Category Archives: Trade

Defeating China: Five Strategies

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Journal of Political Risk, Vol. 8, No. 4, April 2020

Fighter jets of the U.S. Navy Blue Angels demonstration squadron fly over the Lincoln Memorial during the Fourth of July Celebration ‘Salute to America’ event in Washington, D.C., U.S., on Thursday, July 4, 2019. Source: Official White House Photo by Joyce N. Boghosian.

By Anders Corr, Ph.D.
Publisher of the Journal of Political Risk

Since 1989, when China massacred thousands of its own people in Tiananmen Square to stop a pro-democracy protest, the country has arguably grown into the world’s most powerful and centralized state. China’s GDP by purchasing power parity (PPP) is approximately $25.4 trillion, while the U.S. GDP PPP is only about $20.5 trillion.[1] One man, Chinese President Xi Jinping, has almost total control of China’s economy and a leadership position for life. China’s authoritarian system, most recently, allowed the COVID-19 virus to become a pandemic. By the time it is controlled, it may have killed up to millions of people.

Compared to Xi Jinping, political leaders in democracies have comparatively little economic power. U.S. President Donald Trump, for example, has only partial control of the smaller (by purchasing power parity when compared to China) U.S. economy, and must be reelected in 2020 to continue his tenure for a maximum of an additional four years.

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Making Political Risk More Politically Relevant

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Journal of Political Risk, Vol. 7, No. 12, December 2019

Ukraine’s Independence Square in Fall 2013, taken only months before it erupted into violent protests culminating in the overthrow of the sitting government. A busy commercial and tourist hub that day, there was no sign of the war zone it would soon resemble. Photo: Alicia Ellis.

Alicia N. Ellis, Ph.D.
Arizona State University

Executive Summary

This report assesses the state of the academic literature on political risk and evaluates its contribution to understanding and mitigating risk for both business and political professionals. This assessment concludes that policy-relevant research has been in some cases limited and, in most cases, ineffectively communicated. Several major problems contribute to the persistent disconnect between policy, industry, and academia. Political scientists do not approach their research questions in a communicable way, nor do they often take the necessary step of connecting their research to an end use. Risk rating organizations have become overly reliant on cross-national aggregate models. Mixed methods research has been applied inappropriately and thus, ineffectively. Systematic biases have been introduced to models at a structural level, and conceptual difficulties plague some of the most basic questions for risk analysts.

Despite these problems, opportunities do exist for bridging the gap between research and practice, and producing policy-relevant research. This article proposes some recommendations for moving forward. Research questions must be structured in new ways to reflect the needs of end consumers that include non-academic professionals. Several research agendas in need of a practical-minded researcher are put forth, including the rise of China and what it means for global trade patterns, the ‘buy local’ movement spreading across the United States, and the problem of democratic consolidation. For each problem identified, the article makes suggestions for how we might reframe the questions in a way that produces more useful research on political risk. Continue reading →

Forget Presidential Politics: Sri Lanka’s Green Movement Is Its Best Hope Against China

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Journal of Political Risk, Vol. 7, No. 11, November 2019

Construction at the site of a Chinese-funded 1.4 billion USD reclamation project in Colombo on December 5, 2017.
Half of the reclamation project to build Colombo Financial City, previously known as Colombo Port City, has been completed, with Sri Lanka hoping to turn it into an international financial centre with special laws protecting foreign investment. Source: Wikimedia Commons.

Bertie Harrison-Broninski
Editor of The Civil Society Review

Sri Lanka, like many countries in the Belt and Road Initiative (BRI), is not powerful enough to resist China on political or economic grounds – but hope lies in its burgeoning environmental movements.

This Saturday (November 16th), Sri Lankans go to the polls to elect a new president. The frontrunners are Sajith Premadasa, current Minister for Housing, Development, and Cultural affairs, and Gotabhaya Rajapaksa, the ruthless military leader who played a large part in defeating the ‘Tamil Tigers’ during Sri Lanka’s civil war. Both have family ties to ex-presidents: Premadasa’s father, Ranasinghe, was president 1989-1993, and Rajapaksa’s brother, Mahinda, was from 2005-2015.

International media has largely focused on the geopolitical implications of the Rajapaksas regaining power. Mahinda Rajapaksa is seen as a key player in initiating China’s current economic ‘debt trap’ over Sri Lanka, which has now led to 99-year leases on territory around Hambantota Port and Colombo, where China is constructing an entire ‘Port City’. A President Gotabhaya Rajapaksa would rightly be seen as a return to China-friendly Sri Lankan foreign policy after President Maithripala Sirisena’s more US-aligned years in office. Continue reading →

War In The Taiwan Strait Is Not Unthinkable: Some Will Lose More Than Others

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Journal of Political Risk, Vol. 7, No. 11, November 2019

Screen capture of Chinese state media video of People’s Liberation Army (PLA) troops training for an assault on Taiwan’s presidential office. Pictured is a mock building at the Zhurihe military base in China, that mimics the actual building in Taipei. The video aired July 5, 2015. CCTV via Apple Daily.

Grant Newsham
US Marine Officer (Ret)

Whether anyone actually ‘wins’ a war is a philosophical debate.  The Germans and Japanese in 1945 might have thought wars do indeed have winners.  But perhaps it’s better said that in most conflicts some parties ‘lose more than others.’

Such would be the case if Beijing attempted to militarily subjugate Taiwan.  And Xi Jinping just might do so.  He declared in a January 2019 speech that “we (China) do not promise to renounce the use of force and reserve the option to use all necessary measures (to take Taiwan.)”[1]

The Battle for Taiwan would have truly global consequences, akin to the invasion of Poland by the Soviets and Germans in 1939.

However, much of the debate over a Taiwan Strait conflict focuses on preparation for and conduct of the PRC’s attack: whether Beijing will or won’t attack, what an attack might look like and Taiwan’s ability to defend itself, whether the US will or should get involved and whether it ought to sell Taiwan ‘this or that’ weapon.  Such discussion is useful, but the actual consequences and longer-term ripple effects of a fight over Taiwan deserve much more attention.[2]

This paper examines key aspects of what happens once the shooting starts, and the follow-on global economic and political effects.  The envisioned scenario is a full-scale PLA assault against Taiwan, but it’s worth noting that even a ‘limited’ assault–such as against one of Taiwan’s offshore islands–may not stay limited for very long: given Beijing’s oft-stated determination to take all of Taiwan, an off-shore island assault would only constitute a tactical objective in the march on Taipei, and would also have serious and wide-ranging political and economic consequences.

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Greenpeace Working to Close Rare Earth Processing Facility in Malaysia: the World’s Only Major REE Processing Facility in Competition with China

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Journal of Political Risk, Vol. 7, No. 10, October 2019

Partial screenshot from the Greenpeace website, taken on 10/3/2019, detailing Greenpeace’s leading role in the ‘Stop Lynas’ campaign. Source: Greenpeace.

Michael K. Cohen
Journalist

Rare earth – the colorful metals derived from 17 extraordinarily hard-to-mine chemical elements – are a little-known part of all of our lives. They are crucial elements of mobile phones, flat screen televisions and more than 200 other consumer electronic devices that we use every day.

But these exotic elements are needed for more than just phones and televisions. Their lightweight properties, and unique magnetic attributes, are indispensable to military assets that use sonar, radar or guidance systems, lasers, electronic displays, and myriad other mechanisms.

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