, addressing both traditional and non-traditional security threats, and to play an active role in international political and security fields commensurate with China's international standing; (iii) to create a beneficial environment for "realizing the mighty resurgence of the Chinese people, the complete unification of the country", the "complete rise of China" and "a defender of a Harmonious Asia Pacific" in the long term (2020-2050) (Health, 2013). …

The Challenge of Conflict Resolution in the South China Sea Dispute: Examining the Prospect of a Stable Peace in East Asia

Abstract: The problem of peaceful change is in national politics, how to effect necessary and desirable changes without revolution and, in international politics, how to effect changes without war.1E.H. Carr, 19391.IntroductionLocated in the heart of Southeast Asia, the South China Sea is a semi-enclosed sea surrounded by China and several small and militarily weaker Southeast Asian powers such as the Philippines, Vietnam, Malaysia, and Brunei. Since the mid-1970s, these littoral states have been involved in a chronic competition as each one seeks to extend its sovereignty and jurisdictional claims over more than a hundred islets, reefs, and rocks and their surrounding waters. The South China Sea dispute, however, hibernated in the late 1990s and the early 21st century after China and the Association of Southeast Asian Nations (ASEAN) signed the 2002 Declaration on the Conduct of Parties in the South China Sea.The maritime row, however, flared up again in 2009 when China assumed an assertive posture and consolidated its jurisdictional claims in the South China Sea by expanding its military reach and pursuing coercive diplomacy against the other claimant states.2 China increased its naval patrols (using submarines, survey ships, and surface combatants) in Japan's Exclusive Economic Zone (EEZ) and territorial waters, and intimidated foreign oil companies that tried to operate in the South China Sea.3 Since 2009, it has shifted its strategy from delaying the resolution of the dispute to one that emphasizes its sovereignty over the contested waters, to deter other claimant states like the Philippines and Vietnam from cementing their claims and to negotiate with these small powers from the position of strength.4 Recently, the dispute has become more problematic because the claimant states are inclined to deploy their naval assets in controlling the disputed offshore territories, and to demonstrate their resolve to keep them.5Early on, this maritime dispute has caught the attention of the United States, which is trying to maintain its strategic primacy in East Asia, albeit China's emergence as an economic and military power. In 2010, the US declared that it is in its vital interests that the freedom of navigation in the South China Sea is maintained and that the dispute is peacefully resolved through multilateralism and international law. In 2011, the Obama Administration announced the US strategic rebalancing to the Asia-Pacific region to ensure that its diplomatic initiative of a comprehensive "rule-based" system to resolve the East Asian Westphalian states' clashing territorial claims in the South China Sea would be backed by American military power.6 Interestingly, Japan has also become interested in the dispute. As China's geo-strategic rival in East Asia, Japan is determined to play a balancing role in the dispute by helping the Philippines and Vietnam build up their respective naval capabilities.These developments have transformed the South China Sea dispute into one of the four potential flashpoints in East Asia, along with the Korean Peninsula, the East China Sea, and the Taiwan Straits. To some analysts, the South China Sea is becoming the future of conflict in which the Westphalian states will jockey for strategic and diplomatic positions with their warships in the high seas, pursue their conflicting claims for natural resources, and strive for primacy in the Western Pacific.7This paper explores how the South China dispute can be addressed by going beyond mere conflict management by exploring the prospects for a conflict resolution. Using Charles Kupchan's theory of Stable Peace, the article raises two central questions: 1) how is the South China Sea dispute currently managed? And 2) how can the dispute be peacefully resolved through a stable peace among the claimant states? It also tackles the following questions: 1) what developments led to increased tension South China Sea? 2) How are the claimant states responding to the maritime dispute? …

Effective Corporate Board Structure and Agency Problems: Evidence from China's Economic Transition

Abstract: 1.IntroductionThe corporate board serves the most important role in corporate governance. Exploring factors influencing board structure are fundamental in understanding the role of board directors in improving corporate governance. Previous studies suggested that a corporate board is constituted jointly by reconciling two conflicting views (Boone et al., 2007). One is the efficient board hypothesis that board structure is efficient and there is no need to regulate. The other is the inefficient board hypothesis, which argues that a corporate board is naturally structured inefficiently. Firms should adjust board structure according to the cost and benefit of board monitoring and firm-specific characteristics in order to achieve the optimal board structure. Based on these two competing views, previous studies were of the view that in most cases, the corporate board structure is jointly determined by the scope of operation hypothesis, monitoring hypothesis and bargaining hypothesis (Hermalin and Weisbach, 2001; Arthur, 2001; Iwasaki, 2008; Combs et al., 2007; Lehn et cd., 2009).Studies of this topic on the developing economies are few. This is certainly the case for China, with some studies of Chinese board governance covering only the initial stages of Chinese economic transition (Chen and Al-Najjar, 2012). Recently, however, Chen's (2014) study on Taiwan, Germain et al.'s (2014) study on Malaysia and Iwasaki's (2008) study on Russia have begun to shed light on the developing and transforming countries with institutional settings and characteristics that differ from those in advanced economies. This study makes comparisons with existing studies by addressing particular issues related to Chinese board structure during the period from 2000 to 2012.This study focuses on China because its corporate sector has grown to include some of the largest firms in the world,1 and the country has been undergoing economic transition during the last three decades. Chinese economic transition is a gradual process and follows the path of partial privatization of state enterprises. The largest enterprises are also increasingly seeking listing in China's and foreign stock exchanges. While, Chinese listed firms are divided into state and private enterprises, there are also firms for which ownership is unclear (Cheong et al., 2014). However, because this ownership ambiguity is hard to clarify, this paper has to rely on the official definitions of state-controlled and private-controlled enterprises. Still, China's split-share structure reform in 2005 that converted non-tradable shares into tradable shares has moved Chinese corporate governance closer to that characterized by market-orientation. In addition, agency theory-based government regulations towards hiring independent directors is another driving force for listed firms to adjust their board structure.The structure of this paper is as follows. Section 2 reviews the literature on the determinants of board structure. Section 3 examines China's corporate governance issues, including the split-share structure reform and enterprises. Section 4 provides the specification of the research methods and the data used for estimation. Section 5 shows the empirical findings. Section 6 concludes by drawing several implications.2.Literature ReviewThe literature on the determinants of board structure is generally framed by three basic theories, namely the resource dependent theory, agency theory and power circulation theory. The resource dependent theory argues that the main function of the corporate board is to give advice and information needed to facilitate the firm's decision-making and strategic choice (Hillman and Dalziel, 2003; Pugliese et al., 2014). From the agency theory's perspective, however, the corporate board functions to monitor the interaction between managers as the agent and shareholders as the principal, and on behalf of the latter (Fama and Jensen, 1983; Shleifer and Vishny, 1997; Hillman and Dalziel, 2003). …

US-China Relations: A Media Perspective

Abstract: 1.IntroductionAfter three decades of "opening up" and economic reform, China has achieved extraordinary economic progress that attracted worldwide attention. The rapid economic growth unsurprisingly was also accompanied by modernization of its military and projection of its soft power worldwide in recent decades. All these combined propelled China further into a central position of power, causing strong repercussions in the international community thereof. As the Chinese economy further expanded, so did the doubt and speculation from the international community. Despite the degree of interdependence between China and the United States and a positive response to a rising China among certain scholars and policy makers, the rapid emergence or resurgence of China as a world power had been approached with more caution than acclaim in the United States. The US discomfort about China had to do with a myriad of issues that have been constant causes of diplomatic entanglements between the two powers, ranging from trade disputes, human rights concerns, military modernization, geographical influence, Taiwan, international role, etc. The discomfort on the US side became heightened in the 1990s. "China Threat" rhetoric was born as a result. The intensive debate of China's threat reached its peak in 1997 when Foreign Affairs carried an article by Burnstein and Munro entitled "The Coming Conflict with America" (Bernstein and Munro, 1997). The "China Threat" has been subjected to diversified interpretations and explanations since then. One primary concern underlying the "China Threat" rhetoric has to do with the potentiality of a rising China to upset the existing balance-of-power of the international system (Mearsheimer, 2001; Halper, 2012). Additionally, there were worries about China's ideological and cultural idiosyncrasies (Xia, 2009). Moreover, there have also been geopolitical and geo-economic concerns about the rise of China and its implications for the US projection of power worldwide (Roy, 1994; Gries, 1999; Ravenhill, 2006). There were, of course, concerns about China's military modernization and expansion as well (Whiting, 1996; Shambaugh, 1996). Despite the different focus among all versions of the "China Threat", there was a shared perception of rising China as a disturbing factor to international order and stability. The underlying rationale invariably reflects a fixed mind-set that revolves around the zero-sum game rule.Needless to say, the biggest factor that shaped the dynamics of the international system in the post-Cold War era is globalization. The enlarged international interaction and interdependence is fundamentally transforming governance at both state and international levels. As globalization deepens, unprecedented interdependence among countries has been fostered regardless of ideological, cultural, and geographical disparity. This, in turn, necessitates increased cooperation and coordination across the globe. While keeping the strategic alertness and scepticism is healthy, the drumming of the "China Threat" rhetoric in the context of an unprecedentedly interdependent world could be self-defeating. It will not only substantively harm American interests but also heighten opportunities for unnecessary frictions due to miscalculation and miscommunication. The political consequences of overestimating and overreacting to the "China Threat" have been forecasted and criticized for years (Ross, 1997; Broomfield, 2003; Johnson, 2003; Pan, 2004). Both scholars and foreign relations specialists emphasized that the United States should not follow the example of the Cold War in setting the parameters of containing China because the interests of both states are too much intertwined already. Failure to arrive at cooperative and positive agreements will be detrimental to the rest of the world, both financially, geopolitically and socially. As illustrated by the bilateral interactions between the two powers since the 1990s, Beijing and Washington have come to realize that the two sides needed to face a new reality in which both "were too large to be dominated, too special to be transformed, and too necessary to each other to be able to afford isolation" as early as two decades ago (Kissinger, 2012). …

The Power of Culture: Encounters between China and the United States

Abstract: Priscilla Roberts (ed.), The Power of Culture: Encounters between China and the United States, Newcastle, UK: Cambridge Scholars Publishing, 2016, 603 pp.Sino-US interaction represents one of the most critical international relationships of our times. The former, a rising global power, and the latter, the incumbent superpower, are jostling, subtly at best, for pole position in a still evolving new world order. And we are witnessing the dispatching of both hard and softpower in this geopolitical rebalancing. Like the Americans, the Chinese are dispensing their intangible assets. In addition to political and economic diplomacy, this charm offensive contains a pronounced projection of cultural power, with the aim of procuring international goodwill and strategic advantage.The Power of Culture: Encounters between China and the United States examines this aspect of the multifaceted Sino-US rivalry. It is a collection of conference articles from the American Studies Network (ASN), a professional entity representing China-based scholars of America studies. As such this book advances a unique point of view, namely, a mainland Chinese perspective of the encounter between these two world powers. Multidisciplinary in scope, it looks at the ongoing engagement from divergent viewpoints, involving fields ranging from political science and international relations, to historical, anthropological and cultural studies.These divergent essays are organized under three main themes. Part I (Perspectives on Sino-American Relations) is a survey of this important bilateral tie, examine through the lenses of their cultural engagements. It begins with an analysis of the US strategy in East Asia in terms of geopolitics and cultural ambitions. This is followed by a set of articles analyzing the Reagan Administration's policy towards China, American Presidential War Rhetoric, and a taxonomic review of Obama Administration's addresses pertaining to China, among others. The section ends with two studies, one on China's "New Long March" to challenge American cultural primacy and the other the role of US think tank in shaping the American cultural security.The focus of Part II (Educational Exchanges) is on the interplay of cultural powers within the education arena and looks at it from three angles. The first addresses the American impact on the Chinese world. Set within the backdrop of what he calls a "Cultural Cold War", Zhang Yang elucidated the not widely known American role in the establishment of the Chinese University of Hong Kong. Next we have an analysis of the effects of Chinese Fulbright scholars upon their return to China from the US. …

The Effect of International Relations on Cross-Border Economic Ties: A Case Study of Taiwan's Economic Policies toward China

Abstract: 1.IntroductionThere have been various studies about the effect of cross-border economic ties on international relations. While some argue that there is a positive relationship between them, others cast doubt on such a relationship. However, it is worth noting that, though a very important research topic, the exploration of whether economic interdependence among countries leads to peace constitutes just part of the research on the relationship between cross-border economic ties and international relations. To have a more comprehensive understanding of this relationship, we have to study not only the effect of the former on the latter but also vice versa as well. Here, the conflict-prone relations between China and Taiwan since 1949 and the growing economic ties across the Taiwan Strait since the late 1980s have arguably made the case of China-Taiwan relations one of the best for studying the aforementioned relationship. Yet, while there have been many works examining the effect of so-called "cross-strait economic ties" on China-Taiwan relations, there are relatively few studies focusing on the effect of the latter on the former.Therefore, to enrich the research on the relationship between cross-border economic ties and international relations in general and that between China-Taiwan economic ties and their political relations in particular, I conduct in this paper a case study of the effect of China-Taiwan relations on Taiwan's economic policies toward China during the previous two administrations of Taiwan (i.e. the Lee Teng-hui Administration from 1988 to 2000 and the Chen Shui-bian Administration from 2000 to 2008). The findings of this paper reveal that international relations do have an effect, though a very complicated one as shown in the case of China-Taiwan relations, on cross-border economic ties. Also, in terms of the study of China-Taiwan relations, the analysis conducted in this paper uncovers a more comprehensive picture of how China-Taiwan relations affect their economic ties than the previous and sometimes conflicting findings which, as this paper will demonstrate, just tell us part of the whole story. Here, it is worth pointing out that this paper does not intend to argue that the effect of China-Taiwan political relations on their economic ties outweighs the effect of the latter on the former. There is no doubt that the question of whether and how economic ties between China and Taiwan would lead to peace in the Taiwan Strait is worth exploring for both academic and practical purposes. However, that being said, it is equally important to know that any understanding of such a relationship would be incomplete without some understanding of the effect of China-Taiwan political relations on their economic ties as well as the recognition of the fact that such a relationship is actually a two-way one.1More specifically, this paper finds that, first of all, the Taiwanese government throughout the period between 1988 and 2008 cared about both of the negative effect of cross-strait economic ties on Taiwan's national security and their positive effect on its economic development. Second and most importantly, while the Taiwanese government under normal circumstances tended to weigh very positively the economic benefits brought to Taiwan by its economic ties with China and therefore tried to find a good balance between the negative and the positive effects of cross-strait economic ties, it unequiv- ocally weighed the negative effect of cross-strait economic ties on Taiwan's national security much more than their positive effect on Taiwan's economic development and therefore tried to impose more restrictions on cross-strait economic ties when China-Taiwan relations turned extremely tense (i.e. Lee's policy of "no haste, be patient" in 1996 following the 1995-1996 Taiwan Strait Crisis, and Chen's policy of "active management and effective opening" in 2006 following the introduction of the Anti-Secession Law by China in 2005). …

Shaping Collective Attitudes - the "China Dream" (CD): A Textual Analysis

Abstract: 1.Introduction and Literature ReviewAll states produce propaganda for the purpose of social mobilization, instilling patriotism and loyalty amongst its peoples, society and institutions. Harold Lasswell's classical 1927 work argues that propaganda is related to the manipulation of "collective attitudes" through the use of force or softer forms of coercion (e.g. use of economic incentives) (Laswell, 1927: 627-628). Propaganda also makes use of selective symbols and signifiers to shape and guide public opinions and attitudes. Lasswell distinguishes between propaganda and advertising which he characterizes as "paid publicity" and the two may not coincide in terms of purposes (see ibid. : 628). Propaganda materials are contextually interpreted by its designers and recipients in accordance with dynamically-changing agendas, contexts and environmental factors. Very often, there is an intended target audience but, in reality, the boundaries of this audience cannot be neatly delineated as unintended audiences are sometimes incorporated into the receiving group themselves or there may be resistance to the propaganda materials amongst members of the intended audience. There are no inherent values within propaganda materials themselves. These values are subjectively read and comprehended by interpreting parties when they craft or manipulate propaganda for their own interests and agendas. Positive and negative values attributed to propaganda materials are carefully negotiated by contesting forces and (state and non-state) interest groups in public narratives through their debates, coercion and persuasion.What is the relationship between propaganda and political attitudes? In a more updated work, Stanley Feldman studies the relationship between public opinions and core beliefs/values. A question that Feldman asks in his writing is also relevant to the discussion in this paper - why are the masses attracted towards certain perspectives and viewpoints (Feldman, 1988: 417)? How do the state or its statesmen and politicians try to propagate these values to the masses (the general public). This is especially important since Feldman argues that exposure of these values are very important ("The more people are exposed to these structures and the better they comprehend them, the more likely their beliefs will be systematically organized" (see ibid.: 417)). How these values are propagated and disseminated to the public also depends on the political system in which they are located. In a democracy, statesmen and politicians tends to seek consensus and, in the absence of which, persuasion through policy-making or election campaigns. In an autocratic society, compliance is sought through state enforcement of obedience from the people through economic, social and political means (a combination of carrots and sticks). Propaganda is a subset of these means to seek general consensus. It is more forcefully and hegemonically presented in autocratic societies in comparison with the comparatively more subtle approach and pluralistic comprehension of the materials found in democratic societies. The rule of law in democratic societies also prevents arbitrary enforcement and forced compliance with collective attitudes/values/beliefs that is found in non-democratic ones. The ideal democratic impulse is to persuade members of a society to voluntarily accept ideas and concepts promoted by the state. Free will is the basis for voluntary societal acceptance of a policy, initiative, worldview or a campaign slogan.2.Multiple Doctrinal Identities?As a kind of political narrative, belief or set of values, a question then emerges related to the subject matter of this writing: how does one classify the "China Dream (CD)" narrative? Are they ideologies, doctrines, beliefs, policy preferences, values, propaganda or slogans? How do the CD narrative (and can they) become widely-held attitudes towards dominant and prevailing political ideas and beliefs? …

Normative Hierarchy in Informal Economic Institutions: Docile China versus the Assertive West

Abstract: 1.IntroductionSince the end of the Bretton Woods system, the role of informal institutions in international economic and financial governance has drawn the attention of international relations scholars and political economists (Farrell and Heritier, 2003; Vabulas and Snidal, 2013). In this context, the term informal institutions refers to institutions lacking precise rules that are endowed with law-enforcement powers and rely to a large extent on norms and customs. G groups such as G7/G20, which shape international macroeconomic governance, and the Basel Committee on Banking Supervision are two examples of informal institutions. These institutions have achieved moderate success in dealing with the dynamism of the international macroeconomy and finance by virtue of flexibility, which is the major advantage of informal institutions.Meanwhile, the rise of emerging states - China in particular - has become a considerable concern for advanced states, especially after the global financial crisis of 2008-2009. Because the effectiveness of informal institutions has been supported by shared norms among a small number of advanced states, the emergence of "state capitalist" states like China, which do not share liberal economic norms with advanced states, was expected to have negative effects on the status quo (Bremmer, 2010; Halper, 2010).However, what has come to pass has differed significantly from that expectation. As we will describe below in detail, although China has been feared as one of the most serious threats to the liberal international order among emerging states, it has consistently exhibited a cooperative attitude since joining the informal institutions. Major advanced states such as the US and Germany, on the other hand, have committed rather deviant behaviours with regard to internationally pursued policy goals.How can we understand such an unexpected situation? To begin, this article offers an analytical framework focusing on the normative hierarchy involved in informal institutions and then applies it to explain cases of international banking regulations and macroeconomic cooperation. The purpose of the analytical framework is not to create a theory applicable to all behaviours of China in global governance across issue areas. Rather, its purpose is to explain the apparently counterintuitive cases where China exhibited more cooperative behaviours than major Western countries in global governance. In this sense, our approach here is close to a "theoretically guided historical account" (Gourevitch, 1986: 34). Based on this analysis, we draw the understanding that the different degrees of international cooperation between major Western states and China can be recognised as a reflection of normative hierarchy in informal institutions derived from disparity in the power resources held by both sides. Thus, this paper challenges the pervasive view that the rise of China would inevitably undermine cooperation in international economic governance by bringing a different sort of capitalism.2.Norm Supplier and Norm DemanderMuch of the mainstream constructivist literature seems to have some "liberal bias", in which the diffusion of norms in international society is thought to contribute to the establishment and maintenance of a liberal international order in which international public goods are promoted under relatively equal interstate relations (Adamson, 2005; Epstein, 2012). In contrast, recent realist constructivism literature tends to focus on the relationship between norm and power or hierarchy. Best (2010), for example, argues that the International Monetary Fund began to adopt a 'constructivist strategy' by recommending a policy package that included fiscal transparency, banking supervision, and corporate governance as best practice. It encouraged developing states to voluntarily adopt it. In this context, norms and policy ideas are used as power resources to steer emerging states towards adopting a particular type of economic policy. …