Contemporary Chinese Political Economy and Strategic Relations: An International Journal (CCPS)

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1 Contemporary Chinese Political Economy and Strategic Relations: An International Journal (CCPS) Vol. 2, No. 3, December 2016 Foreword From Domestic to Global: Pertinent Issues in Chinese Polity, Economy and Society (pp ) Emile Kok-Kheng YEOH University of Malaya, Malaysia (editorial, no abstract) Will the Communist Party of China Be Able to Win the Anticorruption Battle? (pp ) Jinghao ZHOU Hobart and William Smith Colleges, USA Since the Eighteenth National Congress of the Communist Party of China (CPC) in 2012, the CPC has made great efforts to implement Xi Jinping's blueprint for achieving the China Dream. The on-going anticorruption campaign is part of the road map towards the China Dream. There has been impressive progress in fighting corruption, but the CPC recognizes that the anticorruption campaign faces a huge challenge and is at a crucial stage. The anticorruption campaign is a life-and-death battle that the CPC cannot afford to lose. The critical question is: How can the CPC win the battle in the current Chinese political system? The intention of this paper is not to offer specific measures, but to discuss policy implications by elucidating why some existing anticorruption measures do not work through examining the relationship between corruption and Chinese market economy and the political system. The basic assumption of this paper is that corruption is universal, but the characteristics of China s corruption are different from other nations due to the nature of the Chinese economic, political and cultural systems. The key to anticorruption is to find and deal with the real causes of China s corruption in order to make effective anticorruption measures. There are two opposite perspectives concerning the causes of corruption: While one suggests that the primary source of corruption is the political system, the other contends that corruption has nothing to do with the socialist 1

2 political system. This paper attempts to argue that either denying or overemphasizing the roles of the current political system in spreading corruption is one-sided. Keywords: China, corruption, Chinese politics, Chinese political reform, Communist Party of China China and the Impossible Trinity: Economic Transition and the Internationalization of the Renminbi (pp ) Guorui SUN* and Alex PAYETTE** * London School of Economics, United Kingdom ** University of Montreal, Canada With the recent formal inclusion of the Renminbi (RMB) into the IMF s Special Drawing Right (SDR) currency basket, prospects for further internationalization of the RMB are improving. However, as China attempts to simultaneously undergo an economic transition into a more balanced growth model, and the internationalization of its currency, pressures are mounting from the impossible trinity. The latter is based on the Mundell- Flemming model. The latter posits a policy-choice problem in which a country cannot simultaneously have unfettered capital movement, an independent monetary policy, and a fixed exchange rate system. Naturally, three baskets of policy combinations are possible. Historical events such as the Asian financial crisis ( ) have demonstrated that countries are strictly bound by the impossible trinity. The paper posits that China should opt for the policy basket of a fully liberalized capital account, fully liberalized interest rates, and maintain its current basket peg exchange rate regime but eventually allow for a greater spread. The policy sequence should begin with the liberalization of the interest rates while maintaining the current level of capital controls. Once adequate time has been given to allow the domestic financial and economic system to adjust and consolidate itself, the liberalization of the capital account should be the next goal. Finally, the basket peg exchange rate regime should be allowed a greater float. While the interest rates and the capital account are undergoing liberalization, the exchange rate should operate as a policy tool so as to minimize shocks to the domestic economic system. The policy basket and sequence have been chosen because they are conducive to a risk-averse economic transition from the current export-led growth model. The paper visits the cases of Hong Kong, the United States, and the European Union to examine their policy choice vis-à-vis the impossible trinity in order to make a case for why China should opt for the suggested policy basket. Keywords: Renminbi (RMB) internationalization, economic transition, impossible trinity 2

3 Export Brand Development of China: Lessons Learned and Implications for the Future (pp ) Xinxin BAI* and Ali ÖZTÜREN** * SW-Stahl GmbH, Germany ** Eastern Mediterranean University, North Cyprus This paper is a study of Chinese enterprises export brand development process. It describes the measures for dealing with their weaknesses, using case study methodology combined with the comparative method, analyzes the development of key Chinese enterprises internationalization, and summarizes three typically successful internationalization models currently used: Haier model, Huawei model and Lenovo model. Haier followed the first easy later hard approach, that means it went first to developed countries, and then entered the developing countries as the second step. Huawei on the contrary, followed the way of rural surrounding the urban, which means that it went to the developing countries first, and then entered the developed countries second. Lenovo realized their enterprise and brand internationalization success by acquiring IBM PC division with its innovative and entrepreneurial spirit. Keywords: export brand, internationalization, Chinese enterprises internationalization models, development, strategy A Struggle for Leadership Recognition: The AIIB, Reactive Chinese Assertiveness, and Regional Order (pp ) John H.S. ÅBERG* * Malmö University, Sweden / Lingnan University, Hong Kong The aim of this paper is to contribute to the ongoing debate about Chinese assertiveness. The paper dissects the central articles on the topic and evaluates their conceptual and theoretical insights. It ascertains that the concept of assertiveness is poorly substantiated; that proponents of Chinese assertiveness largely claim that it derives from structural factors that produced effects in Chinese foreign policy behavior prior to the US pivot to Asia; and ultimately, that critical accounts, since they reject the very concept, lack theories that can explain Chinese assertiveness. This article attempts to address these shortcomings. First, the article reconceptualizes assertiveness and connects it to grand strategy change. Second, this change is reactive and occurs after, not prior to the US pivot. Third, in order to provide greater theoretical adequacy, this article combines material factors with institutional factors and show how they dialectically interact with status aspiration, as part of the struggle for the positional good of leadership. To show the 3

4 conceptual and theoretical plausibility of the argument, the paper outlines the dialectical interplay between positional barriers in the ADB and the US pivot to Asia, on the one hand, and reactive Chinese assertiveness and the AIIB, on the other. Keywords: US pivot, rebalancing strategy, TPP, Chinese assertiveness, AIIB, US-China relations, positional competition Economic Diplomacy, Soft Power, and Taiwan s Relations with Indonesia (pp ) PARAMITANINGRUM* and Johanes HERLIJANTO** * Bina Nusantara University, Indonesia ** ISEAS Yusof Ishak Institute, Singapore This paper seeks to discuss the recent developments of Taiwan-Indonesia relations. It especially aims to identify the diverse efforts that Taiwan has made to secure an improved position in its relation with Indonesia, amid an increasingly cordial relation between Indonesia and China. Among the efforts that Taiwan has conducted is using the attractiveness of its economic resources to achieve a better recognition from Indonesia. However, this practice of economic diplomacy has been combined with an attempt to invest soft power through various means. They include, among others, promoting Taiwanese education attraction among middle-class Indonesians, particularly Chinese Indonesians, attracting Indonesian students to pursue a higher degree in Taiwan through various scholarship programs, and establishing a network between the Taiwanese and Indonesian scholars. While the above efforts have arguably enabled Taiwan to have a better recognition among certain segments of the Indonesian public and government, it still faces a number of challenges. Keywords: Taiwanese soft power, economic diplomacy, Indonesia-Taiwan relations, Go South policy, Taiwanese educational promotion, Taiwanese popular culture in Indonesia Guangzhou s African Migrants: Implications for China s Social Stability and China-Africa Relations (pp ) Anas ELOCHUKWU Nnamdi Azikiwe University, Nigeria / Xiamen University, China 4

5 Until recently migration was treated like a footnote in the Africa-China discourse. Previously researchers and the media had focused attention on the cost-benefit analysis of China s economic penetration of the continent. However, since 2008 when over a hundred African migrants blocked a major street in Guangzhou protesting the death of a Nigerian in an immigration raid, researchers and the media have been falling over themselves to unpack the phenomenon of migrant exchange in the relationship. There are now about one million Chinese migrants in Africa as against about two hundred and fifty thousand African migrants in China. Migration is a two-edged sword. On the credit side, migration can be a bridge between peoples as well as a major contributor to economic development. On the debit side, it can be a source of dispute between peoples and a threat to the hosts social stability. This paper discusses the implications of Guangzhou s African migrants for China s social stability and China s relationship with Africa. Keywords: African migrants, Africa-China relationship, Chinese migrants, Guangzhou, social stability Exposing the One China Principle (pp ) Chien-yuan TSENG Chung Hua University, Taiwan In 1992, when the governments from both sides across the Taiwan Strait began having contacts, both of them, at the People s Republic of China (PRC) s request, expressed verbally, and in relation to functional issues, that they advocated the one China principle, though what one China actually meant was open to different interpretations, and the shift that elevated the 1992 one China interpretations from the functional level to the political level did not occur until April Since President Tsai Ing-wen was sworn in and the Democratic Progressive Party (DPP) became the ruling party of the Republic of China (ROC) on Taiwan in early 2016, the PRC has used Tsai s rejection of this so-called 1992 consensus as a pretext to discontinue all intergovernmental communication channels with the ROC on Taiwan, while also cutting down on crossstrait civil exchanges in travel and education. This thinkpiece article aims to scrutinise this one China principle, how it has developed over the years, and expose its underlying realities. Keywords: one China principle, 1992 consensus, Taiwan, China, ROC, PRC Prospects for the Internationalization of Taiwanese and Chinese Higher Education (pp ) 5

6 Lavanchawee SUJARITTANONTA*, Kittichok NITHISATHIAN*, LIN Fan** and John C. WALSH*** * Stamford International University, Thailand ** I-Shou University, Taiwan *** Shinawatra University, Thailand The declining birth rate throughout Asia has serious consequences that require sound strategies in the business of education. This study explores ways in which Taiwanese and Chinese institutions may expand their offer abroad. The analysis of a sample of experiences in Myanmar, Vietnam and Cambodia suggests that successful market entry results from educational regulatory constraints of the host countries, as well as sociocultural preferences influencing student choices. Taiwanese and Chinese private universities must plan carefully for a successful expansion of their graduate programs towards Southeast Asian populations. Keywords: graduate education, Asia-Pacific, higher education Book Review (pp ) Ivan Tselichtchev, China versus the West: The Global Power Shift of the 21st Century, Singapore: John Wiley & Sons Singapore Pte. Ltd., 2012, 227 pp. + xxviii. reviewed by Joanne Hoi-Lee LOH University of Nottingham, United Kingdom Book Review (pp ) Claude Meyer, China or Japan: Which Will Lead Asia? London and New York: Hurst, with Columbia University Press and Oxford University Press, 2012, 195 pp. + xxi. reviewed by Monir Hossain MONI Asia Pacific Institute for Global Studies, Bangladesh 6