China Rewrites the Global Rules

Despite worries over the end of the Chinese economic miracle and harder times because of the aftershocks of the 2008 financial crisis, global rebalancing is happening — and quickly.

by Philip S Golub

The International Monetary Fund’s executive board announced on 30 November that the Chinese currency, the renminbi (RMB) or yuan, would soon be included in the basket of currencies that make up its Special Drawing Rights (SDR), beside the US dollar, the euro, the British pound and the yen.

The decision recognised the growing role of the Chinese currency in international trade settlements. Since the launch in 2009 of a pilot programme for cross-border RMB trade settlements in Asia, the share of Chinese trade settled in RMB has risen from 3.2% to 25%, and should, according to the Financial Times, soon reach 46% (1). Offshore centres clearing the currency have been set up in Hong Kong, Singapore, Taiwan, London and Frankfurt. The RMB is still far from world reserve status, requiring full convertibility and complete capital market liberalisation, which China is not ready for and carries significant risks. But the RMB’s rise is a “momentous event in [...] international finance”, according to a former IMF economist (2) — the beginning of a slow shift towards a tripolar world monetary system no longer exclusively centred in the West.

“Great powers have great currencies,” says Robert Mundell (3). Like the gradual rise of the dollar to reserve status in the early 20th century, the internationalisation of the RMB is part of the larger story of China’s re-emergence as a semi-autonomous core of the world economy, and as the primary driver of the movement of East-West and North-South rebalancing that is a key feature of current world politics. China’s share of world GDP, in purchasing power parity (PPP), has risen in 40 years from less than 2% to over 16%, ahead of the US. Though Chinese economic growth declined with the “great recession” after the 2008 crisis, average per capita GDP (PPP) is now expected to increase within a few years (from $9,800 to $16,000, against $250 in 1980). Longer-range projections, which showed a growth trajectory similar to Japan in the late 20th century, suggest that per capita GDP will reach current Japanese or European levels by the mid-21st century. China is gradually regaining a position in the world economy in keeping with its demographic weight.

                                           Key South-South actor

It has become the core of South-South trade and investment linkage, supplanted Japan and the US as the leading trade partner of nearly all East Asian countries, and become a crucial actor in South American, African and South Asian trade. China is now Brazil’s leading trade partner, ahead of the US. There are similar trends in Chile, Argentina and smaller South American economies. South Africa’s export share to China has risen from 1.8% in 1998 to over 12%, while imports have risen from 3% to 15%. Indian exports to China have risen from 2.9% to over 10%, and imports from 2% to 12%.

This points to a re-patterning of the geography of world trade, and an East Asia-centric South-South trading system, with China at the core. Thanks to new regional and transcontinental linkages centred in East Asia, South-South trade (SST) has expanded more rapidly over 20 years than global trade. In 2013 SST was 25% of world trade, 21% of manufacturing exports, and 25% of exports of manufactures with medium and high technological intensity. Trade between developed countries fell from 46% to less than 30%. The result is a reduction of traditional single-market dependency in Latin American, sub-Saharan and Southeast Asian countries on Europe and the US. This has been accompanied, particularly in East Asia, by industrial upgrading: the “developing” world’s share of manufacturing value-added has risen from 8.8% to nearly 30%, and of merchandise trade from 25% to 47%.

China’s re-emergence has begun to alter the vertical North-South relations of the age of western empire and industry. This generates new dependencies: when China sneezes, emerging country partners catch colds — as with the current downturns for exporters of primary goods because of China’s slowing growth. The impact of the global crisis on China evinces the need for a sustainable development strategy focused on domestic improvements rather than export growth. Even so, we are witnessing a structural change in the global economic and political hierarchy.

                                       Bye-bye Bretton Woods?

Politics has lagged behind economics, but a gradual reordering of world politics is visible in the growing voice of the South in organisations and clubs (G20), its activism in world politics, and new international institution-building efforts bypassing traditional centres of authority. Frustrated by the slow pace of change, notably in the IMF and World Bank, China has been leading the effort of global South countries to create a new system to govern the world economy. In 2013 Brazil, Russia, India, China and South Africa (the BRICS) set up the New Development Bank (NDB),headquartered in Shanghai, with a capital base (money paid in and pledged) of $100bn; this will combine investment and monetary functions, serving as a lending institution for infrastructure development projects as well as a reserve facility for balance of payments issues. In 2014 China founded the Asian Infrastructure Investment Bank (AIIB), which, like the NDB, has a $100bn capital base (the Japanese-led Asian Development Bank has $160bn, the World Bank $220bn).

Full-text available at:

https://mondediplo.com/2016/02/08china

International Orders in the Early Modern World

Before the Rise of the West

Edited by Shogo Suzuki, Yongjin Zhang, Joel Quirk

Routledge – 2014 – 20 pages

Series: New International Relations

This book examines the historical interactions of the West and non-Western world, and investigates whether or not the exclusive adoption of Western-oriented ‘international norms’ is the prerequisite for the construction of international order.

This book sets out to challenge the Eurocentric foundations of modern International Relations scholarship by examining international relations in the early modern era, when European primacy had yet to develop in many parts of the globe. Through a series of regional case studies on East Asia, the Middle East, Africa and Latin America, and Russia written by leading specialists of their field, this book explores patterns of cross-cultural exchange and civilizational encounters, placing particular emphasis upon historical contexts. The chapters of this book document and analyse a series of regional international orders that were primarily defined by local interests, agendas and institutions, with European interlopers often playing a secondary role. These perspectives emphasize the central role of non-European agency in shaping global history, and stand in stark contrast to conventional narratives revolving around the ‘Rise of the West’, which tend to be based upon a stylized contrast between a dynamic ‘West’ and a passive and static ‘East’.

Focusing on a crucial period of global history that has been neglected in the field of International Relations, International Orders in the Early Modern World will be interest to students and scholars of international relations, international relations theory, international history, early modern history and sociology.

REVIEWS

"An outstanding volume of non-Eurocentric historical-sociological essays that advances an extremely powerful critique of the English School’s commitment to what I call the ‘Eurocentric big bang theory of world politics’ – that the big bang of modernity exploded autonomously within Europe and that thereafter European ‘civilization’ expanded outwards in a non-problematic way to remake the world in its own image – by deploying the antidote of bringing Eastern agency back into the story of the long-term development of world politics." - John M. Hobson, Professor of Politics and International Relations, University of Sheffield, UK.

"Perhaps ‘1648 and all that’ fundamentally distorts our understanding of the history of international relations. By rediscovering early modern and non-western international orders, this expert team sets out a challenge to IR scholarship. It is especially welcome and important in making sense of the profound changes currently underway." - Ian Clark, E. H. Carr Professor of International Politics, Aberystwyth University

"Maps centered on the South Pole are amusing, but international relations books centered on the non-Western world are essential. From its origins, international relations theory has been a Western enterprise with other parts of the world largely ignored or analyzed through parochial and often inappropriate conceptions. Suzuki, Zhang, Quirk and their collaborators turn the tables and offer perspectives on Europe from East Asia, the Middle East, Africa and Latin America, and generally at a time when European interlopers were unable to impose their preferences on these cultures. They effectively demonstrate the importance of non-Western cultures and their ideas in shaping global history." - Richard Ned Lebow, Professor of International Political Theory, King's College London, UK

CONTENTS

Introduction Shogo Suzuki, Yongjin Zhang and Joel Quirk 1. Europeans and the Steppe: Russian lands under the Mongol Rule Iver B. Neumann 2. Europe, Islam and Pax Ottomana, 1453-1774 Ayla Göl 3. Curious and Exotic Encounters: Europeans as Supplicants in the Chinese Imperium, 1513-1793 Yongjin Zhang 4. Europe at the Periphery of the Japanese World Order Shogo Suzuki 5. A Corrupt International Society: How Britain Was Duped into its First Indian Conquest Darshan Vigneswaran 6. International Relations in the Americas during the Long Eighteenth Century, 1663-1820 Charles Jones 7. Europeans, Africans and the Atlantic World, c1450-1850 Joel Quirk and David Richardson Conclusion: Eurocentrism, World History, Meta-narratives and the meeting of international societies Richard Little

AUTHORS

Shogo Suzuki is Senior Lecturer in the Department of Politics at University of Manchester, UK.

Yongjin Zhang is Professor of International Politics at Bristol University, UK.

Joel Quirk is Senior Lecturer in the Department of Political Studies at the University of the Witwatersrand, South Africa.

http://www.routledge.com/books/details/9780415626286/

After Defeat: How the East Learned to Live with the West

Washington and Lee University

News and Media, 2011

After growing up in Turkey and then studying international relations in the United States, Ayşe Zarakol realized there was something missing from the literature on international relations. "It had almost nothing to say about the constant struggle with identity issues in countries such as Turkey that I heard on almost a daily basis," she said.

In her first book, "After Defeat: How the East Learned to Live with the West" (Cambridge University Press, February 2011), Zarakol used history, social theory and political theory as well as the field of international relations to make the point that international identity matters to countries.

Zarakol, assistant professor of politics at Washington and Lee University, said that American scholars have tended to focus on the argument that material resources and weapons determine international relations. "I want to draw attention to what may just be the most glaring oversight in mainstream international relations - the lack of attention given to the social nature of the modern international system and its cultural and historical origins," she said.

She explained that international norms about states, and people in those states, have been operating since the 19th century when Europe was at its most racist and imperialistic. "The book is not a manifesto against Western civilization. The norms have changed over time and become more pluralistic, and that's to the credit of the international system. But we need to acknowledge that these norms have Western origins. Most countries in the world did not share that heritage when they joined the international system and had to adapt to a culture that was foreign to them."

The international norms stigmatized countries for being non-Western, and for not being sufficiently modern, developed, industrialized, secular, Christian or democratic. Zarakol argued that stigma has the same effect on states that it has on individuals. "We know that social stratification persists in domestic systems even in the face of legal equality, and we know how much of an obstacle social inequality may be for individuals to fully exercise their autonomy - how is that lesson so easily forgotten in international relations?" she asked.

Zarakol examined Turkey after World War I, Japan after World War II and Russia after the end of the Cold War, to show how they adapted to Western norms by integrating into the international system after losing to Western powers.

"These types of Eastern countries, which used to be powerful and were not colonized by the West, tend to be especially preoccupied by status concerns, and this drives their foreign policy and sometimes their domestic behavior," she said.

Zarakol pointed out that once you start seeing yourself in a comparative light you have basically two choices, just as a stigmatized person in domestic society has - you can embrace the norms and try to assimilate or you can reject them. But both strategies lead to reinforcing the norms.

"If the stigmatized outsider attempts to become ‘normal' through assimilation, he confirms the definition of himself as not ‘normal.' If he argues against the ‘normal' view by pointing out that there are other experiences which that ‘normal' view does not account for, he draws attention to the ‘abnormality,'" she said. "The only way out of the impasse is to make no choice at all and resign oneself to living in a condition of ambivalence."

Zarakol said that what people want most of all is to matter, and that what keeps their faith in the system is the hope that they will matter some day, even if they do not matter today.

"I think there needs to be a better understanding of how social hierarchies in the international system have affected people's lives in the last century," she said. "Because I think the 20th century was a time of promise, in the sense that if a country acted in a certain way it would move up both the material and social hierarchy. But that hasn't really been the case for many countries and I think that's a big problem in international relations. There is little recognition that lack of upward mobility is shaping the motivations of people around the world and creates resentment."

She also pointed out that the scholarly discipline of international relations has barely begun to accept that such social inequalities between countries even exist.

Citing the examples of Japan and Turkey, which have pursued Western-friendly policies in order to gain recognition, Zarakol said that neither country has been able to find a secure place in the international order. "For example, despite its great success and being a member of the G8, Japan is not a rule maker. It doesn't set the agenda in the international system."

I think there may be a limit to how long the majority of the world's population will tolerate living under an international system whose rules they have very little input in, and one in which even the most successful outsiders are never accorded the full respect that their material success entitles them to."

Zarakol added that, for the most part, the field of international relations deems the dilemmas of these countries as irrelevant to modern-day politics. "Not only is this problematic from a social science perspective, but it is also dangerous from a policy-making angle," she said. "Simply put, we need a meritocratic international system, instead of one that is only described as such."

"After Defeat: How the East Learned to Live with the West" is available on Amazon or from the Cambridge University Press.

REVIEW

"A highly sophisticated and impressive book that provides an important contribution to the role of identity in International Relations. By focusing on three key ‘interstitial' states-Japan, Russia and Turkey -which have been located on the ‘inferior' side of the ‘established-outsider' organizing principle of international society, Ayse Zarakol advances a novel understanding of International Relations that goes beyond extant constructivist and English School theories." - John M. Hobson, University of Sheffield

http://www.wlu.edu/x52500.xml

How the American Public Views the Rise of China?

ANDREW SCOBELL, RAND Corporation
Political Science Quarterly,
Vol. 126, No. 2, Summer 2011

Living with the Dragon: How the American Public Views the Rise of China by Benjamin Page and Tao Xie. New York, Columbia University Press, 2010. 232 pp.

On matters of foreign policy, the conventional wisdom had been that public opinion is fickle and uninformed and it was up to the steadfast an knowledgeable “foreign policy elite” to steer the ship of state. Of course, recent scholarship, notably Benjamin Page and Robert Shapiro’s The Rational Public in 1992, has debunked the myth of the clueless masses. Nevertheless, where China is concerned, the American public is routinely assumed to be simplistic, erratic, and easily swayed.

This book is an important correction—demonstrating that the American people are consistent and sensible in their approach to China. The authors analyze a wealth of survey data going back many decades to discern how Americans view China’s rise. Benjamin Page and Tao Xie devote a chapter to each of the following topics: Chinaʼs economic growth, democracy and human rights, China’s growing global diplomatic and military power, and overall American perceptions of China.

According to the authors, American concerns about China are mostly centered on the military dimension ( pp. 58–62). While Americans do not ignore China’s rising economic clout and its impact on the United States, they seem primarily alarmed by the growing security challenge posed to the United States. Yet this does not mean that Americans view China as an enemy. Rather, American views of China are more nuanced, sophisticated, and openminded. The authors opine that, “Overall, the average American has lukewarm to cool feelings toward China” (p. 112). Of course, Americans do have opinions about what China is, where it is going, and what this is likely to mean for the United States. But analysis of the survey data suggests that the U.S. public’s views of China are balanced and sensible views largely untarnished by xenophobia or dogma.

If ordinary Americans are not unduly alarmist, what should we make of the “China threat” hyperbole and hysteria routinely delivered by “television pundits and Washington politicians” who claim to speak on behalf of all Americans (p. 112)? The authors speculate briefly before moving to consider why the “nature of the China policy debate itself” has changed (p. 112). The authors note that on foreign policy matters, it is not uncommon for there to be “substantial gaps between” popular and elite views (p. 113). Of course, public opinion does not decide foreign policy, but Page and Xie believe that it does “impose constraints” on policymakers (p. 5).

What will Chinese readers make of this book? They will probably conclude that Americans really do not care about Taiwan, and that while Americans do care about democracy and human rights, they are largely satisfied when U.S. leaders lecture their Chinese counterparts instead of exerting serious pressure. While these are overly simplistic assessments, they are essentially accurate. Still, these are dangerous conclusions, because public opinion can and does change in response to events. Thus, a repressive China that bullies a democratic Taiwan or commits atrocities against its own citizens can have swift and enduring impact on U.S. public opinion— witness the lasting influence of the 1989 Tiananmen Massacre (discussed on p. 101).

What should U.S. leaders take away from this book? Fundamentally, that they should not underestimate ordinary Americans. The analysis in Living with the Dragon suggests that James Mann’s The China Fantasy (New York: Viking, 2007) thesis may be off the mark. Mann claims that successive U.S. leaders have sold the American people a bill of goods—that Washington’s efforts to engage Beijing are sure to bring about Chinese democracy. But Page and Xie indicate that the U.S. public was never gullible enough to buy this idea—almost two-thirds of Americans polled in 2007 believed that if China were to democratize, “it would take…at least twenty years” (p. 74).

In sum, the American public is sensible about China. “Most Americans,” conclude the authors, “are prepared to live peacefully and cooperatively with the Chinese dragon” (p. 121).

http://www.psqonline.org/99_article.php3?byear=2011&bmonth=summer&a=br08free

China's Foreign Policy Debates

Chaillot Paper - n°121, September 2010

ZHU Liqun

Against the background of China’s ascent as a major economic power, this Chaillot Paper offers a unique overview of the debates on foreign policy that have taken place in China over the past decade. It analyses the main trends in the domestic strategic debate and the extent to which they are likely to shape China’s role in the international arena. Various issues are highlighted, including the implications of the ‘peaceful rise’ strategy for China’s foreign policy, the question of China’s international identity and China’s responsibility as a stakeholder in the international system. Chinese attitudes to the concepts of sovereignty, hegemony and multipolarity, and how they differ from prevailing Western assumptions, are also explored. The analysis also focuses on the tensions between the ‘peaceful risers’ and the proponents of a more militant nationalism in China.

China’s future evolution as a world power is an issue of paramount importance to the European Union. For the EU, the key challenge is to engage China in a multilateral approach to global governance. In this context, it is hoped that this Chaillot Paper will provide valuable insights into the different schools of thought underpinning the formulation of Chinese foreign policy.

Cited in Le Monde:
Il est en tout cas l'objet de vifs débats parmi les experts en relations internationales chinois, révèle, dans un numéro des Cahiers de Chaillot de 2010 consacré à la politique étrangère chinoise, la chercheuse Zhu Lijun ...

Chaillot Paper - n°121, September 2010
ZHU Liqun

China's Foreign Policy Debates (80 pages, Pdf)

"The concluding chapter attempts to categorise foreign policy debates in

China based on the current dominant schools of thought in Chinese

international relations. In fact, China’s intellectual worldviews range

along a spectrum from ‘offensive realist’ at the one end to globalist

views at the other end. It is therefore becoming difficult to find

consensus among Chinese IR scholars on the various key aspects

of Chinese foreign policy. Realism is quite often perceived as a

dominant ideology which has had deep roots in Chinese culture

for several centuries, but this paper finds that this is not the case

today. The preponderant voice heard in the Chinese IR community

nowadays is that which champions the liberalist worldview: this

view is represented in at least one third of the international relations

publications studied in this volume, while roughly another one third

comes under the category of the constructivist view. Both these schools

of thought argue for more cooperation with and deeper integration

into the international community. The dynamics behind this new

development stem from both internal factors (great social change)

and external factors (international pressure). As a result of constantly

reforming and changing itself in its process of modernisation and

transformation, China now makes a major impact on the outside

world. Meanwhile China itself cannot escape being influenced and

being changed by others in the world. As China embeds itself more

deeply into the international community, foreign policy making in

China is becoming a more complex business, with more issues to

be dealt with, more challenges to be faced on a variety of fronts,

and a larger constellation of actors becoming involved. Among the

latter ranks the IR community, which is going to become more

conspicuous and in the future will play a more significant role in

the process. Current debates on China’s foreign policy will have a

major impact on China’s interaction with international society in

the years to come" (p.13)

Russia and a new democratic realism

Francis Fukuyama

Financial Times, September 2 2008

One idea that you will never hear expressed by either Barack Obama or John McCain in this presidential race is the notion that a chief task of US foreign policy in the next administration will be to gracefully manage an adversely shifting global power balance and significantly diminished US influence. This is not a hypothetical issue, but one that stares us in the face today.

The failure to recognise this shift in power has been all too evident in the events leading up to the Russian intervention in Georgia. Since the Yeltsin years, the US has had a series of policy differences with the Russians, including Nato expansion, the Balkans, missile defence, policy towards Iran and human rights in Russia itself. Diplomacy, such as it was, consisted of persuading Russia to accept all of the items on our list and telling them their fears and concerns were groundless. The US never regarded the relationship as a bargaining situation in which it would give up things it wanted in return for things the Russians wanted. Like the proverbial Englishman speaking to a foreigner, we thought we could make them understand us by repeating ourselves in a louder voice.

This posture by the Bush administration reflected the balance of power that existed in the 1990s, when Russia was weak and had few cards to play. But that has changed. The contrast between Moscow’s intervention in Chechnya in 1994 and Georgia in 2008 is dramatic: much as the US did not like Russian behaviour in crushing Chechen separatism, the Russian military operation was so incompetent that it seemed to set few ominous precedents. Today, all thoughts are on where Russian power will be used next.

If we could roll the clock back to before February when Kosovo declared independence with US support, the elements of a bargain were there. Of the desiderata on the American list, the most expendable were anti-ballistic missile defence and support for Kosovo independence. The former was a pointless irritant to the Russians who never believed the US story that it was a response to a threat from Iran. Kosovo independence does not improve the security of Kosovars, but sets an unhappy precedent of legitimising separatism, which explains why Nato members such as Spain did not back it.

A more difficult choice was Nato membership for Georgia and Ukraine. These democratic countries deserve strong US support. But Angela Merkel, German chancellor, is right in believing that the core of the Nato alliance is its Article V guarantee that an attack on one member should be regarded as an attack on all. This means that the US should be prepared to station forces on a permanent basis to defend any alliance member under threat, as it did on the inter-German border during the cold war. Nato membership is not a talisman that magically confers protection. It requires operational planning and expensive defence commitments.

The Bush administration was not and could not have been serious about Nato membership for Georgia and Ukraine to the extent that it meant providing not just arms and advisers, but real security guarantees of US forces. To the extent that that was so, leading the Georgians on to believe that we would get them into the club soon was a big mistake.

An understanding that may have been possible a year ago is not workable now. The Bush administration has turned Kosovo independence and ABM defence in Poland into faits accomplis, making them unusable as bargaining chips. And rushing to accommodate Moscow while Russian troops are still occupying parts of Georgia proper is unthinkable. In saying this, I do not want to be seen as apologising for Moscow’s behaviour. Russia is not justified in holding on to Georgian territory or trying to overturn a democratically elected regime. Mr Putin’s talk about Georgian “genocide” and US conspiracies is unsettlingly reminiscent of the “big lie” of Soviet times. The fact that Russian feelings of resentment are understandable does not make them morally right.

As Kishore Mahbubani of the National University of Singapore pointed out on this page (August 21), one of the chief ways that US power has been diminished in this decade is in its moral credibility. After the Russian intervention, US officials asserted that “21st century powers don’t violate the sovereignty of other countries to overturn regimes”. Adding the qualifier “in Europe” reduced the snickering only marginally. Democracy promotion – a good thing – has been deeply tainted by its association with the Iraq war and US security interests.

The past two US administrations could assume American hegemony in both economics and security. The next administration cannot, and a critical task will be for it to better balance what we want with what we can realistically achieve.

This does not mean giving up on idealistic goals such as promoting democracy. But the next president will have to “detoxify” (in the phrase of Tom Carothers from the Carnegie Endowment) the very concept of democracy promotion. We will have to think of ways of supporting Georgia and Ukraine other than by new alliance commitments. And we need to plan in concrete terms how to defend existing Nato members – particularly Poland and the Baltic states – from an angry and resurgent Russia.

The writer is professor of international political economy at the Johns Hopkins School of Advanced International Studies and, most recently, author of ‘After the Neocons’ (Profile, 2006)

Development, Democracy, and Welfare States

Stephan Haggard, Univ. of California, San Diego
Robert R. Kaufman, Rutgers University
Princeton Univ. Press 2008
.

Introduction [HTML] or [PDF format]

This is the first book to compare the distinctive welfare states of Latin America, East Asia, and Eastern Europe. Stephan Haggard and Robert Kaufman trace the historical origins of social policy in these regions to crucial political changes in the mid-twentieth century, and show how the legacies of these early choices are influencing welfare reform following democratization and globalization.

After World War II, communist regimes in Eastern Europe adopted wide-ranging socialist entitlements while conservative dictatorships in East Asia sharply limited social security but invested in education. In Latin America, where welfare systems were instituted earlier, unequal social-security systems favored formal sector workers and the middle class.

Haggard and Kaufman compare the different welfare paths of the countries in these regions following democratization and the move toward more open economies. Although these transformations generated pressure to reform existing welfare systems, economic performance and welfare legacies exerted a more profound influence. The authors show how exclusionary welfare systems and economic crisis in Latin America created incentives to adopt liberal social-policy reforms, while social entitlements from the communist era limited the scope of liberal reforms in the new democracies of Eastern Europe. In East Asia, high growth and permissive fiscal conditions provided opportunities to broaden social entitlements in the new democracies.

This book highlights the importance of placing the contemporary effects of democratization and globalization into a broader historical context.

Stephan Haggard is the Lawrence and Sallye Krause Professor of Korea-Pacific Studies at the University of California, San Diego. Robert R. Kaufman is professor of political science at Rutgers University.

Endorsements:

"While many authors cannot see beyond the borders of their own country, Haggard and Kaufman masterfully compare Latin America, East Asia, and East Europe from a global perspective. These two great scholars analyze urgent contemporary problems, the status and future fate of the welfare state, and the relationship of changes with the creation and development of democracy with remarkable expertise, precision, and human empathy."--János Kornai, professor emeritus, Harvard University and Collegium Budapest

"This ambitious book extends the theoretical framework of the literature on welfare states in the advanced capitalist countries, and situates the experience of these countries in a broader comparative context. Haggard and Kaufman bring out the multifaceted implications of development models and regime types for social policy. Their synthetic account is truly a tour de force and a testimony to the fruitfulness of cross-regional comparison."--Jonas Pontusson, Princeton University

"A masterly analysis of how political interests, economic circumstances, development strategies, and local history have shaped what are surprisingly different versions of the welfare state across the developing world. The authors combine fine-grained country analyses with intelligent use of data, and explain and extend the theory and literature on the modern welfare state. The book is both scholarly and readable."--Nancy Birdsall, president of the Center for Global Development

"This book has no equal in the welfare-state literature, a truly impressive achievement. Haggard and Kaufman combine meticulous scholarship with sophisticated theoretical guidance in this study of welfare state evolution in Latin America, Asia, and East Europe. The book not only fills a huge void in our knowledge, it also compels us to seriously rethink prevailing theory."--Gøsta Esping-Andersen, Universitat Pompeu Fabra, Barcelona

More endorsements

Table of Contents

List of Figures xi
List of Tables xiii
Preface and Acknowledgments xvii
Abbreviations xxiii

INTRODUCTION: Toward a Political Economy of Social Policy 1
PART ONE: The Historical Origins of Welfare Systems, 1945-80 25
CHAPTER ONE: Social Policy in Latin America, East Asia, and Eastern Europe, 1945-80: An Overview 27
CHAPTER TWO: The Expansion of Welfare Commitments in Latin America, 1945-80 79
CHAPTER THREE: The Evolution of Social Contracts in East Asia, 1950-80 114
CHAPTER FOUR: Building the Socialist Welfare State: The Expansion of Welfare Commitments in Eastern Europe 143

PART TWO: Democratization, Economic Crisis, and Welfare Reform, 1980-2005 179
CHAPTER FIVE: The Political Economy of Welfare Reform 181
CHAPTER SIX: Democracy, Growth, and the Evolution of Social Contracts in East Asia, 1980-2005 221
CHAPTER SEVEN: Democracy, Economic Crisis, and Social Policy in Latin America, 1980-2005 262
CHAPTER EIGHT: The Legacy of the Socialist Welfare State, 1990-2005 305
CONCLUSION: Latin America, East Asia, Eastern Europe, and the Theory of the Welfare State 346

APPENDIX ONE: Cross-National Empirical Studies of the Effects of Democracy on Social Policy and Social Outcomes 365
APPENDIX TWO: Fiscal Federalism and Social Spending in Latin America, East Asia, and Eastern Europe 370
APPENDIX THREE: A Cross-Section Model of Social Policy and Outcomes in Middle-Income Countries, 1973-80 372
APPENDIX FOUR: Regime-Coding Rules 379
APPENDIX FIVE: A Cross-Section, Time-Series Model of Social Spending in Latin America, East Asia, and Eastern Europe, 1980-2000 382
APPENDIX SIX: Social Security, Health, and Education Expenditure in East Asia, Latin America, and Eastern Europe, 1980-2005 387

References 399
Index 449


http://press.princeton.edu/titles/8775.html

The Prospects for Democracy in China

Long Time Coming: The Prospects for Democracy in China
John L. Thornton, Foreign Affairs , January/February 2008

Summary: Is China democratizing? The country's leaders do not think of democracy as people in the West generally do, but they are increasingly backing local elections, judicial independence, and oversight of Chinese Communist Party officials. How far China's liberalization will ultimately go and what Chinese politics will look like when it stops are open questions.

JOHN L. THORNTON is a Professor at Tsinghua University's School of Economics and Management and its School of Public Policy and Management, in Beijing, and Director of the university's Global Leadership Program. He is also Chair of the Board of the Brookings Institution.

China's leaders have held out the promise of some form of democracy to the people of China for nearly a century. After China's last dynasty, the Qing, collapsed in 1911, Sun Yat-sen suggested a three-year period of temporary military rule, followed by a six-year phase of "political tutelage," to guide the country's transition into a full constitutional republic. In 1940, Mao Zedong offered followers something he called "new democracy," in which leadership by the Communist Party would ensure the "democratic dictatorship" of the revolutionary groups over class enemies. And Deng Xiaoping, leading the country out of the anarchy of the Cultural Revolution, declared that democracy was a "major condition for emancipating the mind."

When they used the term "democracy," Sun, Mao, and Deng each had something quite different in mind. Sun's definition -- which envisioned a constitutional government with universal suffrage, free elections, and separation of powers -- came closest to a definition recognizable in the West. Through their deeds, Mao and Deng showed that despite their words, such concepts held little importance for them. Still, the three agreed that democracy was not an end in itself but rather a mechanism for achieving China's real purpose of becoming a country that could no longer be bullied by outside powers.

Democracy ultimately foundered under all three leaders. When Sun died, in 1925, warlordism and disunity still engulfed many parts of China. In his time, Mao showed less interest in democracy than in class struggle, mass movements, continuous revolution, and keeping his opponents off balance. And Deng demonstrated on a number of occasions -- most dramatically in suppressing the Tiananmen protests of 1989 -- that he would not let popular democratic movements overtake party rule or upset his plan for national development.

Today, of course, China is not a democracy. The Chinese Communist Party (CCP) has a monopoly on political power, and the country lacks freedom of speech, an independent judiciary, and other fundamental attributes of a pluralistic liberal system. Many inside and outside China remain skeptical about the prospects for political reform. Yet much is happening -- in the government, in the CCP, in the economy, and in society at large -- that could change how Chinese think about democracy and shape China's political future.

Both in public and in private, China's leaders are once again talking about democracy, this time with increasing frequency and detail. (This article is based on conversations held over the past 14 months with a broad range of Chinese, including members of the CCP's Central Committee -- the group of China's top 370 leaders -- senior government officials, scholars, judges, lawyers, journalists, and leaders of nongovernmental organizations.) President Hu Jintao has called democracy "the common pursuit of mankind." During his 2006 visit to the United States, Hu went out of his way to broach the subject at each stop. And Premier Wen Jiabao, in his address to the 2007 National People's Congress, devoted to democracy and the rule of law more than twice the attention he had in any previous such speech. "Developing democracy and improving the legal system," Wen declared, "are basic requirements of the socialist system."

As with earlier leaders, what the present generation has in mind differs from the definition used in the West. Top officials stress that the CCP's leadership must be preserved. Although they see a role for elections, particularly at the local level, they assert that a "deliberative" form of politics that allows individual citizens and groups to add their views to the decision-making process is more appropriate for China than open, multiparty competition for national power. They often mention meritocracy, including the use of examinations to test candidates' competence for office, reflecting an age-old Chinese belief that the government should be made up of the country's most talented. Chinese leaders do not welcome the latitude of freedom of speech, press, or assembly taken for granted in the West. They say they support the orderly expansion of these rights but focus more on the group and social harmony -- what they consider the common good.

Below the top tier of leaders (who usually speak from a common script), Chinese officials differ on whether "guided democracy" is where China's current political evolution will end or is a way station en route to a more standard liberal democratic model. East Asia provides examples of several possibilities: the decades-long domination of politics by the Liberal Democratic Party in Japan, the prosperity with limited press freedom of Singapore, and the freewheeling multiparty system of South Korea. China might follow one of these paths, some speculate, or blaze its own.

In a meeting in late 2006 with a delegation from the Brookings Institution (of which I was a member), Premier Wen was asked what he and other Chinese leaders meant by the word "democracy," what form democracy was likely to take in China, and over what time frame. "When we talk about democracy," Wen replied, "we usually refer to three key components: elections, judicial independence, and supervision based on checks and balances." Regarding the first, he could foresee direct and indirect elections expanding gradually from villages to towns, counties, and even provinces. He did not mention developments beyond this, however. As for China's judicial system, which is riddled with corruption, Wen stressed the need for reform to assure the judiciary's "dignity, justice, and independence." And he explained that "supervision" -- a Chinese term for ensuring effective oversight -- was necessary to restrain abuses of official power. He called for checks and balances within the CCP and for greater official accountability to the public. The media and China's nearly 200 million Internet users should also participate "as appropriate" in the supervision of the government's work, he observed. Wen's bottom line: "We have to move toward democracy. We have many problems, but we know the direction in which we are going."

FREE TO CHOOSE

Given the gap between the democratic aspirations professed by leaders such as Hu and Wen and the skepticism that their words elicit in the West, a better understanding is needed of where exactly the process of democratization stands in China today. Chinese citizens do not have the right to choose their national leaders, but for more than a decade, peasants across the country have held ballots to elect village chiefs. What is happening in the vast space between the farm and Zhongnanhai, the CCP's leadership compound in Beijing? Some answers can be gleaned by examining the three pillars of Wen's definition: elections, judicial independence, and supervision.

The Chinese constitution calls for a combination of direct and indirect polls to choose government leaders. In practice, competitive popular elections occur widely only in the country's 700,000 villages. With over 700 million farmers living in these villages, this is not an insignificant phenomenon, but the details tell a complex and at times contradictory story.

The original impulse behind village elections, which began in the early 1980s, was to promote competent local leaders who would grow the rural economy and implement national priorities such as the one-child policy. With the abandonment of collectivization at the end of the Cultural Revolution, a power vacuum emerged in the countryside. By most accounts, at first elections enjoyed the central government's active support and were generally conducted fairly. But in the early 1990s, authorities were reportedly taken aback by figures showing that only 40 percent of elected village chiefs were CCP members. Beijing eventually instructed local officials to ensure that the "leading role" of the Communist Party was maintained. Today, the majority of village chiefs are again party members, although the size of that majority can vary widely by region. Over 90 percent of the village heads in the provinces of Guangdong, Hubei, and Shandong belong to the party, but the figure drops to 60-70 percent in Fujian and Zhejiang. And even these figures overstate the actual percentage of village chiefs who were elected as party members: when nonparty candidates are elected, the CCP nearly always recruits them so as to ensure that it remains in charge while giving farmers the leaders they want.

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Full-text available, click here.

Growing links in energy and geopolitics between China, Russia, Central Asia and the Gulf

Mehmet Öğütçü and Xin Ma [1]

Overview

China’s dependency on imported energy has surged in recent years and is expected to grow at a similar or increasing rate in the coming decades, driven by an unprecedented industrialization mobilization and urbanization process. As a result, the Chinese leadership feels increasingly insecure and vulnerable as greater dependency has exposed the country to the risks of global supply disruptions, chronic instability in energy exporting regions, and the vagaries of global energy geopolitics. As access to sustainable and secure energy at a reasonable cost is perceived by the leadership as critical for China’s continued development, political endurance, and social stability, energy issue has become a matter of “high politics” of national security and no longer just the “low politics” of domestic energy policy[2].

Securing energy resources is no doubt a highly political matter. This was the case for Japan before the Second World War. It is also the case for China today with its growing energy demand. Just like other governments with a long history of central planning economy, the Chinese government believes that security is too important to be left entirely to the markets. Instead, it combines government approaches with market measures to secure the needed energy as demonstrated by the ambitious shopping behavior of the Chinese national oil companies and the high profile energy diplomacy, conducted by the government. This is undoubtedly going to have a profound impact on the international market, particularly on the major energy exporters, namely the Gulf, the CIS, and Africa.

This paper attempts to analyse the expanding energy linkages of China, one of the most dynamic major consumers, with the Middle East, a leading petroleum producer and the CIS, a core non-OPEC emerging producer, not only because they are well established oil exporting regions, but also because of their geopolitical relevance to China as key players in a possible energy corridor linking China with the Gulf at some point in the future. The paper concludes that the economics and geopolitics of energy supply for China dictate different approaches to each of these regions, with the CIS territory ensuring its energy to be transported across the ocean where China could be vulnerable to potential maritime disruption in the event of serious international disputes, and with the Gulf offering more flexible commercial arrangements.

China takes different economic and geopolitical approaches towards Russia and the Central Asian/Caspian producers. Compared to Russia, seen as relatively unreliable, Central Asian hydrocarbon resources seem more promising and feasible for China, although funding problems and political calculations plaguing all pipeline projects offer no exception[3] Furthermore, China’s extending its Central Asian land routes from Kazakhstan and Turkmenistan and then down to northern Iran is seen as a visionary Sino-Arabic oil passage to the Gulf ports[4]. China is also willing to join the northern line transportation for its expected stake in Siberia and the Russian Far East, by some oil swap options between China, Kazakhstan and Russia. Similar natural gas projects are under work or consideration linking China to Central Asia and Russia.

These corridors could eventually position the Middle Kingdom at the centre of a "Pan-Asian Global Energy Bridge" that will connect existing and potential suppliers to Asia (i.e., the Gulf, Central Asia, and Russia) with the key consumers (China, Japan and Korea). If successfully implemented, this will not only largely improve the energy security of China, but also will enhance Beijing’s geopolitical influence in this geography.

As the international energy sector has undergone significant changes since the beginning of this century, due to the emergence of new players and the changing of dynamics among all players, the resultant energy scene requires adjustments to make room for new players in the marketplace and develop effective, “win-win”, collaborative mechanisms to promote confidence. Energy security concerns need to be addressed from the standpoints of both consumers and producers. Otherwise, geopolitical rivalry and tough competition for scarce resources will likely intensify, leading to “zero-sum” confrontations.

Changing dynamics in international petroleum sector

The pattern of international petroleum sector is under serious transformation due to the emergence of new powers, such as China, or old players being equipped with new powers, such as Russia, Central Asian countries and the Gulf countries, and an increasing concern of energy security from both consumer and producer perspective. The changing nature of the international petroleum market thus requires new rebalanced mechanisms, and new forms of partnerships among players.[5] These major consumers and producers are interacting with each other, taking active measures to conduct energy diplomacy, establishing new strategic partnerships with a view to changing rules in a way that will better serve their national interests.

The profound changes in world energy, still underway, could be summed up as follows:

First, the increased international petroleum prices have, together with many other factors, shifted power significantly to oil producing countries, especially a few large ones, where the majority of remaining reserves are located, such as the Gulf, Russia, and Central Asia[6]. This power, coupled with the huge financial assets accumulated by those producers in a high price environment, has fuelled the international ambitions of these countries to seek changing or reshaping the traditional rules of the game for the benefit of their national interests.[7] Some of them, such as Russia, not only host large share of world petroleum reserves, but also has the political will to use energy as an instrument to advance its economic and political interests.[8] Aware of their increasing power, many of the resource-rich countries have either re-nationalised their oil industries or established strategic control through further transfer of power into the hands of governments.[9]

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Full-text of the paper is available, click here. (pdf, 42 pages)

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The Reflection Cafe thanks to the authors for their permission to re-publish this article in the Cafe. The article has been published earlier in Insight Turkey:

http://www.insightturkey.com/currentissue.htm / http://www.insightturkey.com/is0903.htm

[1] This paper represents the authors’ personal views and not those of any organisation they are associated with.

Mehmet Ögütçü, former Turkish diplomat, senior OECD/IEA staff in Paris, an International Board member of the Windsor Energy Group, and currently with BG Group in London. He is the author of numerous books including, inter alia, “China’s Quest World-wide for Energy Security” (IEA, 2000), “Eurasian Energy Prospects and Politics: Need for a Western Strategy” (Energy Charter Treaty, 1994), “Asian Energy Security Concerns and Geopolitical Implications for the Middle East, the Indian Ocean and the Central Asia” (IDSA New Delhi: February 2003), “China’s Regional Development and FDI”, (OECD,2004), “International Investment for Development” (OECD, 2005), “Does Our Future Lay with Asia” (1998, Milliyet Publishing) and “2023 Turkey Roadmap” (Etkilesim Publishing, 2007). He can be contacted at ogutcudunya@yahoo.co.uk

Xin Ma, a researcher and doctoral candidate at Centre for Energy, Petroleum and Mineral Law and Policy at the University of Dundee, has a Master degree on management engineering at University of Petroleum (China). She spent four years working at PetroChina Ltd. The focus of her current research is National Oil Company reforms and the impact to commercial efficiency. She can be contacted at x.ma@dundee.ac.uk

[2] China's quest for energy security since its becoming a net crude importer in 1993 and dethroning Japan as the world’s second largest consumer of oil a decade later has driven the Middle Kingdom to the world’s principal hydrocarbon producing and exporting regions.

[3] Petroconsultants, October 1998, p.51. G. Kemp, R. Harkavy, Strategic Geography and the Changing Middle East (Washington, DC: Carnegie Endowment for International Peace, 1997), p. 131.

[4] Xiaojie Xu, “The Oil and Gas Links between Central Asia and China: A Geopolitical Perspective”, OPEC Review, Vol. XXIII No.1, March 1999, p.48.

[5] Ernst&Young (2007). Partnership in the Oil and Gas Sector: New Models, New Agendas 1-19. P3 Mandil, C. (2007). The Energy Future International Oil and Gas: Financial Review 2007. M. Crisell, Euromoney International Investor PLC 1-3. P1

[6] Despite four years of high oil prices, market tightness is likely to increase beyond 2010 as global oil demand will grow from an annual 2 percent average over the next five years to 2.2 percent. The increase will largely be caused by faster growth in Asia and the Middle East. At the same time, non-OPEC supply will decrease, partly because of delays on major oil projects but also because supplies are nearing a peak. While biofuel production is expected to double over the next few years, it will still only account for 2 percent of global oil supplies by 2012.

[7] Mandil, C. (2007). The Energy Future International Oil and Gas: Financial Review 2007. M. Crisell, Euromoney International Investor PLC 1-3.P1

[8] Lo, B. and A. Rothman (2006). China and Russia: Common Interests, Contrasting Perceptions Asia Pacific Strategy, Asian Geopolitics Special Report, CLSA Asia-Pacific Markets: 1-31.P13, 21

[9] See “The new seven sisters: oil and gas giants that dwarf the west’s top producers”, Financial Times, March 12, 2007. A recent study measuring the shift in power in global energy markets revealed that seven major state controlled energy corporations from non-OECD countries (i.e. Saudi Aramco, Gazprom, PDVSA, China’s CNPC, Iran’s NIOC, Petrobras of Brazil and Petronas of Malaysia) presently control over 30 percent of global oil and gas production and over 30 percent of reserves, while the original seven (now four) OECD-based energy blue chips which have dominated global energy markets since World War II (i.e. ExxonMobil, BP, Chevron, Shell) now control just 10 percent of production and 3 percent of reserves.

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