The geopolitical implications of renewable energy involve changes beyond the immediate impact on ... more The geopolitical implications of renewable energy involve changes beyond the immediate impact on energy and commodity streams. Energy policies of individual countries affect each other via different economic and political channels. This paper studies the role of renewable energy in EU-China relations, two leading powers in the field of renewable energy. Both polities have recently increased their individual ambitions towards decarbonisation of their domestic energy systems, and renewables play an increasingly important role in shaping their bilateral dealings. We therefore ask what influence renewable energy has on the relationship between both sides. To capture the effect, we employ the concept of policy interdependence in four areas related to renewable energy namely climate, energy, industry, and trade and investment policy. While these are often seen as separate fields, they are all related to renewable energy. Findings indicate that renewable energy has the potential to be a determinant of bilateral relations. Renewable energy contributed to greater alignment between the EU and China in the past, while increasing recourse to policy choices based on national priorities today creates obstacles to further cooperation. However, the patterns of policy interdependence identified in this study also suggest potential for renewed cooperation in the field of energy policy, depending on the capability of policymakers to see beyond the current structure of the bilateral relationship.
Both the EU and China agree on the importance of their bilateral economic relationship, but there... more Both the EU and China agree on the importance of their bilateral economic relationship, but there are differences in how the relationship is perceived. The gap is reflected in statements from officials, policymakers, business leaders and in the media as well as in policy documents from both the EU and China. While trade and investment flows that are central to the economic relationship generally occur through exchanges between economic actors, the state or polities such as the EU remain an important element in the relationship. This paper analyses the perceptions by the EU of China, the EU itself, the relationship between them, and also its wider global context, and the changes which occur in all of these. The analysis of the development of perceptions in the EU is based on official policy documents. In trade and investment policy, such documents may be considered to represent the positions of the EU based on its domestic policy process and its perceptions of the relationship based on an aggregation of interests. The paper argues that these perceptions have changed in significant ways reflecting developments in the EU and China, the relationship between them and its global context, as well as the interests and goals of the EU.
As the importance of China in the global economy has grown, changes in its domestic economy have ... more As the importance of China in the global economy has grown, changes in its domestic economy have increasing impact in the EU. However, a key factor is no longer the simple fact of China’s rise, but that its economy is undergoing rapid change through structural transition. Many scholars argue that the interaction of political and economic dimensions is a significant factor in the distribution of economic benefits of the EU’s relations with China among Member States. However, underlying these bilateral aspects of the relationship are domestic economic policies and structures both in the EU and China. In the future, domestic policy in China will have a greater effect in determining the structure of the bilateral economic relationship. These domestic policy dimensions outweigh any direct political intervention in the bilateral relationship. The increasing complexity resulting from structural change in China is likely to create redistribution in the relationship with the EU, notably among Member States. This “new normal” stage in China’s rise will create new winners and losers in the EU, with differentiated interests.
China’s outward investment policy has attracted attention not only for policy reasons, but also i... more China’s outward investment policy has attracted attention not only for policy reasons, but also in academic debate on the role of institutions in foreign investment. Formal institutions in the form of government policy and regulations have been central to China’s outward investment. This paper bases itself on a detailed analysis of Chinese policy and regulatory documents, which provide evidence of the motivations, substance and outcomes of investment policy. The paper argues that the factors determining investment policy are complex and evolving, and that elements of the policy may not be coherent and can be conflicting. It also argues that unintended outcomes are frequent, and that enterprises, including state-owned enterprises, attempt to escape the constraints of government policy and regulation. Thus, the relationship between institutions in China and enterprise behaviour is complex, and is not simply one of restriction or promotion of outward investment.
The US financial crisis and subsequent European sovereign debt crisis not only constitute serious... more The US financial crisis and subsequent European sovereign debt crisis not only constitute serious threats to the security of China’s foreign exchange reserves, but also provide an advantageous opportunity for China to change its ideas on foreign exchange reserve management. First, according to rules of thumb, the authors assess the optimal size of China’s foreign exchange reserves in terms of short-term external debt, imports and domestic liquid assets. Second, the paper estimates the asset structure of China’s foreign reserves based on the statistics on China’s holding of US and Japanese securities. Third, the authors calculate the People’s Bank of China sterilization costs from the perspective of issuing central bank notes and raising required reserve ratios. Fourth, the paper measures the total and net investment yield of China’s foreign reserves in terms of nominal dollars, real dollars (dollar index) and nominal renminbi. Finally, the authors put forward suggestions on how to accelerate the diversification of China’s international reserves.
This paper analyses the response of China to the widespread international adoption of the idea th... more This paper analyses the response of China to the widespread international adoption of the idea that climate change is a security, more specifically national security, issue. The paper demonstrates that despite the idea being current in China, and even having its advocates, the Chinese government has resisted labelling climate change a national security issue. The Chinese government accepts that climate change is a serious and urgent problem, but primarily views it through a development or economic rather than national security lens. Furthermore, the linkage made in the US and Europe between climate change and security raises issues that in China may be perceived as undermine its interests. Thus, despite the fact that the Chinese government recognises that specific problems associated with climate change have security implications, it is unlikely that it will fully accept that climate change must be raised to the level of a national security issue.
Censorship and freedom on the internet has become an area of contention between the US and China.... more Censorship and freedom on the internet has become an area of contention between the US and China. This has shifted focus from commercial to political and security concerns. The announcement from Google Inc that it had adopted a new position on china and wanted to negotiate with the Chinese government on how to operate an uncensored service there, was followed the US secretary of state giving a speech on internet freedoms. The Chinese government has rebuffed these moves, and insists on its right to control the internet in the name of ensuring stability. Using survey data which categorizes respondents by their computer use, this paper analyses the extent to which internet users in China may share with those in Western countries the same views on freedom of speech. The paper finds that only a small proportion of Chinese internet users are likely to give priority to concerns over freedom of speech, and give much greater weight to maintaining order. Expectations that internet users will press for removal of censorship, or that freer flow of information will lead to instability may be equally misplaced. Key words: China, internet, censorship, human rights, norms.
China’s outward investment has increased enormously and attracted considerable attention in recen... more China’s outward investment has increased enormously and attracted considerable attention in recent years. While China’s “go-global” strategy is frequently seen as being behind the increase in foreign investment, outside observers often have limited knowledge of the substance of the policy. This paper provides an overview of the framework in which China’s current policy on outward investment operates. Building on an extensive review of Chinese sources, it examines the policy support behind the growing international ambitions of Chinese companies. What are Beijing’s objectives, and to what extent does the Chinese government still have leverage vis-à-vis its companies, who are the institutions involved, and what are the policy tools they use to steer companies’ priorities?
This paper argues that the difference in perception of human rights between China and the EU is n... more This paper argues that the difference in perception of human rights between China and the EU is not confined to their official positions, but is also reflected in how Europeans and Chinese citizens see their human rights. There is strong evidence to suggest that the beliefs held in Europe on human rights and their likely development do not find much resonance in China itself. There is an implicit modernization theory behind widespread expectations that economic development in China will lead to increasing demands for human rights. The evidence based on international surveys suggests that this expectation is unlikely to be fulfilled. The priority given to human rights by the public in China is different from European views, and is likely to remain so. This in turn suggests that European policy on human rights in China is based on suppositions that conflict with how Chinese themselves see their world, and may therefore not be effective. Both Europe and China may have to accept that the others’ public opinion may vary considerably from what they would like it to be. Topics: norms, human rights and EU-China relations.
China’s economic growth has increased demand for agricultural goods. At the same time, prices are... more China’s economic growth has increased demand for agricultural goods. At the same time, prices are volatile and can lead to social instability. This has led the Chinese government to launch a series of measures to secure foreign supplies. Beijing has resorted to the international market, as well as state-supported agriculture projects abroad. Nevertheless, unlike in some countries, there is little evidence of a coherent government policy to support a major push into investment in agriculture abroad.
Purpose: This paper assesses the actual size and trends of the stock of foreign direct investment... more Purpose: This paper assesses the actual size and trends of the stock of foreign direct investment from China, its distribution across EU member states and business sectors, and also how it compares with investment from other developed and emerging economies.
China-European Union Investment Relationships: Towards a New Leadership in Global Investment Governance?, 2018
The EU-China treaty is being negotiated at a time of uncertainty in global economics and politics... more The EU-China treaty is being negotiated at a time of uncertainty in global economics and politics and also in the EU-China relationship. A key policy aim of the CAI is to increase investment flows between the EU and China, but it has the potential to reach beyond this basic goal in its significance. One aspect of wider importance for the CAI may be that the agreement itself could encompass innovations in the governance of FDI when compared to those contained in similar existing bilateral and regional agreements. In this sense, the CAI may be able to stake a claim to global leadership in the governance of FDI. But the economic and political context surrounding the agreement may determine how the possibility for leadership in the area of FDI governance will be realized.
The Evolving Relationship Between China, The EU and the USA: A New Global Order? , 2019
The Paris Agreement has been hailed as a significant, but not sufficient, step on the path to hal... more The Paris Agreement has been hailed as a significant, but not sufficient, step on the path to halting anthropogenic climate change. Rather than allocating emissions based on a top-down limit, the Paris Agreement depends on bottom-up ‘Nationally Determined Contributions’. The success of the agreement has to a significant degree depended on the increasing acceptance by governments and even businesses of the idea that climate change mitigation and economic growth can converge. Much of the optimism regarding the outcome of the Paris Agreement, even in the face of the threat of US withdrawal, is based on the belief that technology and economics will bring about decarbonization of economies. This chapter examines the possible conflict between the climate change order of the Paris Agreement and an economic order that increasingly focuses on national interests which are often given priority over an open global economy. The EU, China and the US have varying and conflicting commitments to these orders.
Climate and Energy Protection in the EU and China: 6th Workshop on EU-Asia Relations in Global Politics, 2019
EU and Chinese energy policies have both internal and external effects, and are dependent on poli... more EU and Chinese energy policies have both internal and external effects, and are dependent on policies adopted by other global energy actors. In order to evaluate the EU’s and China’s strategic options in this field, the interdependencies of EU and Chinese energy policy need to be addressed in a complementary manner. This chapter provides an initial study of EU and Chinese domestic energy policy and a discussion of their interactions, mediated through the renewables sector and the power grid. Moreover, this chapter suggests a framework for a systematic analysis of these interactions and how the interactions between Chinese and EU energy policy may occur in the two sectors; it provides the basis for detailed elaboration of a broader analysis.
Conceptual Gaps in China-EU Relations: Global Governance, Human Righs and Strategic Partnerships, 2012
China has for long periods had one of the most stable systems of government in history. For much ... more China has for long periods had one of the most stable systems of government in history. For much of the last two centuries, following the collapse of the Qing dynasty under internal and external pressure in the early 20th century, stability has been one of the central questions facing Chinese governments. During its history, on a continental scale Europe has never known the same degree of stability as many Chinese dynasties, although some parts of it have been relatively stable. In the last 50 years the European continent has achieved an almost unprecedented degree of political stability when compared with its own past, especially in its western part. Europeans today rarely seem to consider stability as an important political question. Chinese, by contrast, often appear obsessed by the question of stability.
The geopolitical implications of renewable energy involve changes beyond the immediate impact on ... more The geopolitical implications of renewable energy involve changes beyond the immediate impact on energy and commodity streams. Energy policies of individual countries affect each other via different economic and political channels. This paper studies the role of renewable energy in EU-China relations, two leading powers in the field of renewable energy. Both polities have recently increased their individual ambitions towards decarbonisation of their domestic energy systems, and renewables play an increasingly important role in shaping their bilateral dealings. We therefore ask what influence renewable energy has on the relationship between both sides. To capture the effect, we employ the concept of policy interdependence in four areas related to renewable energy namely climate, energy, industry, and trade and investment policy. While these are often seen as separate fields, they are all related to renewable energy. Findings indicate that renewable energy has the potential to be a determinant of bilateral relations. Renewable energy contributed to greater alignment between the EU and China in the past, while increasing recourse to policy choices based on national priorities today creates obstacles to further cooperation. However, the patterns of policy interdependence identified in this study also suggest potential for renewed cooperation in the field of energy policy, depending on the capability of policymakers to see beyond the current structure of the bilateral relationship.
Both the EU and China agree on the importance of their bilateral economic relationship, but there... more Both the EU and China agree on the importance of their bilateral economic relationship, but there are differences in how the relationship is perceived. The gap is reflected in statements from officials, policymakers, business leaders and in the media as well as in policy documents from both the EU and China. While trade and investment flows that are central to the economic relationship generally occur through exchanges between economic actors, the state or polities such as the EU remain an important element in the relationship. This paper analyses the perceptions by the EU of China, the EU itself, the relationship between them, and also its wider global context, and the changes which occur in all of these. The analysis of the development of perceptions in the EU is based on official policy documents. In trade and investment policy, such documents may be considered to represent the positions of the EU based on its domestic policy process and its perceptions of the relationship based on an aggregation of interests. The paper argues that these perceptions have changed in significant ways reflecting developments in the EU and China, the relationship between them and its global context, as well as the interests and goals of the EU.
As the importance of China in the global economy has grown, changes in its domestic economy have ... more As the importance of China in the global economy has grown, changes in its domestic economy have increasing impact in the EU. However, a key factor is no longer the simple fact of China’s rise, but that its economy is undergoing rapid change through structural transition. Many scholars argue that the interaction of political and economic dimensions is a significant factor in the distribution of economic benefits of the EU’s relations with China among Member States. However, underlying these bilateral aspects of the relationship are domestic economic policies and structures both in the EU and China. In the future, domestic policy in China will have a greater effect in determining the structure of the bilateral economic relationship. These domestic policy dimensions outweigh any direct political intervention in the bilateral relationship. The increasing complexity resulting from structural change in China is likely to create redistribution in the relationship with the EU, notably among Member States. This “new normal” stage in China’s rise will create new winners and losers in the EU, with differentiated interests.
China’s outward investment policy has attracted attention not only for policy reasons, but also i... more China’s outward investment policy has attracted attention not only for policy reasons, but also in academic debate on the role of institutions in foreign investment. Formal institutions in the form of government policy and regulations have been central to China’s outward investment. This paper bases itself on a detailed analysis of Chinese policy and regulatory documents, which provide evidence of the motivations, substance and outcomes of investment policy. The paper argues that the factors determining investment policy are complex and evolving, and that elements of the policy may not be coherent and can be conflicting. It also argues that unintended outcomes are frequent, and that enterprises, including state-owned enterprises, attempt to escape the constraints of government policy and regulation. Thus, the relationship between institutions in China and enterprise behaviour is complex, and is not simply one of restriction or promotion of outward investment.
The US financial crisis and subsequent European sovereign debt crisis not only constitute serious... more The US financial crisis and subsequent European sovereign debt crisis not only constitute serious threats to the security of China’s foreign exchange reserves, but also provide an advantageous opportunity for China to change its ideas on foreign exchange reserve management. First, according to rules of thumb, the authors assess the optimal size of China’s foreign exchange reserves in terms of short-term external debt, imports and domestic liquid assets. Second, the paper estimates the asset structure of China’s foreign reserves based on the statistics on China’s holding of US and Japanese securities. Third, the authors calculate the People’s Bank of China sterilization costs from the perspective of issuing central bank notes and raising required reserve ratios. Fourth, the paper measures the total and net investment yield of China’s foreign reserves in terms of nominal dollars, real dollars (dollar index) and nominal renminbi. Finally, the authors put forward suggestions on how to accelerate the diversification of China’s international reserves.
This paper analyses the response of China to the widespread international adoption of the idea th... more This paper analyses the response of China to the widespread international adoption of the idea that climate change is a security, more specifically national security, issue. The paper demonstrates that despite the idea being current in China, and even having its advocates, the Chinese government has resisted labelling climate change a national security issue. The Chinese government accepts that climate change is a serious and urgent problem, but primarily views it through a development or economic rather than national security lens. Furthermore, the linkage made in the US and Europe between climate change and security raises issues that in China may be perceived as undermine its interests. Thus, despite the fact that the Chinese government recognises that specific problems associated with climate change have security implications, it is unlikely that it will fully accept that climate change must be raised to the level of a national security issue.
Censorship and freedom on the internet has become an area of contention between the US and China.... more Censorship and freedom on the internet has become an area of contention between the US and China. This has shifted focus from commercial to political and security concerns. The announcement from Google Inc that it had adopted a new position on china and wanted to negotiate with the Chinese government on how to operate an uncensored service there, was followed the US secretary of state giving a speech on internet freedoms. The Chinese government has rebuffed these moves, and insists on its right to control the internet in the name of ensuring stability. Using survey data which categorizes respondents by their computer use, this paper analyses the extent to which internet users in China may share with those in Western countries the same views on freedom of speech. The paper finds that only a small proportion of Chinese internet users are likely to give priority to concerns over freedom of speech, and give much greater weight to maintaining order. Expectations that internet users will press for removal of censorship, or that freer flow of information will lead to instability may be equally misplaced. Key words: China, internet, censorship, human rights, norms.
China’s outward investment has increased enormously and attracted considerable attention in recen... more China’s outward investment has increased enormously and attracted considerable attention in recent years. While China’s “go-global” strategy is frequently seen as being behind the increase in foreign investment, outside observers often have limited knowledge of the substance of the policy. This paper provides an overview of the framework in which China’s current policy on outward investment operates. Building on an extensive review of Chinese sources, it examines the policy support behind the growing international ambitions of Chinese companies. What are Beijing’s objectives, and to what extent does the Chinese government still have leverage vis-à-vis its companies, who are the institutions involved, and what are the policy tools they use to steer companies’ priorities?
This paper argues that the difference in perception of human rights between China and the EU is n... more This paper argues that the difference in perception of human rights between China and the EU is not confined to their official positions, but is also reflected in how Europeans and Chinese citizens see their human rights. There is strong evidence to suggest that the beliefs held in Europe on human rights and their likely development do not find much resonance in China itself. There is an implicit modernization theory behind widespread expectations that economic development in China will lead to increasing demands for human rights. The evidence based on international surveys suggests that this expectation is unlikely to be fulfilled. The priority given to human rights by the public in China is different from European views, and is likely to remain so. This in turn suggests that European policy on human rights in China is based on suppositions that conflict with how Chinese themselves see their world, and may therefore not be effective. Both Europe and China may have to accept that the others’ public opinion may vary considerably from what they would like it to be. Topics: norms, human rights and EU-China relations.
China’s economic growth has increased demand for agricultural goods. At the same time, prices are... more China’s economic growth has increased demand for agricultural goods. At the same time, prices are volatile and can lead to social instability. This has led the Chinese government to launch a series of measures to secure foreign supplies. Beijing has resorted to the international market, as well as state-supported agriculture projects abroad. Nevertheless, unlike in some countries, there is little evidence of a coherent government policy to support a major push into investment in agriculture abroad.
Purpose: This paper assesses the actual size and trends of the stock of foreign direct investment... more Purpose: This paper assesses the actual size and trends of the stock of foreign direct investment from China, its distribution across EU member states and business sectors, and also how it compares with investment from other developed and emerging economies.
China-European Union Investment Relationships: Towards a New Leadership in Global Investment Governance?, 2018
The EU-China treaty is being negotiated at a time of uncertainty in global economics and politics... more The EU-China treaty is being negotiated at a time of uncertainty in global economics and politics and also in the EU-China relationship. A key policy aim of the CAI is to increase investment flows between the EU and China, but it has the potential to reach beyond this basic goal in its significance. One aspect of wider importance for the CAI may be that the agreement itself could encompass innovations in the governance of FDI when compared to those contained in similar existing bilateral and regional agreements. In this sense, the CAI may be able to stake a claim to global leadership in the governance of FDI. But the economic and political context surrounding the agreement may determine how the possibility for leadership in the area of FDI governance will be realized.
The Evolving Relationship Between China, The EU and the USA: A New Global Order? , 2019
The Paris Agreement has been hailed as a significant, but not sufficient, step on the path to hal... more The Paris Agreement has been hailed as a significant, but not sufficient, step on the path to halting anthropogenic climate change. Rather than allocating emissions based on a top-down limit, the Paris Agreement depends on bottom-up ‘Nationally Determined Contributions’. The success of the agreement has to a significant degree depended on the increasing acceptance by governments and even businesses of the idea that climate change mitigation and economic growth can converge. Much of the optimism regarding the outcome of the Paris Agreement, even in the face of the threat of US withdrawal, is based on the belief that technology and economics will bring about decarbonization of economies. This chapter examines the possible conflict between the climate change order of the Paris Agreement and an economic order that increasingly focuses on national interests which are often given priority over an open global economy. The EU, China and the US have varying and conflicting commitments to these orders.
Climate and Energy Protection in the EU and China: 6th Workshop on EU-Asia Relations in Global Politics, 2019
EU and Chinese energy policies have both internal and external effects, and are dependent on poli... more EU and Chinese energy policies have both internal and external effects, and are dependent on policies adopted by other global energy actors. In order to evaluate the EU’s and China’s strategic options in this field, the interdependencies of EU and Chinese energy policy need to be addressed in a complementary manner. This chapter provides an initial study of EU and Chinese domestic energy policy and a discussion of their interactions, mediated through the renewables sector and the power grid. Moreover, this chapter suggests a framework for a systematic analysis of these interactions and how the interactions between Chinese and EU energy policy may occur in the two sectors; it provides the basis for detailed elaboration of a broader analysis.
Conceptual Gaps in China-EU Relations: Global Governance, Human Righs and Strategic Partnerships, 2012
China has for long periods had one of the most stable systems of government in history. For much ... more China has for long periods had one of the most stable systems of government in history. For much of the last two centuries, following the collapse of the Qing dynasty under internal and external pressure in the early 20th century, stability has been one of the central questions facing Chinese governments. During its history, on a continental scale Europe has never known the same degree of stability as many Chinese dynasties, although some parts of it have been relatively stable. In the last 50 years the European continent has achieved an almost unprecedented degree of political stability when compared with its own past, especially in its western part. Europeans today rarely seem to consider stability as an important political question. Chinese, by contrast, often appear obsessed by the question of stability.
The Belt and Road Initiative and Global Governance, 2020
The necessity to resolve overcapacity problems in domestic industry is frequently cited as one of... more The necessity to resolve overcapacity problems in domestic industry is frequently cited as one of the key reasons for the Chinese government’s promotion of the Belt and Road Initiative (BRI). This chapter analyses the relationship between industrial overcapacity in China and the BRI. It assesses the degree to which the BRI and the related policy of “production capacity sharing” has had or may have an impact in overcapacity in China, and whether this domestic factor can explain China’s apparent attempt to reshape the global economic order through the BRI. The chapter uses trade and investment data and policy documents to analyze the relationship between the BRI and overcapacity, focusing in the steel and cement sectors which are key inputs to infrastructure which is central to the construction of the BRI. The chapter argues that while overcapacity is a key domestic policy concern, even if its reduction were the goal of the BRI it can have only marginal impact. In this regard the BRI makes no contribution resolution of the problem of overcapacity to the global governance, which, from a Chinese perspective, is dependent largely on domestic policy measures.
The geopolitics of energy has traditionally focused on security of access to supply of fossil fue... more The geopolitics of energy has traditionally focused on security of access to supply of fossil fuels. The fact that renewable energy resources are fundamentally different from fossil fuels reframes the problem the geopolitics of energy. In China, the geopolitics of energy has been viewed in the traditional frame of security of energy supply. Renewables have not been considered a geopolitical question, either by the Chinese government or scholars. The Chinese government approaches renewable energy from multiple dimensions, including energy supply, climate change, and environmental impacts. However, while exploitation of renewable energy resources themselves are central to Chinese government policy, this is matched in importance by the economic and industrial policy goals of exploitation of technology, production, markets, trade and investment in the renewables sector. Rather than the geopolitics of energy, industrial policy has been the key to renewable policy in China, and will in turn determine how the geopolitics of renewable energy develops in China.
China’s outward direct investment (ODI) has expanded enormously over the past decade, and it is n... more China’s outward direct investment (ODI) has expanded enormously over the past decade, and it is now one of the largest global sources of investment flows. Government policy and regulation has shifted from restriction of outward investment flows to permitting, supporting and encouraging ODI. However, the rapid increase in outward investment has brought with it new policy challenges, notably increased investment risks. The Chinese government has participated in the global system of governance of foreign direct investment (FDI) through Bilateral Investment Treaties (BITs), but to a greater extent than most others it has developed a complex set of domestic regulations and policies that also seeks to mitigate investment risks of companies investing outside China. This chapter will explore the development of the domestic and external strategies for governance of investment activities, especially in light of the prospective EU-China investment agreement. It will argue that while on the one hand China increasingly accepts and participates in international investment regimes, unique features of domestic policy have been an important aspect of ODI governance.
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