Author: Evan A. Feigenbaum, Council on Foreign Relations

There was a rather extraordinary back-and-forth from Hillary Clinton’s budget testimony last week. The Secretary of State told Congress that China is not just competing with the United States around the world but, for all intents and purposes, is eating America’s lunch.

‘Let’s just talk, you know, straight realpolitik,’ Mrs. Clinton told the Senate Foreign Relations Committee. ‘We are in a competition with China. Take Papua New Guinea: huge energy find … ExxonMobil is producing it. China is in there every day in every way, trying to figure out how it’s going to come in behind us, come under us.’ Read more…

Author: Rajaram Panda, IDSA, India

In a far-reaching strategic move, India and Japan signed the much-awaited comprehensive economic partnership agreement (CEPA) on 16 February. Under this agreement, India agreed to remove tariffs on 94 per cent of goods over the next 10 years. The deal will facilitate trade growth and enable both parties to reach the target of US$25 billion worth of bilateral trade by 2014 from its present US$10.3 billion. This deal has special significance. Barring a similar deal with Singapore and South Korea, this is the first trade deal India has signed with a major industrial country. Further, it will help India to fix its outstanding trade imbalance with Japan. Imports from Japan currently account for almost 60 per cent of India’s total trade.

After over a dozen rounds of negotiations, the agreement was finalised by Prime Minister Manmohan Singh and his Japanese counterpart Kan Naoto in October 2010. Read more…

Authors: Karl P. Sauvant and Ken Davies, Columbia University

So far, the discussion of revaluation of the yuan has been almost exclusively about the impact on China’s trade balance.

But it is at least as important to ask what effect it may have on the country’s inward foreign direct investment (IFDI), which plays such a crucial role in China’s economic development, and its outward FDI (OFDI), which is receiving increased attention worldwide. Read more…

Author: Ron Huisken, ANU

Australia’s Prime Minister Gillard has not contested the view that she is far more comfortable dealing with her domestic agenda than playing in the foreign affairs arena (even setting aside how the Rudd factor might play into this preference).

But she has to do both and the more quickly she learns the ropes and can judge when and on what she needs to reach for her passport the better. Read more…

Author: Morten B. Pedersen, UNSW@ADFA

After 22 years under direct military rule, Burma will soon have a new, hybrid government headed by former general and prime minister, now civilian president, U Thein Sein. This follows multi-party elections in November last year and the inauguration of a new constitution, which purports to establish a ‘discipline-flourishing democracy.’

The new system is neither democratic nor really civilian. Read more…

Author: Razeen Sally, ECIPE and LSE

World trade is recovering from its steepest fall since the 1930s — part of the biggest ‘deglobalisation’ since the Great Depression. Trade liberalisation has stalled globally and there is a climate of defensiveness on trade policy.

The West’s financial crisis translates into a deeper-than-normal recession and a slower-than-average recovery. In contrast, most emerging markets retained reasonably solid banks and balance sheets. That enabled them to rebound quickly, not least through fast ‘reglobalisation.’

Read more…

Author: Peter Drysdale

‘Be not afraid of greatness,’ wrote William Shakespeare in Twelfth Night. ‘Some men are born great, some achieve greatness and some have greatness thrust upon them.’ Whether the bard’s injunction is reassuring to those who have greatness in them, achieve it, or have it thrust upon them may be problematic and whether the three routes he suggests to greatness are unique and independent equally so. But certainly, in the end, it appears that greatness is thrust upon those that come to exercise its power.

As Jonas Parello-Plesner writes in this week’s lead essay, great powers, too, are moulded by events as much as, if not more than, by grand strategy. Read more…

Author: Jonas Parello-Plesner, European Council on Foreign Relations

Great powers are sometimes moulded by events as much as, if not more than, by grand strategy. In 1898, the United States — at the time an isolationist and anti-colonial power — entered onto the world stage after Spain allegedly sank the USS Maine in Havana Harbor.

The commercial adventures of the East India Company compelled the British state to intervene in China, sparking the Opium Wars, while in 1850, the British foreign secretary, Lord Palmerston, ordered the British navy into the Aegean in order to protect a British subject, Don Pacifico, and reclaim his lost property. All were defining historical moments, even if they were identified as such only in retrospect. Read more…

Author: Geoffrey K. See, Choson Exchange

Choson Exchange recently prepared a program for North Korean students to learn business, finance and economics overseas through university courses and internships.

They consulted a range of North Koreans on how it should structure such a program and ‘the Australia National University’ often came back as the model to follow. Up until 2006, ANU hosted North Korean trainees studying economics under programs supported by international and Australian aid agencies. The Australian exchange program was clearly well-regarded by outward-looking North Koreans.

Read more…

Author: Bob McMullan, ANU

Australia is committed to doubling its foreign aid budget by 2015. This is a commendable objective and one that bucks the trend among most other major aid donors.

In this context, Australian Foreign Minister Kevin Rudd has announced a review into ‘the efficiency and effectiveness’ of the Australian development assistance program. Ideally, this should be the last ad hoc review. Australia would be better served by a review model similar to the Quadrennial Diplomacy and Development Review (QDDR) process initiated by US Secretary of State Clinton. Read more…

Author: Robert Sutter, Georgetown University

Prime Minister Julia Gillard’s visit with President Barack Obama in Washington highlights Australia’s extraordinary role in American strategy toward the Asia Pacific. Australia is the US partner with the most extensive breadth of vision, interests and resolve to provide advice, criticism and support as the United States works to foster an Asia Pacific order of peace, stability and development.

The Australian visitors bring to the table an impressive record of commitment with the United States that is appreciated by all sides in politically fractious Washington: Australia’s elite troops and other support in Iraq and Afghanistan; its initiative in taking the lead in working with the United States in dealing with issues in Indonesia, other Southeast Asian countries and the Pacific Island nations; and its ability to provide perspective and experience for the United States in sometimes complicated interactions with Asia’s rising powers, especially China. Read more…

Author: Wang Tai Peng, Vancouver

‘The only thing we have to fear is fear itself,’ China’s Premier Wen Jiabao told the annual Central Economic Work Conference in Beijing in January as it met in the midst of a global recession and financial crisis.

By quoting former US President Franklin D. Roosevelt, the Chinese leader was clearly not just citing for rhetorical sake but alluding to what that US President did, initiating a New Deal for America in the midst of the Great Depression and creating social security in 1935, which ensured every citizen had a welfare safety net.

Read more…

Author: Barry Carin, CIGI

The G20 is again in the news following the February 2011 Finance Ministers’ meeting with media coverage dominated by news that leaders agreed on a ‘list of indicators to identify and reduce trade imbalances.’

This development comes under France’s G20 presidency, which inherits an unfinished agenda from past G20 summits. Read more…

Author: He Wenping, CASS

At the end of 2010, the news that the BRIC forum would accept South Africa as a full member of the group caught international media attention, as the current chair of BRIC, Chinese President Hu Jintao issued an invitation letter to South African President Jacob Zuma, inviting him to attend the third BRIC leaders’ meeting to be held in China in 2011.

While addressing the significance of South Africa joining BRIC (Brazil, Russia, India, China), Chinese Foreign Minister Yang Jiechi said that China believes South Africa’s accession will promote the development of BRIC and enhance cooperation among emerging market economies. Read more…

Author: Yang Razali Kassim, RSIS

Now that the Mubarak regime has been overthrown, many views have been offered on the likely polity of the new Egypt.

Several models have been cited, but two stand out: Iran and Turkey. Increasingly, the Indonesian model is also being considered. Read more…