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China’s Economic Diplomacy: Where do Taiwan and Kosovo fit in?

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The attempt to unite Taiwan with the mainland since 1979 when Deng Xiaoping instituted the principle of “one country, two systems” has been ineffective to date. In fact, China is struggling with so-called “own provinces,” such as Taiwan, Hong Kong, and Tibet, to name just a few. Internal conflicts are usually a cause of imbalance power which leads to small provinces claiming independence, as witnessed with Kosovo’s secession from the former Yugoslavia (FYR). In the case of secessionist movements, the state typically retaliates with repression, ultimately leading to human rights abuse and a lack of freedom, much like in China.   As such, the purpose of this commentary piece is to examine China’s economic diplomacy toward the new Least Developed Countries (LDC) and the increasing tensions with Taiwan.  In recent decades, China’s economy has become vital for many countries because of its ability to produce cheap products of reasonable quality,  therefore its competitive position with other countries has been enhanced as an economic powerhouse. However, its developing era started with the introduction of four economic reforms mainly to encourage foreign investment, which skyrocketed its exports and imports. By 1820 China had the world’s largest economy accounting for 84% of the global average (GDP). The International Monetary Fund estimates that by 2030 China will surpass the US as the world’s largest economy.   However, the former is facing fundamental issues that both the domestic and international communities are grappling at, namely the totalitarian rule over the provinces vying for self-determination.  Located in East Asia, Taiwan is officially known as the Republic of China (ROC). To the northwest, it shares a maritime border with the People’s Republic of China, while to the south it shares a border with the Philippines. Although Taiwan is governed independently since 1949, Beijing claims Taipei as part of its territory and keeps pledging to “unification” even at cost of force. The recent opinion poll conducted by the Taiwan New Constitution Foundation revealed that 50.1 % of the public support ”status quo”, where 38.9% favor independence and 4.7% support unification with the mainland. 

At the time when Vice President Chen was elected in 2004, China had passed the so-called ‘anti-secession law’, a domestic law aimed at unifying Taiwan with the mainland. Beijing has recently stepped up its political and military pressures on Taipei more intensively by exercising military flights near the capital. President Tsai Ing-wen, whose party platform calls for Taiwan’s independence, in her speech condemned China’s intensified military operations being conducted over Taiwan’s sovereignty. Many analysts are concerned that China might provoke a war over Taiwan; however, this scenario is far more complex. As the closest ally and home to the largest US military base in the Pacific, some experts emphasize that Japan is most likely to be at the center of the upcoming conflict. A major factor in China’s militaristic activities on Taiwan is the US’ continuous military support for Taiwan that could play against China. More than $18 billion in arms were sold to Taiwan during President Trump’s presidency.  Despite this Taiwan is still undersized to defend itself against China without US assistance.  Keeping Taiwan stable and secure has been a priority for the US since the Taiwan Relations Act was enforced in 1979. The act was designed to maintain peace, security, and stability in the Western Pacific and between Taiwan and the US. In particular, the US pledges to provide Taiwan with defensive weapons to counter any recourse to force or other forms of coercion that could harm the latter’s economic and social well-being. 

In light of China’s recent military actions, President Biden delivered an alarming message to Beijing warning that the US would defend Taiwan if confronted with an attack. In parallel to this, Japan’s defense minister Yasuhide Nakayame stated on July 26, 2021, that we need to defend democratic values so we must stand with Taiwan. The Biden administration appears to place more emphasis on Taiwan’s security. The recent summit held in Washington, in which 111 democratic nations were invited along with Taiwan, except China and other ”non-democratic countries”, is another indicator of US commitment in the Indo-Pacific.  Despite the act’s apparent failure to go unnoticed, Le Yucheng, the former vice minister of foreign affairs of China, strongly condemned it and stressed that the US would be held accountable. While the US continues to press Taiwan to play a more significant role in international affairs, the permanent membership of China in the UN Security Council has enabled Taiwan to do so. In addition to the Asian Development Bank and the World Trade Organization, Taiwan is a member of over forty organizations. Unlike Kosovo, Taiwan maintains only fifteen diplomatic ties with the US, France, Germany, Japan, Russia, and the United Kingdom being among the countries that have diplomatic relations. Taiwan’s recognition of Kosovo’s independence in 2008 shocked Chinese officials since it strongly opposes the notion that small provinces can’t leave the ‘mainland.’ Kosovo views China as slightly aligned with Serbia and Russian foreign policy. Moreover, China was the only country that abstained from NATO’s intervention in the Kosovo case in 1999. So far, China remains committed to the concept of unification, which requires Taiwan to prepare for a countermeasure against any aggression should the latter attack. Despite its strategic location, Taiwan shares common values with big powers such as the US, Japan, and it plays an important role in ensuring democracy and regional stability. The quest for freedom in Kosovo and Taiwan is different, however, they share similar values. New emerging countries will inevitably arise, and so are the prospects for Taiwan’s secession if US remains committed to tackling China. Unlike its relationship with Kosovo, the US maintains a strong unofficial relationship with Taiwan and continues to provide military supplies meantime.

In a nutshell, the US embodies the power of Taiwan in the Indo-Pacific region; therefore, its role in Kosovo can be viewed as an example of what to anticipate in the event of an attack. Over the past few years, Chinese economic diplomacy has been very successful. Recent years have seen a major shift in its focus towards Africa and the Western Balkans. In consequence, the latter has invested relatively little in Kosovo since it doesn’t recognize as an independent country. The Western Balkans have not been immune to Beijing’s efforts to build infrastructure that could facilitate the transportation of stocks from Greece.  It is imperative to establish a presence in new emerging markets where economies are at the forefront of development. While it is hard to tell whether China is competing with the US in the economic aspect, the US has the capability of reversing the course at any time.  As part of its Belt and Road Initiative (带- 路) China has invested and signed contracts worth $14.6 billion in Bosnia and Herzegovina, Montenegro, North Macedonia, and Serbia between 2005 and 2019.  This has helped in improving regional integration, increasing trade, and promoting economic growth by connecting Europe with Asia and Africa via land and maritime networks. Nevertheless, a paradigm shift is imminent with recent challenges in China being attributed to several factors, including aging demographics, threat of recession, COVID recovery, and power shortages. Even so, this shouldn’t lessen countries’ worry since it’s still difficult to assess China’s decision on its hostile stance towards Taiwan. Therefore, democratic countries should unite against the latter’s policy of aggression.

Arbenita Sopaj is a Ph.D. candidate at Kobe University, Japan, and Teaching Assistant. Her experience involves projects focused on UN and EU work and decision-making process, diplomatic intern, teaching assistant, lecturer. She has completed a double Bachelor and a Masters focused on International Relations and UN- work on peacekeeping and peacebuilding. Currently she is an External Liaison Officer at GPAJ, KPC, ACUNS. Researcher at Research Institute for Indo-Pacific Affairs (RIIPA).

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Guangdong special economic zones at China

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Guangdong Province in southern China is distinguished by the economic development. The sign been approached by “Made In Guangdong” is becoming so famous globally, besides the Guangdong industries and its unique culture.

  Guangdong represents one of the most important provinces of China for a number of political, economic, social and natural reasons. Indications of the success of the openness experiment pursued by China since the late seventies of the last century are evident in it.

Guangdong special economic zones have made great achievements. As the province with the largest economic output in China, south China’s Guangdong Province has achieved tremendous economic development in the past 40 years, thanks to the establishment of special economic zones.

 According to my information, the Guangdong region has established the “Zhuhai Doumen” intelligent manufacturing economic development zone recently, after the Guangdong Provincial Government officially approved the establishment of the “Zhuhai Doumen intelligent manufacturing economic development zone”, which will implement the existing provincial-level economic development zone policy.  It is the third regional economic development zone in “Zhuhai” after “Foshan Industrial Park and Liangang Industrial Zone”.

 Guangdong Province is an economic powerhouse in southern China, and the province will promote high-quality development this year by fostering new engines of growth and strengthening cooperation and communication in the regions of (Guangdong-Hong Kong-Macao Greater Bay) to deepen reform and opening up.

 Guangdong Province, a major part of China’s foreign trade and industrial hub, accounts for about one-tenth of China’s GDP and is the largest of all Chinese provinces.

 Guangdong Province pays close attention to the progress of China’s modernization and the overall picture of reform and opening-up and major national strategic planning. It firmly attaches importance to the reform and opening-up policy by strengthening cooperation between the province and the “Hong Kong and Macao” regions, aligning the development of Guangdong with the “Northern Metropolis” plan of Hong Kong and the economic diversification strategy of Macao, implementing the “Greater Bay Area Connection” project in a more in-depth way, and working with “Hong Kong and Macao” together to build a world-class bay area, injecting vigor and strong impetus into its modernization efforts”.

 It Is remarkable that most of the cities of Guangdong Province are crowded with visitors from all over the world, especially Arabs and Africans, who come to them for the purpose of trade and search for investment. The province is considered one of the regions characterized by the diversity of its industries, quality and attractive prices, as well as commercial activities in various fields.

 It Is also distinguished by the beauty and sophistication of its buildings, which embody the aesthetics of modern Chinese architecture, as well as the spread of green spaces and vibrant squares throughout the day. It is also distinguished in terms of weather, with its atmosphere that resembles the tropical atmosphere with heavy rain, and the various cities of Guangdong Province are also characterized by easy access to it from different parts of the world throughout the day, as well as ease of movement between its various cities, thanks to the presence of an infrastructure that makes most of the cities of the province at the forefront of attractive cities for investment globally.

  Due to the existence of the commercial ports, Guangdong has a long experience in terms of commercial exchanges regionally and globally.

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The Theatrics of the US Debt Ceiling: Fiscal Austerity or Political Brinkmanship?

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It amazes me sometimes how pointless some discussions are to begin with, yet the hype they garner is just outrageous compared to relatively pressing issues in the mainstream spotlight. I am no Democrat supporter or even a backer of Mr. Biden – as my columns would effectively relay. But I am also no fan of idiocy when I see it (also apparent in my writings). And the ongoing tensions lacing the US polity, unfortunately, qualify that criterion by a long shot. While the debate around the debt limit is neither novel nor unprecedented, the preachy statements posited in the US Congress to justify the GOP posturing are downright ridiculous. But even if we don ignorance and accept their premise as is, I fail to see any alternative path toward economic balance and prosperity – assuming that is actually the end goal of the Republican lawmakers.

Before even delving into the nitty-gritty of the debt ceiling saga, let’s get some ambiguities clear and out of the way. The debt limit is a statutory cap on the total amount of money the US federal government is authorized to borrow. Currently, that amount stands at $31.4 trillion – already reached about two weeks ago. However, breaching that limit is well-nigh avertable: All the US Congress needs to do is raise that limit higher, and the chaos would disappear overnight. No risking the smooth functioning of the money markets, no pressure on the Treasury and the Federal Reserve, and no uncertainty while the world grapples with demons on geopolitical and economic fronts. But what about fiscal responsibility? Since 2001, the United States has consistently rolled around with budget deficits year after year and filled the gap with excessive borrowing to meet its financial obligations. In that period, the US has accreted about $20 trillion in national debt; debt held by the public as a percentage of Gross Domestic Product (GDP) has roughly tripled from 32% to 94%. Even for an economy as omnipotent as the United States, that’s prohibitive. But we need a thorough comparison to realize the underlying trends – both on the macroeconomic and political scale.

The US last enjoyed a fiscal surplus during the presidency of a Republican. Mr. George W. Bush. But you rarely witness a vociferous detour around that nook of history by any GOP members. It is perhaps because he squandered that surplus on tax cuts for the wealthy. Or on the invasion of Iraq. While one led to more inequity in an already lopsided social demography, the latter ushered those resources to decimate a foreign land on bogus pretenses. Another manifestation of the ‘Trickle-Down economic principle (apparently notorious for the Conservative fractions on both sides of the Atlantic) was during the Trump tenure. Mr. Donald Trump ran through another profligate tax-cutting regime to do good for the US economy. But ironically, the debt ceiling got raised three times during his own term, sans the drama we witness whenever the Republican Party holds either of the chambers of the US Congress but not the presidency. At this point, some people won’t need any more evidence to gauge the true intentions of the right-wing bloc baying for fiscal austerity. But let us sieve through the Democratic rule for a non-partisan outlook.

During the past two decades, only two episodes stand out apropos of record debt as a function of the US economy: the Great Recession 2007-09 and the Covid-19 pandemic. While I admit Mr. Biden’s nearly $2 trillion worth of American Rescue Plan helped (in large part) fuel the current inflation, it also helped avoid a devastating recession and jumpstart a speedy recovery. It kept businesses running, people employed, and spending buoyed. Notwithstanding that the unemployment rate in America is still at a multi-decade low, the economy could very well trip into another recession as the Fed moves aggressively to blunt the pain of price increases. But insofar as projections go, it appears that the American economy would brush past a prolonged recession and manage a relatively softer landing. According to recent estimates, annualized inflation has slowed consistently for the past six months, dipping to 6.5% from a summer peak of 9%. While the Republicans tried effortlessly to channel their narrative around the economy, their embarrassing rout during the Midterm elections was a testament to the facetious nature of their claims. 

Then there was the infamous standoff in 2011. We all know how the markets got rattled; borrowing costs spiked; and why the S&P downgraded the credit rating of US debt, even though we didn’t actually breach the limit. But we rarely ask: Why did the Obama administration end up with a debt of such mammoth magnitude? The answer is obvious. The Great Recession dried up tax receipts as the economy plunged into turmoil; the social safety net programs swelled, especially as spending on unemployment benefits soared. In 2008, the federal budget deficit stood at $458.6 billion, which staggered to $1.4 trillion in the subsequent year. Despite that, it took roughly eight years for unemployment to return to normality. Had the government raised taxes or cut spending drastically, the US would have witnessed something like Great Britain.

In the aftermath of the financial crisis, while America sustained spending to bolster the economy via borrowing, the Tory-led British government embarked on an austerity drive: Annual expenditure, as a percentage of GDP, was cut from 46% to 36%; spending on health infrastructure dragged down by half over the last decade. In hindsight, the difference is remarkable. While American wages have just stagnated over the course of the past 15 years, real wages in Britain have declined over the same period. While the US still contends with a rousing China for global economic superiority, Britain got recently supplanted by India (its former colony) as the fifth-largest economy in the world. The story couldn’t be any more lucid. 

Ultimately, the GOP political mumble of “adding guardrails” and “fiscal reforms” to bend the debt curve might be politically splendid, but to an economic mind, it is frankly garbage! And I have no doubt that regardless of cogent reasoning, the hardline Republicans would hold the government paralyzed – as was evident when they scrapped concessions from Mr. McCarthy in barter for his post as the House speaker. Nonetheless, the bottom line is that regardless of your disposition – Democrat or Republican, pro-spending or pro-austerity – the debt ceiling is, as aptly verbalized by Senator Ron Wyden, “not about adding new spending,” but “it’s about paying debts that the government [already] owes – debts that were incurred under presidents of both parties.”

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The Prolongation of BRICS: Impact on International World Order and Global Economy

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BRIC, coined by an economist Jim O’Neil in 2001 as an acronym for the four countries like Brazil, Russia, India and China. South Africa joined in 2010 and this organization turned into BRICS. The prime goal of BRICS was to the formation of the diplomatic and economic assistance framework, and the challenges to western influence in the global economic order. The Western cordially welcomed BRICS with the earnestness. The BRICS, five major emerging economies, together represent about 26% of the world’s geographic area, inhabitant of 2.88 Billion people which is about 42% of the world’s population and accounted for a quarter of the global GDP. The enlargement of BRICS was talked on June, 2022 at the groups summit which took place in Beijing. The 2023 summit will take place in South Africa. 

Russian Foreign Minister, Sergey Lavrov stated that Algeria, Argentina and Iran have already applied for joining in BRICS. In contrast, Saudi Arabia, Turkey , Egypt have declared their intense interest for becoming the member of BRICS and they are already engaged in the membership process. Now the question is what outcomes or impacts may be happened in the International world order and global economy in order to the expanding of BRICS?

Russia is the second largest producer of crude oil among OPEC+ members. Russia is a self-contained of its oil production. Because of Russia-Ukraine War, America and its European allies imposed sanctions on Russia and some European countries minimized their dependency on Russian oil. China imports its oil from Saudi Arabia, Russia, Iraq, Oman, Brazil and Kuwait. China increases at 21% its imports crude oil from Russia in 2022. The  member of OPEC+ decided to reduced their oil production by 2Million barrels per day two month before and it will continue in the end of 2023. The U.S.A and other western countries aggravated. 

Saudi Arabia is one of the world’s largest crude oil exporters, 11% of the world’s petroleum liquid production and has 15% of the world’s oil reserves. Recently it has declared that it will take initiatives to boost its oil production from 10 to 13 Million barrels per day. Egypt is a prominent petroleum producer and exporter. Egypt exports cotton and textiles, raw materials, chemical products and petroleum products. Egypt is a dialogue partner to the Shanghai Cooperation Organization. Iran is the world’s largest hydrocarbon Reserves in the world. Western world impose sanctions again and again. Iran is also the member of OPEC+ and Shanghai Cooperation Organization. Algeria, 10th largest natural gas reserver and 6th largest gas exporter. It is also a member of OPEC+. Turkey exports motor vehicles and their parts, gold and petroleum oil. It is the world’s 7th exporters of cotton. Argentina is a major exporter of wheat and corn. 

If Saudi Arabia, Egypt, Iran, Argentina, Turkey become the member of BRICS, it will enormous impact on the World order and global economy. 

1. The sphere of influence of the oil producer countries will be strengthen. The structure of oil market in the global economy will be changed. 

2. Lula da Silva, President of Brazil suggested to make a common currency for the BRICS countries. If it takes place, a more stable currency will be created. 

3. As China, Russia, Iran have a rivalry with the U.S.A, they will make more alliances to combat the U.S.A influence in the world. 

4. As the U.S dollar is the world’s dominant currency in the global financial and monetary system, and it is the Centre of U.S.A global leadership, the monopolistic influence of Dollar will be undermined. If BRICS countries will reach an agreement to continue their trade through a common currency, De-dollarization will be accelerated. 

5. As Turkey, Algeria, Iran, Egypt, Saudi Arabia and others have already shown their interest to join BRICS, it will accelerate to boost BRICS global influence. Russia, China will lead collectively in the world order. 

6. Most of the countries reserve crisis will be resolved. 

7. Saudi Arabia, Russia, Brazil will be able to export their oil collectively to China, India, Egypt and Turkey. China is Saudi Arabia’s biggest trading partner with more than $50 Billion. 

8. The investment of China and Russia in African continent will be extended. China is the largest trading partner of South Africa. South Africa is more advanced than any other countries of Africa because of its natural wealth and location. 

9. De-Dollarization will deteriorate the U.S.A capability to alter the behavior its opponents. If BRICS continuously expand, China will easily promote its agenda and grand strategy in the world. 

10. According to World Bank, BRICS grew at an average of 6.26 percent in 2021. On the contrary, G7 grew at 5.15%. If BRICS continues to attract other countries to join, it will emerge as a powerful force of the global leadership. The GDP is hoped to double to 50% of global GDP by 2030.

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