Asia & the Pacific

The U.S. position in the global value chain puts it at a disadvantage, and Washington's confrontational policies are making things worse.

China has at least a 70% dependence on the U.S. and its allies for more than 400 items, ranging from luxury goods to raw materials needed for Chinese industries, a new analysis of trade data has found. (...) The analysis, set to publish Wednesday in the International Security academic journal, uses data from the United Nations Comtrade database, which tracks official global trade statistics. China’s high-dependency exposure was calculated by bundling together trade activity from the U.S. and more than a dozen allies across a range of categories.

In the wake of the global financial crisis of 2008, China began to move away from the market-based approach that had shaped its economic policies for three decades, and toward something that might be termed "party-state capitalism," which involves a high degree of CC control over strategic sectors of the economy. This has led to significant changes in the U.S.-Chinese economic relationship, as both sides have made efforts to secure supply chains, screen inward and outward capital flows, diminish the power of global firms, and reorganize alliances to protect against economic coercion.

Of all the intractable issues that could spark a hot war between the United States and China, Taiwan is at the very top of the list. And the potential geopolitical consequences of such a war would be profound. Taiwan-"an unsinkable aircraft carrier and submarine tender," as U.S. Army General Douglas MacArthur once described it--has important, often underappreciated military value as a gateway to the Philippine Sea, a vital theater for defending Japan, the Philippines, and South Korea from possible Chinese coercion or attack.

In late 2017, Mexico made headlines as Italian company Enel bid what was then a world-record low price for renewable energy in the country’s third such energy auction. This development was possible due to the historical and sweeping energy reforms passed with broad support in Mexico in 2013. Then-President Enrique Peña Nieto had succeeded where previous Mexican presidents had failed, reversing decades of resource nationalism and overhauling the energy sector through constitutional reforms that gave the private sector a larger role and advantaged renewable energy in Mexico’s economy. The 2017 auction seemed to indicate Mexico’s bright future not only as a conventional oil producer, but also as a clean energy power.

The Russian/Chinese-led bloc is expected to approve Iran's accession this week amid uncertainty over President Raisi's foreign posture and ongoing turmoil in Afghanistan.

During war, states trade two types of products with their enemies. To maximize revenues, states continue to trade products that are essential to the domestic economy or that their adversary takes a long time to convert into militarily capabilities.

In this report, we propose a market reform pathway for Yunnan that is both feasible and applicable to address some of these challenges immediately, while aiming for a standard design based on well-documented international experience. Our proposal includes at its heart a pay-for-performance monthly capacity auction that can help cover revenue deficiencies in the energy market. Building on international experience with capacity markets, this approach provides incentives for availability when generation is needed most and is compatible with the adoption of a single energy market for all electricity resources. Out-of-market payments to cover stranded costs of certain firms can thus be minimized. Finally, engaging consumers in both these energy and capacity markets can create high-powered incentives to shift consumption to low-cost months and hours, benefitting the entire province.

It is a critical first step that the financial policymakers of the United States have acknowledged the need for a CBDC, but that realization is not enough. 

President-elect Joe Biden’s decision to create a new cabinet-level position for climate-related issues — and to choose so prominent a figure as former Secretary of State John Kerry to fill it — demonstrates Biden’s sincerity over putting climate at the very center of U.S. foreign policy. It is easy to understate the importance of this appointment, given the flurry of czars created by most new administrations.