Iain Mills

Senior leaders from China, Japan and South Korea met in Beijing last weekend, where they agreed to work toward establishing a free-trade zone, the latest in a flurry of trilateral economic deals in recent months. But despite these developments, the geopolitical situation in Northeast Asia remains fragmented, and a multilateral architecture capable of containing latent regional threats is some way off. more

As China prepares for a once-in-a-decade change of leadership, the ouster of Bo Xilai and a series of significant financial reforms have been widely seen as signs that reformist elements in Beijing are in the ascendency. This analysis may be correct, but it needs to be tempered with a broader look at the Chinese political and policy landscape, which shows that reforms still lag in multiple key areas. more

A lack of institutionalization means that Chinese policy approaches are often fragmented and factionalized, both in terms of ideological formulation and implementation. Today, China's polity seems at a crossroads, no longer wedded to the heavily centralized, introverted strategic planning structures of the socialist years, but as yet unable to articulate responses to the dynamic transnational threats it faces in the 21st century. more

Economic volatility and a restrictive political system have prevented Vietnam from fulfilling its potential as a significant Southeast Asian actor. But with the “China+1” effect likely to gather momentum, and amid strong signals of reform emanating from Hanoi, there is renewed cause for optimism. The opportunity now being presented to Vietnam may be too compelling for even the hard-liners to resist. more

China's policy of non-interference in the affairs of other nations fails to protect its expanding overseas interests and has caused a trust deficit with regard to China’s intentions at an intergovernmental level. This raises the question of how long the non-interference policy can be sustained, and whether Chinese interests would be better served by abandoning it for a less rigid position.
more

With Western investors on the back foot in the past year, Chinese sovereign wealth funds have expanded their ownership of strategic overseas assets. While Chinese foreign investment is seen by many as a cause for geopolitical concern, these entities are becoming increasingly sophisticated and credible, representing one of the most viable mechanisms for restoring balance to global trade and investment flows. more

There is growing evidence that China is entering a new phase in its economic development, even as deterioration in the global macroeconomic environment has limited Beijing's policy options for reform and reduced its margin for error. With domestic systemic financial stress and social tension also both ticking upward, 2012 could prove to be one of the most challenging years yet in China's economic re-emergence. more

Following recent declines in headline inflation, weak power generation in October and deepening financial losses for power companies, speculation has once again picked up regarding potential coal and electricity pricing reform in China. While some form of price adjustment looks imminent, structural reforms to pricing mechanisms affect multiple domestic interest groups and are proving hard to manage.
more

Major Chinese participation in any European rescue plan would require significant material concessions from European leaders to gain any traction among Chinese policymakers. So far, the proposed concessions have been largely symbolic, such as promises to recognize China's market economy status. But far more tangible quid pro quos would be necessary to induce China to participate directly in any bailout package. more

Recent optimism regarding possible Chinese involvement in addressing the European debt crisis is misplaced given China's domestic political and economic conditions and resistance within the European Union itself. Meanwhile, the assumption that China will invest significant amounts of its sovereign wealth an as-yet-undefined bailout fund without any major concessions from the EU is deeply misguided. more

The Currency Exchange Rate Oversight Reform Act, approved in the U.S. Senate last week, carries significant risks for very little reward. At a time when U.S. economic credibility is at an all-time low, the bill ignores tangible measures China is taking to develop its currency regime and distracts from the need for a more introspective and pertinent discussion of the United States' economic challenges.
more

China-Russia relations took another step forward during Prime Minister Vladimir Putin's visit to Beijing last week. With the Arab Spring throwing the two governments into an unexpected alliance at the United Nations this year, the visit marked the continuation of attempts to build a deeper and less volatile relationship. That was hardly a certainty when the Russian delegation arrived in China for the two-day visit.

China has found itself behind the curve on Libya, its response revealing the disparate interest groups within its foreign policy apparatus and the challenges it faces when responding to international events. Despite previous progress, China's foreign policy apparatus needs to become more adroit at public positioning and institutionally consistent in its private diplomacy to secure its international rise. more

The recent market correction and an increasingly bleak economic outlook have sharpened the case for a G-20 economic grand bargain. China has the capacity to take a lead in any such arrangement, using its $3 trillion foreign exchange reserves as bargaining chips for reshaping the global economy to better suit its interests. This could form the bedrock of broad-based and coordinated policy action to address both East-West and North-South economic imbalances. more

When the global financial crisis broke in 2008, policymakers intervened to set the unholy precedent of nationalizing financial market risks. Moreover, this was done without addressing structural imbalances. Events of the last three weeks have demonstrated the ineffectiveness of previous interventions and underscored the case for an economic grand bargain to restructure and reinvigorate the global economy. more

China's social contract revolves around the Communist Party delivering the benefits of modernization to the country's citizenry, and not, as Western observers might hope, around the transition to multi-party democracy. Consequently, technocratic failure presents the greatest risk to the party's domestic credibility, as highlighted by the ongoing wave of public anger over the Wenzhou high-speed rail crash.
more

Since 2009, China's credit-fueled economic stimulus plan has increased overall indebtedness and created new risks to long-term headline growth. Among the most acute of these is local government debt. Clearing up the mess has emerged as a key challenge for maintaining strong economic growth. However, the solution requires a fundamental rebalancing of the power relations between central and local government.
more

Chinese Vice President Xi Jinping's recent three-country tour of Latin America was aimed at addressing concerns over the asymmetric and one-dimensional nature of China's relations in the region, which generally conform to the classic center-periphery model. Xi's visit outlined a blueprint for how China's incoming leadership intends to deepen its international relations and consolidate recent economic foreign policy gains. more

Some China-watchers have argued recently that the rule of law is weakening in the People's Republic. However, a less-commented-on countertrend is the re-emergence of legal processes inspired by indigenous conventions, such as trial by public opinion. This shift may explain China's more assertive foreign policy over the past 18 months and has significant implications for the country's leadership aspirations in Asia. more

One consequence of the global financial crisis has been new and accelerated patterns of Chinese trade and investment abroad. For the United States, the implications of this new multidirectionalism are significant. But with bilateral investment between the two countries contracting, the U.S. must adapt its approach to this issue to ensure it benefits from the forthcoming chapter in China's domestic growth story. more