Asia

China

  • Privacy
    Cyber Week in Review: Feb 28, 2020
    Controversial facial recognition start-up hacked; Lawmakers object to ICE searching Maryland driver’s license database; Court rules YouTube not a public forum; Apple shareholders express human rights concerns in vote; and Insights from the RSA Conference about accused Chinese hackers abandoning techniques after indictments.
  • China
    The WHO and China: Dereliction of Duty
    The WHO’s weak response to China’s mishandling of the COVID-19 outbreak has laundered China’s image at the expense of the WHO’s credibility. The time is ripe for clear leadership from the WHO based on science not politics.
  • COVID-19
    The Coronavirus, Oil, and Global Supply Chains
    As nations prepare for a possible health emergency, world leaders are realizing that the new coronavirus is going to be harder to contain than previously hoped. Mobilization is continuing, and concerns are mounting about both health and economic consequences. Washington, like other global capitals, is starting to worry about the economic effects of the coronavirus. Today’s reports that the city of Milan, Italy’s financial hub and its second largest city, was close to lockdown as a result of hints of a spread of the coronavirus in northern Italy was further evidence that the disease, and its economic consequences, are not under containment. Italy’s largest bank, UniCredit SpA, is among Italian firms encouraging its employees to work from home. South Korea has also been hit with the coronavirus outbreak as well as declining imports and exports to and from China. Automobiles are one of South Korea’s major export sectors and car manufacturing has been struck by the economic disruption in China. In both South Korea and Japan, major financial institutions are asking employees to work remotely from home. A telling economic indicator that the coronavirus is starting to take a global economic toll and not just a toll on China is falling prices in global oil and gas markets. Prices for liquefied natural gas (LNG) were already on a downturn from rising supplies and mild winter weather, but now have fallen to near rock bottom levels, with a few U.S. producers willing to pay potential users to take their surplus domestic natural gas away. Oil also started dropping again on Monday as it became clear that disruptions to global shipping and trade could go beyond China. Eighty percent of the world’s goods move by ship, and demand for shipping is starting to slip noticeably. To name one example, in the Persian Gulf, February loadings of large crude carriers dropped dramatically to single digits, down from the usual thirty tankers or more. A Citi update on the coronavirus this week noted that overall Korean exports are down by almost ten percent so far this month while imports are lower by fifteen percent. The bank predicts worsening trade effects on South Korea for March. The Port of Long Beach is also reporting a significant drop in container ship volumes by as much as forty percent. Demand for marine fuel globally was expected to average around 4.2 million b/d, according to statistics from the Organization of Petroleum Exporting Countries (OPEC). Aviation oil use is another 6.6 million b/d. Total transportation oil use averages around 58 million b/d, of which thirty nine percent reflects usage related to freight including twenty three percent from trucking, OPEC estimates. So far, analysts are only projecting a loss of 135,000 b/d of jet fuel demand in Asia. That could prove optimistic if travelers globally lose confidence in the safety of air travel as locations with coronavirus outbreaks continue to proliferate. In sum, the full influence of coronavirus disruptions on oil markets is likely yet to come. But perhaps, more important and lasting than the instantaneous loss of the economic value of trade and tourism, is the realization by leaders from around the world of how vulnerable their economies are to global supply chains. The Donald J. Trump administration was already focused on reducing the dependence of the U.S. defense industry on Chinese magnets, rare earth minerals, and other metals processing inputs and manufacturing. Now, some conservative voices are getting louder, including President Trump’s trade advisor Peter Navarro, who recently called on the U.S. pharmaceutical and medical supply industry to reduce its dependence on imports. In an unrelated move, Congressional Republican Senator Marco Rubio and Democratic Senator Chris Murphy sent a letter to the U.S. Food and Drug administration asking if it is prepared to screen the safety of pharmaceutical, food and medical supply imports from China. On the flip side, China could not be in a position, or willing, to export any vital medical equipment. Gordon Chang, a professor of American studies at Stanford with a focus on American-Chinese relations including the history of Chinese railroad workers in America in the nineteenth century, published a blog today warning that the economic chaos from China could make itself felt to American consumers by April. A possible unintended consequence of the coronavirus could be a tightening of supply chains back to a national economic champions policy in major economies. Since China’s vast population has served as an economic engine to the entire global economy in general, and oil, in particular, such a change would be dramatic. Already, the United States and Europe have focused on the risks of relying too heavily on Chinese equipment to establish Fifth Generation (5G) telecommunications networks. Earlier this month, U.S. Attorney General William Barr floated the idea that the U.S. and its allies should take a “controlling” stake in European telecom firms Nokia and Ericsson as a way to prevent Chinese firm Huawei from dominate 5G wireless markets. The Europe Commission has also approved $3.5 billion in state aid towards the European Battery Alliance aimed at making the continent independent in raw materials, processing facilities, battery manufacturing plants, and recycling facilities needed for the electric car industry. If the economic after-effects of the spread of the coronavirus cripple major economic supply chains of more crucial industries, expect to see an acceleration of such trends.
  • China
    African Students in Wuhan Confront Staying Amid Coronavirus Outbreak
    Alvin Young is a Rangel Fellow and master's candidate at the Elliott School of International Affairs at the George Washington University. Almost 5,000 African students study in Wuhan, China, the epicenter of the coronavirus outbreak. To date, health officials reported over 2,000 deaths and more than 70,000 infections across mainland China. In response, many governments have moved to evacuate their citizens from Hubei province. China is Africa's most important trading partner, and African governments are concerned about the coronavirus spreading to the continent. Undoubtedly, the situation in Wuhan is taking a psychological toll on African students, with many expressing well-founded fears about the coronavirus, potential food shortages, and pharmacies running out of masks. Students from the Ivory Coast and Ghana remain frustrated by their government’s refusal to evacuate and are not convinced that staying in China is their best option, and reports show that medical facilities in Wuhan and surrounding areas are struggling to replenish supplies. Several African students at Wuhan University of Science and Technology staged a silent protest last week. Michkey Aadney, an African post graduate student in Wuhan writes, “the idea that the mass evacuation of Africans in Wuhan amounts to importing the virus is wrong. It is time for African governments to show that they truly value the humanity of their citizens—by bringing us home.” But efforts are being made to reassure and assist the stranded students. According to some African students at Wuhan University, the school opened an online program to purchase groceries that will be delivered to dormitories. However, African students in Wuhan remain frustrated because there is no clear strategy coming from African governments to help nationals in China. Tisiliyani Salima, president of the Zambian-Wuhan student association opined that staying in Wuhan “doesn’t guarantee our safety. We are just in a country that has better medical facilities.” Yangtze University reported that Kem Senou Pavel Daryl, a Cameroonian student in China, contracted the coronavirus, but after two weeks of treatment began to show signs of recovery. Daryl is now under quarantine for fourteen days, and told the BBC, “No matter what happens I don’t want to take the sickness back to Africa.” Africa’s weak and underfunded healthcare systems make it especially vulnerable to the new coronavirus. For example, Ebola, albeit much deadlier than coronavirus, took more than 11,000 lives across coastal West Africa. Local health systems were not prepared for such an epidemic. It led to a reduction in trade, transportation, tourism, agricultural production, and a loss in confidence from key trading partners. According to the World Bank, "the overall impact of the Ebola crisis on Guinea, Liberia, and Sierra Leone have been estimated at $2.8 billion."  The African Union and the World Health Organization remain very concerned about a potential outbreak on the continent. AU member states such as Senegal are unable to match “big countries” in organizing emergency evacuations or specialized medical personnel and quarantine facilities that would be required. Kenyan President Uhuru Kenyatta likely speaks for many when he said, "We don't have the capacity to build hospitals in seven days,” referring to China’s rapid construction of a hospital in Wuhan to accommodate coronavirus patients. “So we must do everything that we can within our limited resources to ensure that we keep the virus completely away.” Hence, it may be that certain African governments make no moves to accept or facilitate the return of their citizens from Wuhan or surrounding areas. Though fears of outbreaks continue, Ethiopian Airlines is still operating flights to China, leading the World Health Organization to list it as one of thirteen countries in the region that need to be “particularly vigilant for the novel coronavirus.” Although some students feel abandoned by their governments, keeping African students in China may be the best alternative until a regional response to prevent a potential outbreak is fully implemented in Africa.
  • COVID-19
    The Coronavirus Outbreak Is the Shape of Things to Come
    Far from an anomaly, the Wuhan coronavirus outbreak is the shape of things to come as development and globalization are driving a new era of infectious disease.
  • China
    Podcast: Fred Hochberg on the U.S.-China Trade Deal and U.S. Trade Policy
    Podcast
    The phase one trade deal signed by the United States and China was heralded by many as an important first step in reducing trade tensions between the two countries. Yet, the benefits of trade have come under increased scrutiny by policymakers across the political spectrum in the United States. What are some common misunderstandings surrounding trade deals? What should the United States’ trade policy with China be? How might the upcoming presidential election affect U.S. trade policy? Tune in as C. V. Starr Senior Fellow and Director for Asia Studies Elizabeth Economy discusses these questions with Fred Hochberg, former chairman and president of the Export-Import Bank of the United States and author of Trade is Not a Four Letter Word.
  • China
    Podcast: James McGregor on the Shifting Landscape for U.S. Business in China
    Podcast
    January was an important month for U.S. business in China. China’s new investment law came into effect, and the phase one trade agreement de-escalated trade tensions. Meanwhile, businesses across China have been shuttered by the ongoing coronavirus outbreak leading to large-scale interruptions of international supply chains. What is the likely impact of these events for U.S. companies in China? How are these changes likely to affect the process of broader economic decoupling underway between the United States and China? Tune in as James McGregor, greater China chairman at APCO Worldwide, shares his on-the-ground perspective of the opportunities and challenges for U.S. business in China with Elizabeth Economy, C. V. Starr senior fellow and director for Asia studies.
  • China
    Cyber Week in Review: Feb 21, 2020
    Multiple countries attribute cyberattacks against Georgia to Russia; China tightens internet controls in response to coronavirus outbreak; Iran targets VPN providers to breach target networks; Bharatiya Janata Party uses deepfake technology for first time in Delhi Legislative Assembly election; Bloomberg campaign blurs line between advertising and organizing online; and European Union unveils plan to reassert “technological sovereignty.”
  • China
    Which Countries Are the Top 5 Carbon Emitters?
    Play
    The United States and China are responsible for more than 40% of global CO2 emissions. Which countries are the world’s biggest carbon polluters?
  • China
    The Future of U.S. Trade
    Play
    Speakers discuss U.S. trade, including the recent USMCA deal, trade disputes with China, and possible trade conflicts with Europe.
  • Southeast Asia
    Southeast Asia Continues to Struggle to Confront the Coronavirus
    Although Southeast Asia remains the region where the coronavirus is most likely to spread in significant numbers, most of the region’s states remain significantly underprepared to deal with the virus. Many started off slow as the outbreak emerged in China, with some Southeast Asia ministers strangely downplaying the severity of the virus or offering public suggestions of folk remedies to combat it. Many Southeast Asian states, perhaps fearful of drawing China’s anger, and heavily dependent on Chinese tourism, aid, and investment, did not initially close border links or substantially crack down on tourism from China, an unwise decision. In recent weeks, some Southeast Asian states have begun to respond more forcefully. (Singapore, the wealthiest state in the region, unsurprisingly responded to the outbreak from the get-go, with highly praised measures.) Thailand has proven more effective and responsive than at first, and other regional states have begun strengthening their defenses, though some remain wary of taking more stringent measures that might offend China by further restricting bilateral ties. Philippine President Rodrigo Duterte, for instance, was very slow to shut down flights to and from China. But most Southeast Asian states are vastly underprepared. Countries like Cambodia, Laos, Myanmar, and the Philippines have extremely poor public health systems, and a very limited ability to respond to a major disease outbreak. The Philippine government has come under criticism for slashing its health budget for 2020, and for panic-like conditions at hospitals dealing with the virus, where some suffer from a reported lack of basic supplies. Add in these countries’ autocratic governance, and allergy to transparency in public policy, and you have a further recipe for disaster. Cambodian Prime Minister Hun Sen initially claimed that the country had no cases of the virus, an impossible declaration. Then, just this past week, Hun Sen made another fateful decision. He allowed the cruise ship Westerdam to dock in the port of Sihanoukville. Although this was a compassionate measure, and widely praised, the Cambodian prime minister, and the Cambodian authorities, treated the threat of coronavirus from the ship with total blitheness. As if to show he was not worried about the virus, the strongman Hun Sen, in his typically grandiose style, did not wear a mask when greeting passengers (others with him did not wear masks, either.) The Cambodian authorities allowed people to exit the ship, and then leave the country, claiming that there were no infected people on board—another grandiose claim not backed up by evidence. Unfortunately, as the New York Times reported, “Only 20 people out of the 2,257 onboard were tested for the virus before disembarking, and that was because they had reported themselves to ship medical staff with various ailments.” It later turned out that one person on board was positive for the virus, but by then many passengers had traveled to other destinations around the world—a potential public health nightmare. Infectious disease experts believe the number of cases already known in Southeast Asia probably does not reflect the real spread of the disease, because of the region’s weak public health systems, and because people can be asymptomatic at first when they have the coronavirus. Given the region’s extensive trade and tourism links with China, it probably would be the next place for a massive number of coronavirus cases. But states in Southeast Asia will need massive assistance from the international community if the virus does spread en masse in the region.
  • Sub-Saharan Africa
    Secretary of State Pompeo Completes Trip to Africa
    Secretary of State Mike Pompeo recently completed his first trip in his current role to Africa. Over three days, he visited Dakar in Senegal, Luanda in Angola, and Addis Ababa in Ethiopia, where he also visited the head of the African Union. During the trip, Secretary Pompeo advocated for a stronger U.S.-Africa relationship amidst China’s growing role on the continent.  Though President Trump appears to have no interest in Africa beyond seemingly unfiltered insults, some in his administration have visited, thought not to the same extent as previous administrations. His wife Melania, his daughter Ivanka, Secretary of Commerce Wilbur Ross, and former Secretary of State Rex Tillerson have all visited the continent, though the latter was fired by Trump during his trip. Unlike past administrations, the Trump administration has no high profile, signature Africa policy initiative, such as President Bill Clinton’s Africa Growth and Opportunity Act (AGOA), President George W. Bush’s campaign against HIV/AID (the President’s Emergency Plan for Aids Relief, or PEPFAR), or President Barack Obama’s electric power initiative (Power Africa).  The Trump administration’s Africa strategy, Prosper Africa, envisages facilitating greater American private sector investment and trade with Africa. Its Development Finance Corporation has significant potential, building on and ultimately replacing the Overseas Private Investment Corporation, but it is underfunded and is only just now becoming operational. Prosper Africa’s roll-out rhetoric by then National Security Advisor John Bolton seemed more concerned with countering China’s political and security influence on the continent than on political, social, or economic development. Meanwhile the Trump administration’s new “travel ban,” suspending immigration to the United States from Eritrea, Nigeria, Sudan, and Tanzania because of alleged security shortcomings, is unlikely to encourage American private sector involvement with Africa.  But in general, American policy toward Africa—encouraging democracy and the rule of law, facilitating economic development, and supporting the development of African security initiatives and capabilities—remains consistent with that of previous administrations, driven below the cabinet level and from outside the White House. Assistant Secretary of State for Africa Tibor Nagy and USAID Administrator Mark Green get high marks for management, and Congress has blocked Trump administration efforts to eviscerate the various assistance programs from which Africa benefits.  Moreover, American soft power endures, going from strength to strength. China may have peppered the continent with Confucius Institutes designed to expand its influence through the study of Chinese language and culture, but the National Basketball Association’s (NBA) Africa league and the enduring power of Hollywood promote American mass culture to a much larger popular audience. Aubrey Hruby observes that the movie “Black Panther” and the NBA do more to build American influence than cabinet visits. And that is even leaving aside Oprah! It is always worth keeping in mind that the American relationship with Africa is much more than presidential administrations.