By the end of the century, the global average temperature could rise by more than 4°C (1). While this statistic may not sound particularly dramatic, climate change already affects many regions of the world. Consequences of increased fossil fuels in the atmosphere include intense heat, increased precipitation and tropical storms, and entire regions of the world submerging as glaciers and ice caps melt. The entire world population will be touched in some way, the poor disproportionately so.
The scope of damage of climate change largely depends on how successfully we can mitigate it through emission reduction. For instance, the U.S. Environmental Protection Agency (EPA), like most scientific predictions, has several models predicting world temperature in 2100. Ranging from the lowest emission scenario to the highest, the EPA’s charts show a range of environmental outcomes depending on how successful countries are in cutting emissions (2). The majority of the scientific community agrees that temperatures must not rise above 2°C to avoid the worst outcomes, but the highest emissions projections predict a raise of twice that. To avoid this, policymakers must work with industry to transition to clean energy sources, like renewables: energy collected from sources that are naturally replenished within a human lifetime, such as sunlight, wind, rain, waves, tides and geothermal energy.
As of this year, renewable sources now have a greater capacity to generate energy than coal, the second-largest world energy source (3). Clearly, renewable energy is the key to powering sustainable growth and avoiding the most dramatic climate outcomes in the future. However, the transition away from fossil fuels is a gradual process, though one that is speeding up as politicians and corporations face international and public opinion pressure, energy insecurity.
The adoption of the Paris Agreement at COP21 last year marked a new level of international cooperation to fight climate change; 195 countries agreed to a legally binding agreement to cut emissions (4). Industrialized countries committed to more dramatic reductions while developing countries were encouraged to do what they could to make growth sustainable.
As the self-proclaimed leader on global climate governance, with the largest connected and installed solar and wind capacity in the world, the EU has committed to some of the most drastic reductions. Aside from the agreement, it aims to reduce emissions by no less than 40% by 2030 in its 2030 climate & energy framework. To do so, the framework also strives to raise renewables to a 27% share of energy and improve energy efficiency by 27% (5). In addition to mitigating climate change, this initiative will make energy more affordable, increase EU energy security by lowering its reliance on fuel imports, contribute to growth and jobs and improve air quality.
Within the EU, Norway, Iceland, Austria and Sweden lead the way for renewable energy, generating more than 60% of gross electricity consumption using renewable sources (6). In fact, in 2014 Norway generated more electricity from renewables than its total electricity consumption, allowing it to export energy to its neighbors through interconnected grids (7). Most of this electricity comes from hydropower, although wind and thermal energy also have a share (8).
While Norway – and Scandinavian countries in general – has unique geographic endowments that facilitate the use of renewables, other European countries emphasize the development of this sector as well. Among large, industrial countries, Germany is a pioneer due to its eco-friendly culture that encourages investment in solar and wind energy, its main sources of renewables. Specifically, Germans seek to reduce nuclear energy use, especially after the Chernobyl and later Fukushima disasters, but cutting emissions is also a top priority. Germany is pioneering a policy initiative called energiewende, an overarching transition to renewable energy that has the support of 92% of the public (9). Even before COP21, Germany had the ambitious goal of generating at least 80% of its energy using renewables by 2050, a huge increase from 27% in 2014.
Germany is an extreme example, but all countries in the EU and the world must make adjustments to meet emission reduction targets. Luckily, technological advances make the use of solar, wind and other renewable energy much more feasible, economical and popular. Big data – “new methods of processing vast existing troves of digital information, previously unseen and unused, in a way that maximized efficiency” – promises to increase the amount of energy that existing solar panels and wind turbines can produce (10). For example, by analyzing data from weather stations, wind turbines, deforestation maps, weather modeling research, tidal phases and geospatial and sensor data, wind energy companies can maximize turbine efficiency, “squeezing every last drop of potential from the existing equipment” (11). Leaders in the energy sectors have shown a keen interest in the potential of big data; GE, Siemens and Vestas, a Danish energy company, have all undertaken pilot projects in this sphere.
European companies see big data as a potential technology to save their lead in the sector as the US and China catch up, but the global potential impact of big data is much broader. By increasing energy efficiency overall and reducing the costs associated with wind, solar and other renewable energy, big data can make renewables a more feasible option for developed and developing countries alike. In the past, high entry costs have limited the popularity of clean energy; both consumers and governments hesitate to adopt technologies that will cost more than fossil fuels and thus limit development and GDP growth. However, big data promises to increase wind outputs by around 20% with little cost, merely boosting efficiency (12).
Combined with a slew of other technological advances in the renewables sector, big data is chipping away at the traditional argument of developing countries against emissions reduction: that it will stunt their growth. Western countries, they argue, had the freedom to burn coal unchecked while their economies boomed, and it is unfair to deny them the chance to industrialize in turn.
Today, however, technology allows for smarter, sustainable growth. During the first wave of industrialization in the nineteenth century, renewable energy was not even an option; today, it grows more and more sophisticated each year. As ex-World Bank development specialist Charles Kenny noted in Bloomberg, it is out of the question to demand that the world’s poor sacrifice development for climate change mitigation (13). In most cases, fossil fuels remain the cheapest and most reliable sources of energy to power economic growth and raise living standards. Accordingly, global emissions between 2000 and 2010 increased more quickly than in previous decades, mainly from rapidly industrializing countries like China (14).
And yet, developing countries can and must strive to lower emissions. They will be disproportionately affected by climate change; if nothing else, being forced to spend on mitigation and adaptation will take away from growth. And furthermore, there is no way to avoid a disastrous future without the cooperation of developing countries on emission reduction.
In order to facilitate sustainable development powered by renewable energy around the world, rich Western countries at the vanguard of innovation in the renewable sector should facilitate technology transfers and investment in renewable infrastructure in the developing world. Take the EU: its trailblazing in this sphere is admirable, but hardly enough to stave off climate disaster if the rest of the world does not cooperate. In 2013, the top ten emitters of CO2 in the world included only two Western countries, and fewer than half were developed nations: the top emitter was China, followed by the U.S., India, Russia, Japan, Germany, Iran, Korea, Saudi Arabia and Brazil (15). Clearly, to address this issue in any comprehensive way, we must tackle it globally – whether this approach will be successful remains to be seen.
(1) “Future of Climate Change.” US Environmental Protection Agency, n.d. https://www.epa.gov/climate-change-science/future-climate-change. Accessed 6 November 2015.
(3) Walker, Andrew. “Renewable energy capacity overtakes coal.” BBC News, 25 October 2016. http://www.bbc.com/news/business-37767250. Accessed 6 November 2016.
(4) “Paris Agreement.” European Commission, 8 November 2016. https://ec.europa.eu/clima/policies/international/negotiations/paris/index_en.htm. Accessed 8 November 2016.
(5) “2030 climate & energy framework.” European Commission, 8 November 2016. https://ec.europa.eu/clima/policies/strategies/2030/index_en.htm. Accessed 8 November 2016.
(7) “Proportion of electricity generated from renewable sources, 2014.” Eurostat, 28 July 2016. http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Proportion_of_electricity_generated_from_renewable_sources,_2014_(%25_of_gross_electricity_consumption)_YB16.png. Accessed 7 November 2016.
(8) “Renewable energy production in Norway.” Government.no, 11 May 2016. https://www.regjeringen.no/en/topics/energy/renewable-energy/renewable-energy-production-in-norway/id2343462/. Accessed 8 November 2016.
(9) Kunzig, Robert. “Germany Could be a Model For How We’ll Get Power in the Future.” National Geographic, 15 October, 2015. http://ngm.nationalgeographic.com/2015/11/climate-change/germany-renewable-energy-revolution-text. Accessed 8 November 2016.
(10) Keating, Dave. “Big data is about to transform renewable energy.” DW, 28 Oct 2016. http://www.dw.com/en/big-data-is-about-to-transform-renewable-energy/a-36189374. Accessed 5 November 2016.
(13) Kenny, Charles. “Poor Countries Shouldn’t Sacrifice Growth to Fight Climate Change.” BloombergBusinessweek, 29 August 2014. http://www.bloomberg.com/news/articles/2014-08-29/poor-countries-shouldn-t-sacrifice-growth-to-fight-climate-change. Accessed 8 November 2016.
(15) Boden, Tom and Bob Andres. “Ranking of the world’s countries by 2013 total CO2 emissions from fossil-fuel burning, cement production, and gas flaring.” Carbon Dioxide Information Analysis Center, n.d. http://cdiac.ornl.gov/trends/emis/top2013.tot. Accessed 8 November 2016.
Image: © Goncharnazar | Dreamstime.com - KIEV, UKRAINE - Nov 29, 2015: Ukrainians Take A Part In The Ukrainian Global Climate March Photo
Dubai may soon be home to the world’s first sharia-compliant trade bank (1). In a push to make the city the center of the Islamic financial world, the Dubai Islamic Economy Development Centre (DIEDC) is negotiating with the United Arab Emirates (UAE) Central Bank to establish the Emirates Trade Bank. According to the DIEDC, the bank is close to obtaining necessary regulatory approval (2).
According to the DIEDC, the bank will focus on financing international trade and commodities: “Emirates Trade Bank will exclusively offer integrated trade and international commodity financing solutions, through leveraging and mobilizing the infrastructure and logistics systems of the UAE” (3).
The UAE, and Dubai specifically, is already renowned for its advanced infrastructure and regulatory environment that makes it a major business hub of the region. For 2017, the World Bank ranks the UAE 26 of 190 economies on its ease of doing business index with a 77/100 rating, by far the best in the region (4). The Emirates Trade Bank represents the UAE’s strategic goal taking its business-friendly reputation one step further to become a major financial hub.
Due its strategic advantages, Dubai is positioned to redirect international trade and commodity flows in the region through the UAE (5). Showing how this can be accomplished, a UAE-sponsored Forbes article on economic development points out growing global interest in investing in Africa and the Middle East and presents Dubai a gateway to these markets (6). As such, the UAE hopes that the trade bank will help double the country’s trade flows by 2020 by offering a gateway for trade and finance into the region.
It is also worth noting that the Emirates Trade Bank would be fully compliant with sharia law, following Islamic law as it relates to the financial sector. The UAE is already a leader in the Islamic finance world, having established the first Islamic bank in the world in the 1970s (7). The new trade bank, then, would further solidify the UAE’s status as the “Capital of the Islamic Economy,” in the words of a major UAE newspaper (8).
The establishment of an Emirates Trade Bank also shows the growing relevance of Islamic finance. Crucially, the bank would not merely service regional trade and investment but seeks to attract international clientele looking to trade with the region, especially in commodities. Of course, oil stands out as the region’s main commodity demanded internationally.
Originally, sharia-compliant finance was formalized in the 1960s as the discovery of oil wealth fueled global interest in the Middle East’s trade and finance institutions. Today, oil continues to drive Middle Eastern trade with the rest of the world, which could be part of the reason the UAE is looking to establish an investment bank that deals specifically in trade and commodities. However, the Emirates Trade Bank has the potential to facilitate expansion of connectivity between the region and the rest of the world by providing a stable and easy-to-access framework for investment. In this way, the Emirates Trade Bank could help advance not just UAE financial interests but also promote investment and growth in the entire region.
(1) Sharia law refers to the moral and practical guidelines of Islam as dictated by the Quran and the life of the Prophet Mohammed. As it relates to finance, Sharia law emphasizes risk sharing in raising capital, avoiding usury (charging interest) and preventing risk and uncertainty. Ross, Marc. “Working With Islamic Finance.” Investopedia, n.d. http://www.investopedia.com/articles/07/islamic_investing.asp. Accessed 26 October 2016.
(2) Mena. “Dubai lines up first sharia trade bank.” Global Trade Review, 19 Oct. 2016. http://www.gtreview.com/news/mena/dubai-lines-up-first-sharia-trade-bank/.
(4) Everington, John. “UAE improves standing in World Bank’s Ease of Doing Business Survey.” The National, 26 October 2016. http://www.thenational.ae/business/economy/uae-improves-standing-in-world-banks-ease-of-doing-business-survey
(5) Staff. “Establishment of Emirates trade bank in Dubai.” Emirates 24/7, 13 October 2016. http://www.emirates247.com/business/establishment-of-emirates-trade-bank-in-dubai-2016-10-13-1.641917
(6) “Dubai: World-Class Infrastructure and a Global Hub for Trade, Transport and Tourism.” Forbes Custom, n.d. http://www.forbescustom.com/EconomicDevelopmentPgs/DubaiWorldClass.html. Accessed 26 October 2016.
(7) Emirates 24/7. Ibid.
(8) Forbes Custom. Ibid.
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Ever since the Paris Agreement was signed at COP21 in December 2015, the 195 countries involved – including the U.S. – have hurried to take measures to decarbonize their own economies. Though the agreement does not enter into force officially until 2020, the Department of Energy (DoE) has been proactive in reporting on America’s progress toward a carbon-neutral economy, one of the provisions of the agreement is consistent public reports by governments on how well they are able to implement their targets. In this vein, the DoE released a new report titled “Revolution… Now: The Future Arrives for Five Clean Energy Technologies” in September (1). The report highlights impressive increases in capacity and decreased costs for key technologies, painting an overall optimistic picture of the U.S. clean energy landscape both today and in the coming years.
The report focuses in on several key energy technologies that are gaining traction in the U.S.: wind power, solar PV (distributed and utility-scale), LEDs and electric vehicles (EVs) (1). All of these have made great headway in the U.S. market since 2008. Costs of each technology have been reduced by between 41% (land based wind) and 94% (LED bulbs), which in turn has stimulated much more widespread adoption of all technologies (1). Investment into R&D in recent years has already led to increases in capacity and higher market penetration; nearly half a million EVs drive on U.S. roads today, and solar PV generates sufficient energy to power more than 2 million homes (1).
In highlighting these accomplishments, the DoE references back directly to the Paris Agreement, emphasizing that “the clean energy revolution is already underway, is already providing real-world benefits, and continues to promise new solutions on the horizon to address our most pressing energy challenges” (1). This tone speaks to the great urgency that the U.S. feels to comply with the commitments of COP21, positioning itself as a leader in the global climate change regime by underlining domestic accomplishments. In fact, the Mission Initiative announced at Paris binds participating countries to double their clean energy R&D by 2020, and the U.S. seeks to publicize its progress along and commitment to this benchmark.
Along this theme, the report stresses great opportunity for growth through increased research and investment in clean energy technologies in the near future. Beyond emphasizing the accelerating expansion of the five established technologies outlined above, it also pinpoints several more futuristic technologies that do not enjoy widespread use today, but the DoE nonetheless remains confident they will gain traction soon with further development. These technologies, grouped under the heading “Revolution Next,” include super trucks – increased efficiency 18-wheelers – smart buildings, and lightweight material for the purpose of decreasing car mass and thereby boosting fuel efficiency (1). In addition, the report discusses four other emerging technologies: fuel cells, grid-connected batteries, energy management systems and 3D printing, all of which are positioned “on the cusp of wider deployment in the coming years” (2). Though not the main focus of the report, this section positions the U.S. energy sector as forward-looking and constantly striving to harness and develop new innovations.
In addition to emphasizing the U.S.’s advances along the path to carbon neutrality and cutting emissions, the DoE underscores the growing energy independence of the U.S. and how homegrown clean energy technologies facilitate this transition. As the concluding section states, “with the continued progress in critical renewables and energy-efficient technologies like these, we can look forward to a future of clean, American-made energy” (1). Unpacked, this phrase speaks to the two key points of the report: the U.S. is making good progress on its COP21 commitments, and it is working to become less reliant on foreign energy imports. The first point addresses mainly an international audience and certain components of the American civil society particularly concerned with climate change while the second speaks more directly to a domestic audience, showcasing throughout the report how investment in clean energy can benefit the U.S. economy by adding jobs and decreasing import reliance. As the DoE report implicitly argues, there are no real losers in the advancement of clean energy – from domestic consumers to American workers to future generations who will grapple directly with the effects of climate change, all can benefit from the increased development and implementation of clean energy.
(1) Donohoo-Vallett, Paul. “Revolution… Now: The Future Arrives for Five Clean Energy Technologies.” Department of Energy, September 2016. http://energy.gov/sites/prod/files/2016/09/f33/Revolutiona%CC%82%E2%82%ACNow%202016%20Report_2.pdf.
(2) “Secretary Moniz Releases Report Showing the Cost Reductions and Rapid Deployment of Clean Energy Technologies.” Energy.gov, 28 September 2016. http://www.energy.gov/articles/secretary-moniz-releases-report-showing-cost-reductions-and-rapid-deployment-clean-energy-0.
(3) Cuff, Madeline. “DoE trumpets clean tech ‘energy revolution’.” GreenBiz, 11 October 2016. https://www.greenbiz.com/article/doe-trumpets-clean-tech-energy-revolution.
(4) “Paris Agreement.” European Commission, 15 October 2016. http://ec.europa.eu/clima/policies/international/negotiations/paris/index_en.htm.
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Despite recent technological developments, self-driving cars remain far from ready to hit the commercial market. Substantial obstacles remain to be overcome; yet this innovation promises to change the way we think about transportation, navigating a city and even space overall. The race is on to put the first driverless vehicle on the market, with companies like Google, Uber and Tesla anxious to beat out underdog competitors from countries like China and Singapore. In this way, the contest to perfect this technology becomes symbolic of American entrepreneurs’ anxiety to stay ahead of Asian competition, particularly in high-tech industries that require massive levels of investment in R&D.
Recent advancements in the technology of self-driving cars promise to make them much safer before the technology hits the commercial market. Customer apprehension remains strong when faced with the prospect of relinquishing control over the steering wheel; publicized crashes involving self-driving vehicles, such as the Tesla’s fatal accident last May and Google’s recent incident (though no one was harmed) fuel fears as to the reliability of driverless vehicles (1,2). Recent technology advances address these flaws: for instance, Tesla developed a new radar-reliant update to its autopilot system in response to the fatal crash involving this system (3).
While the technology remains far from perfect as evidenced by these occasional flaws, one could argue that driverless cars are still a safer option than those driven by humans. Though it is very difficult to engineer an entirely fail-proof machine, decades of driving history clearly show that people are equally, if not more so, prone to accidents purely due to human error. Each year, more than one million people die globally in motor vehicle accidents, the majority of which are caused by human error (4). Roughly 30,000 of these are in the US (4). And while accident and fatality rates have been improving each year since the very invention of cars, this trend reversed in 2015 with fatality rates rising and continuing to rise in the first half of 2016 (4). This is likely due to increasingly distracted driving, with technology such as smartphones taking drivers’ eyes and hands off the road like never before. But whatever the cause, the fact remains that driverless cars are only getting safer while human-operated vehicles evidently are not.
Beyond the obvious safety concerns, self-driving cars face opposition among those opposed to the very idea of them. According to a recent survey conducted by the vehicle-buying guide Kelley Blue Book, a “slim majority” reported they did not want to give up control of their vehicles (5). For these Americans, the attachment to the very act of driving their cars is enough to cause resistance to a technology that promises to make the roads safer and less congested, not to mention freeing up valuable time – the average American commutes 25 minutes each way to work, which means that many spend more than an hour each day behind the wheel (6).
Like all nostalgia for simpler, less technologically advanced times, such sentiments will likely dissipate once the benefits of self-driving cars manifest themselves, especially if people suddenly find they have an extra hour or more to spend on more productive tasks than sitting in traffic. In this way, driverless cars may have a hidden benefit beyond the ones already widely extolled; they could easily boost productivity across the nation and the world by freeing up hours of time, or at the very least improve quality of life by making driving a passive and therefore less stressful experience.
More tangible benefits that driverless cars promise to deliver include making traffic flow more smoothly by reducing or eliminating traffic jams. Intelligent cars promise to banish the “phantom traffic jam,” the phenomenon that happens due to no tangible obstructions in the road but simply as a shock wave effect when one driver brakes, triggering a shock wave of slowdowns that can extend for miles downstream. The argument goes that a network of cars that can all communicate with one another will prevent such suboptimal human driving behaviors and maximize the speed with which all drivers on the road can arrive at their destinations (7).
While they promise to make our lives much easier in the near future, this innovation also instills great anxiety in American innovators as they scramble to put a self-driving car on the market before their foreign counterparts. Specifically, the race for the driverless car feeds into the American paranoia of being economically overtaken by rapidly developing Asian countries. News that Didi - the Chinese ride-sharing equivalent of Uber - is speaking with start-ups and engineers in hopes of incorporating the technology into its services, and of Singapore launching the first real experiment in self-driving cars in the form of a taxi program, seems to portend what many fear: that America is no longer the center of global innovation, outpaced and obsolete (8,9). However, it is wise to keep in mind that these initiatives still largely rely on American-grown technology; and moreover, the US has little to gain in testing driverless cars at home in the early stages of the technology. The outrage and skepticism over Tesla’s and other accidents show that Americans are unlikely to embrace self-driving cars until the technology is largely perfected. Introducing them too early would only lead to backlash over inevitable missteps, so it is wise to wait and allow others to test for potential issues and fix them before exposing American consumers to this technology on a wide scale.
(1) Vlasic, Bill and Neal E. Boudette. “Self-Driving Tesla Was Involved in Fatal, U.S. Says.” New York Times, 30 June 2016. http://www.nytimes.com/2016/07/01/business/self-driving-tesla-fatal-crash-investigation.html?_r=0.
(2) Nunez, Michael. “Google’s Self-Driving Car Sends Operator to Hospital.” Gizmodo, 5 October 2016. http://gizmodo.com/googles-self-driving-car-crash-sends-operator-to-hospit-1787501759.
(3) Cardinal, David. “Tesla responds to Autopilot issues with major new radar-reliant update. Extreme Tech, 12 September 2016. http://www.extremetech.com/extreme/235418-tesla-responds-to-autopilot-issues-with-major-new-radar-reliant-update.
(4) Oremus, Will. “Self-Driving Cars are Getting Better. Are Human Drivers Getting Worse?” Future Tense, 6 October 2016. http://www.slate.com/blogs/future_tense/2016/10/06/human_car_fatalities_are_rising_are_self_driving_cars_the_solution.html.
(5) Burt, Jeffrey. “Many Americans Dismayed by the Advent of Self-Driving Cars.” EWeek, 6 October 2016. http://www.eweek.com/mobile/slideshows/many-americans-dismayed-by-advent-of-self-driving-cars.html.
(6) “Average Commute Times.” WNYC, n.d. https://project.wnyc.org/commute-times-us/embed.html#5.00/35.978/-95.004. Accessed 7 October 2016.
(7) Gibson, David K. “Can we banish the phantom traffic jam?” BBC, 28 April 2016. http://www.bbc.com/autos/story/20160428-how-ai-will-solve-traffic-part-one.
(8) Neiger, Chris. “Didi Chuxing is Taking Aim at Driverless Cars.” The Motley Fool, 9 October 2016. http://www.fool.com/investing/2016/10/09/didi-chuxing-is-taking-aim-at-driverless-cars.aspx
(9) Liang, Annabelle and Dee-Ann Durbin. “World’s first self-driving taxis debut in Singapore.” Associated Press, 25 August 2016. http://bigstory.ap.org/article/615568b7668b452bbc8d2e2f3e5148e6/worlds-first-self-driving-taxis-debut-singapore.
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Despite having one of the strongest, most developed economies in the region, Japan has suffered significantly during the global financial crisis. Its export volume fell sharply and continues to lag with low demand among its trading partners and slowing industrial production within Japan itself and around the world. Adding insult to injury, rising agriculture prices and a global commodity price boom further pushed the Japanese balance of payments into deficit. Today, Japan continues to face periodic trade deficits as export volume continues to fall, partly due to the strength of its currency, though an impending trade deal with the EU could help.
A highly developed and industrialized country, Japan is abundant in capital and skilled in producing finished goods like electronics and cars, as well as “added-value” goods, including processing inputs destined for export and further assembly into manufactured goods abroad. Meanwhile, its land and resource scarcity means that Japan must import large amounts of food, commodities and other inputs for its industrial production. Accordingly, its top imports by value are oil, electronic equipment, machinery used in manufactures, and medical and technical equipment (1). Though agricultural products do not top the list, Japan also imports around 60% of its food in terms of calories (2).
As such, Japan’s balance of payments is heavily affected by global prices for agriculture and commodities, which are notoriously volatile in the face of global boom and bust financial cycles. Since the financial crisis of 2007, its balance of trade has declined steadily, reaching a low of nearly -3000bn yen in 2014 (3). This was largely due to the global commodities price boom that lasted for the decade following 2003, as well as rising global oil prices until the summer of 2008 (4). These factors also contributed to Japan’s overall slowing of industrial production during this time period as the global price of inputs rose and demand for the finished products fell (4).
One main such product sector is automobiles, the country’s largest export product, comprising 15% of all total exports; Japan has one of the most technologically advanced auto sectors in the world. Other top exports include manufactures like iron and steel products, semi-conductors, auto parts and power generating machinery (2). Generally speaking, Japan’s main export categories are consumer durables, industrial supplies, and capital equipment, together comprising more than 90% of total export volumes.
In response to the financial crisis, demand for all of these export categories fell as consumers in the US and Europe (over 40% of Japan’s export market) demanded fewer Japanese consumer goods and developing Asian economies (over 50% of the export market) saw a slowing down of their manufacturing sectors, thus demanding fewer industrial supplies and capital equipment (4). In addition, the yen’s appreciation in recent times has made Japanese exports less competitive on the global market, further contributing to the decrease of export volumes (4).
It is this final factor that continues to pull Japanese trade into deficit even as the global economy recovers. According to recent reports, Japan’s trade balance for August slipped into deficit after several months of surplus; overall export volumes have fallen for the past 11 months (5). In response to such negative performance, the Bank of Japan may expand its already huge annual asset-buying plan, or possibly cut interest rates further into the negatives to encourage lending by charging banks for storing extra funds with the Bank (5).
Meanwhile, negotiations opened with the EU, which commenced in 2013, continue, aiming to conclude a free trade agreement by the end of 2016. The deal would lower tariffs and reduce non-tariff barriers to trade for key products for EU-Japan trade; the EU would eliminate protection against Japanese consumer goods like automobiles while Japan would drop protection on agriculture. However, domestic interests in Japan pressure negotiators to maintain tariffs on rice, wheat, beef and pork, dairy and sweetening products (6).
Although the EU has agreed to discuss these five farm products separately from the rest of the deal due to their sensitive nature for Japanese farmers, if the deal is successful in reducing protections on agricultural imports from the EU, Japan could see a further worsening of its terms of trade as more EU imports flood its domestic market. However, the opposite could also be true if the price of agricultural imports falls in the absence of tariffs while lowering protection against Japanese autos and other consumer goods stimulates European demand for these products. In this case, a free trade deal with the EU could help Japan raise export volumes.
(1) Workman, Daniel. “Japan’s Top 10 Imports.” World’s Top Exports, 24 September 2016. http://www.worldstopexports.com/japans-top-10-imports/.
(2) “Japan.” CIA World Factbook, 16 September 2016.
(3) Husna, Rida. “Japan Balance of Trade.” Trading Economics, 21 September 2016. http://www.tradingeconomics.com/japan/balance-of-trade.
(4) Kawai, Masahiro and Shinji Takagi. “Why Was Japan Hit so Hard by the Global Financial Crisis?” Asian Development Bank Institute, October 2009. https://www.adb.org/sites/default/files/publication/156008/adbi-wp153.pdf.
(5) “Japan logs surprise trade deficit in August: gov’t.” Yahoo News UK, 20 September 2016. https://uk.news.yahoo.com/japan-logs-surprise-trade-deficit-003755686.html.
(6) Jiji. “Japan, EU to discuss troublesome farm products separately in talks on economic partnership agreement.” Japan Times, 24 September 2016. http://www.japantimes.co.jp/news/2016/09/24/business/economy-business/japan-eu-discuss-troublesome-farm-products-separately-talks-economic-partnership-agreement/#.V-cW5JMrKqR.
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First established in 2005, the Department of Energy’s (DoE) Technology Commercialization Fund provides up to $20 million annually of R&D money for the development of “mature promising energy technologies with the potential for high impact” (1). Specifically, the fund aims to boost the number of energy technologies emerging from the DoE’s national labs destined for commercial development and strengthen the partnership between national labs and the energy industry.
Recently, the DoE has placed a large focus on the development of clean, alternative energy technologies and expediting their availability in the commercial marketplace. In June, the DoE announced a new, $16 million round of funding for 54 projects at 12 national labs, together with 58 private-sector partners that match the DoE’s investments (full list of projects available online at energy.gov) (2). According to Lynn Orr, the DoE’s Under Secretary for Science and Energy, “deploying new clean energy technologies is an essential part of our nation’s effort to lead in the 21st century economy and in the fight against climate change” (2). As such, the latest wave of funding can be seen not only in light of the development of environmentally conscious energy sources but also as an attempt to keep US companies on the forefront of R&D in the modern, globalized economy, maintaining the country’s status as the origin of forward-thinking innovation.
For instance, Ford alone received $6 million of the DoE funding, nearly half of the total resources available (3). The American automotive giant is expected to put the money toward the development of a cheaper, more efficient hydrogen fuel cell technology that can be implemented for widespread commercial distribution (3). By lowering costs, increasing purity and boosting durability of the cells, Ford is expected to invent a “uniquely American” process for producing hydrogen fuel cells (3).
Since setting a land speed record with its FCV prototype, the Fusion 999, nearly a decade ago, Ford has seemingly made little progress towards a commercially viable hydrogen-fueled vehicle, due to high costs, engineering hurdles, distribution issues and lack of infrastructure (3). However, the huge amount of funding the DoE has granted Ford demonstrates the US government’s confidence in and eagerness for this technology to gain mass traction.
However, the DoE is not limiting its investment to hydrogen technology but is also granting research funding to labs developing lesser known, but still promising, energy technology. For instance, researchers at Ames Laboratory in Iowa were awarded $325,000 for a project called “Manufacturing of Alnico (iron-aluminum-nickel-cobalt) Magnets for Energy Efficient Traction-Drive Motors” (4). Similarly to Ford, the project involves lowering costs and implementing engineering improvements to make non-rare earth magnet-driven motors (4). According to Associate Lab Director Debra Covey, the office at Ames Laboratory is “extremely pleased” at the chance to “further develop and deploy transformative research into products,” emphasizing the market-driven nature of the DoE initiative (4).
While a genuine concern for the environment certainly lies at the root of this initiative, just as important is the US’s ability to remain on the forefront of global efforts to fight climate change, positioning itself as a leader in this realm. Thus, in part, this can be seen as a subtle soft power campaign, demonstrating a national desire to develop the technologies that can fuel a sustainable future not just for the US, but also for the whole world. Not to mention, if the US is able to develop and commercialize green energy technologies more quickly than other countries, it can then export these technologies and thus further shift the balance away from importing energy from overseas to becoming a larger energy provider in the global economy.
(1) "Technology Commercialization Fund." Energy.gov. U.S. Department of Energy, n.d. Web. 15 Aug. 2016.
(2) "DOE Announces $16 Million for 54 Projects to Help Commercialize Promising Energy Technologies: Technology Commercialization Fund Will Support 12 National Labs and 58 Private Sector Partners." Energy.gov. U.S. Department of Energy, 21 June 2016. Web. 15 Aug. 2016.
(3) King, Justin. "Ford Gets $6M DoE Grant to Make Cheaper Hydrogen Fuel Cells." Leftlanenews.com. LeftLane News, 12 Aug. 2016. Web. 15 Aug. 2016.
(4) "Ames Laboratory Scientists Receive DOE Award to Help Commercialize Promising Technology." EurekAlert! DOE/Ames Laboratory, 25 July 2016. Web. 15 Aug. 2016.
Image: © Olivier Le Queinec | Dreamstime.com - <a href="https://www.dreamstime.com/stock-photos-renewable-energy-wind-power-windmill-turbines-image28311363#res14972580">Renewable Energy Wind Power Windmill Turbines</a>
In July, the US filed a trade dispute in the WTO against China – the 13th one under the Obama administration alone, all of which the US has won (1). The case in question concerns Chinese export taxes on nine raw materials; export taxes are illegal under WTO guidelines, but China has so far failed to remove these duties despite promising to do so upon joining (1). Currently, China levies taxes ranging from five to 20% on these raw materials (2).
Ironically given recent prevalent anti-free trade sentiment in the US election, it is in America’s interest that China exports more, not less, of these raw materials to the US. However, in forcing Chinese producers to pay to export these commodities overseas, an export tax has the effect of reducing the amount that the US can import and raising prices on imported raw materials. This is particularly damaging to US interests because the raw materials in question – antimony, cobalt, copper, graphite, lead, magnesia, talc, tantalum and tin – are essential inputs into key domestic industries like aerospace, automotive, electronics and chemicals (1).
In effect, the Chinese export tax raises costs for these American industries by raising the prices of materials. This then translates into higher prices of finished products, or forces companies to cut costs elsewhere. The tax is especially damaging to US industry because these raw materials cannot be produced domestically; China is the only major source for many of these minerals, meaning that US producers do not have the option of simply importing from another country. If this were the case, the export tax would be largely inconsequential for foreign countries and even counterproductive for China by reducing exports as foreign countries turn to other sources to obtain their mineral imports.
As it is, Chinese companies that use these raw materials as inputs have an unfair competitive advantage over foreign competitors, including those in the US. By making inputs more expensive for others, the Chinese can afford to sell at lower prices, making their products more competitive in any market. Under WTO guidelines, this constitutes an unfair business practice.
Another way in which this tax has the potential to undermine US economic interests is not as easily apparent; if hypothetically left unresolved, the export duties could potentially drive American jobs overseas. Because Chinese-based branches of international firms do not have to pay export taxes, companies which source raw materials from China could relocate to keep costs low and avoid paying duties. However, this would signify a shift of production – and therefore, jobs – to China from the US, exacerbating an already prevalent American fear.
However, this scenario is unlikely given that the US will likely win the WTO dispute. In past years, many such disputes have been filed and won by the US; the only real difference in this case lies in the specific raw materials in question (2). The EU has also filed a similar dispute over the same export taxes in question. In previous cases, the Chinese have agreed to remove export duties once the WTO reached a decision on the case, though the policies may take several years to fully enter into effect.
As such, the US trade dispute should be regarded more as a formality and a reminder for China to honor its international obligations rather than an indicator of any sort of US-China trade war. It is crucial not to exaggerate this case or use it to advance anti-globalization and anti-WTO rhetoric. In fact, this case highlights the necessity of the WTO in maintaining fair trade practices globally, and even more importantly, the benefits of free trade for the domestic economy. In helping eliminate the Chinese export tax, the WTO will not only lower costs for American businesses and make them more competitive at home and abroad; it will also help protect US manufacturing jobs. While this seems counterintuitive in a climate that tends to place domestic workers’ interest as clashing with the forces of globalization and free trade, in this case the reality turns out to be quite the opposite.
(1) "United States Challenges China's Export Duties on Nine Key Raw Materials to Level Playing Field for American Manufacturers." Ustr.gov. Office of the United State Trade Representative, July 2016. Web. 9 Aug. 2016.
(2) Brown, Chad P. "The U.S. Filed a WTO Dispute to save Jobs — by Increasing Imports from China. Here’s Why." Washingtonpost.com. The Washington Post, 26 July 2016. Web. 9 Aug. 2016.
Image: © Mike K. | Dreamstime.com - <a href="https://www.dreamstime.com/royalty-free-stock-photo-anti-wto-protests-hong-kong-image8153285#res14972580">Anti-WTO Protests in Hong Kong</a>
On May 22, Indian Prime Minister Narendra Modi signed a trade deal with Iran, an agreement in which New Delhi pledged to invest US$500 million into the strategically important Iranian port at Chabahar (1). In the works since 2003 but stalled due to bureaucratic delays, the project to develop Chabahar under Indian control finally gained momentum earlier this year with the lifting of Iranian sanctions (2).
Located near Iran’s border with Pakistan on the Gulf of Oman, Chabahar’s proximity to this busy shipping corridor makes it an especially valuable asset for trade in the region (3). Though the port has held great geopolitical and economic significance for explorers and rulers for centuries, it was only in 1974 that the Shah of Iran proposed a comprehensive development plan for the port: a US$600 million naval base that was to be constructed at Chabahar, mainly using American contractors (3). However, a lack of funds and the subsequent Islamic Revolution in 1979 put a temporary halt on these plans (3). After the revolution, Iranian national companies took over construction, but only a small part of the port was completed in the following years (3). The Iran-Iraq war beginning in 1980 brought a renewed strategic importance to the port; more vigorous construction resumed between 1982 and 1983 (3). However, the port remains underdeveloped, a symbol of Iran’s untapped potential for economic development.
Today, the investment and development deal represents a great opportunity for both Iran and India to expand their trade influence in the region. Since the US, UN and EU lifted most sanctions against Iran early this year in response to a positive report from the International Atomic Energy Agency in regard to Tehran’s nuclear program, Iran has been taking measures to establish itself as an outward-looking player in the region’s politics and trade, as well as the global economic regime (3). Developing Chabahar will allow Iran to compete for regional trade with Pakistan’s Gwadar Port only 72km away, in which China already invests heavily (2).
On the other hand, India stands to gain just as much if not more from this deal from an economic standpoint. The rapidly growing Indian economy relies on huge inputs of oil and natural gas, a need which Iran is “capable of fulfilling,” according to an Iranian newspaper reporting on the Chabahar deal (1). Partial ownership of Chabahar will help restore fossil fuel imports from Iran to their pre-sanctions levels; before the 2012 nuclear controversy, the Iran was India’s second-largest crude supplier (4). Beyond Iran itself, Chabahar will also facilitate trade with other suppliers of oil and natural gas in the Central Asia region, including Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan and Tajikistan (2). Currently, India accounts for less than 1% of these countries’ trade volume, largely due to supply-route difficulties; Chabahar is poised to dramatically increase this figure (2).
More specifically, access to a major seaport in Iran will allow India to strengthen ties with Afghanistan. As of now, the only overland trading route with Afghanistan lies through Pakistan, of which New Delhi is barred from taking full advantage due to political hostility from Pakistan (4). According to Tanvi Madan, head of the India Project at the Brookings Institute in Washington, “The Indians have tried for many years to get such transit access [to Afghanistan] through Pakistan, but they’ve come to the conclusion that it’s just not going to happen and that they need to move forward another way” (4). Chabahar port is India’s solution to this setback; the overseas route will eliminate the need for negotiations with Pakistan for overland trade, bypassing the country completely.
To further facilitate trade made available by the port, India signed additional agreements with Iran, including a US$16 billion pledge to invest in a free trade zone at Chabahar (5). As such, Central Asia will likely see a steady expansion of Indian presence in regional trade in coming years. Beyond trade in oil and gas, in exchange for natural resources, India can boost exports in aluminum, steel and petrochemicals to the region, improving its trade balance (4).
The Chabahar deal represents India’s aim to establish itself firmly as a major trading player in the region, resisting Chinese and, to some extent, Russian dominance. While in the past years sanctions limited many countries’ access to Iranian commerce, Russia and China strengthened their footholds on trade in the region; now that they are lifted, India is eager to open up the previously closed-off country while claiming a large stake of influence for itself (5). Moreover, according to senior associate at the Center of Strategic and International Studies Ariane Tabatabai, “Iran doesn’t want these two countries [China and Russia] to keep a quasi-monopoly on various sectors of its economy” (5).
In addition to its involvement in Iran, China’s investment in Pakistan’s Gwadar Port, despite risk from political instability, demonstrates the country’s commitment to dominating trade in Central Asia (6). Moreover, such willingness to take on risk in its investments speaks to the great future payoff that China predicts from expanding trade with Central Asia, an area of great potential for growth. The Chabahar trade deal shows India embracing this mentality, eager to cash in on trade with the region before it finds itself shut out by more quick-acting countries.
(1) BBC (2016). India and Iran sign ‘historic’ Chabahar port deal. Available at: http://www.bbc.com/news/world-asia-india-36356163 (Accessed: 26 July 2016).
(2) Nooruzzaman, S (2016). Chabahar Port: A game-changing deal. Available at: http://www.tehelka.com/2016/06/chabahar-port-a-game-changing-deal/ (Accessed: 27 July 2016).
(3) Ports and Maritime Organization (2016). Welcome to Chabahar Port. Available at: http://chabaharport.pmo.ir/en/introducing/history (Accessed: 27 July 2016).
(4) Taylor, G (2016). Iran-India port deal reveals tense Asian rivalries. Available at: http://www.washingtontimes.com/news/2016/may/29/india-iran-chabahar-port-deal-reveals-tense-asian-/ (Accessed: 27 July 2016).
(5) Balachandran, M (2016). India’s $500 million port deal with Iran is a masterstroke—and a tough balancing act. Available at: http://qz.com/690217/india-just-played-a-masterstroke-in-iran-to-reinforce-its-regional-soft-power-status-in-asia/ (Accessed: 27 July 2016).
(6) Jha, S (2016). India’s Grand Plans in Iran Go Way Beyond the Chabahar Port Deal. Available at: http://www.worldpoliticsreview.com/articles/19085/india-s-grand-plans-in-iran-go-way-beyond-the-chabahar-port-deal (Accessed: 27 July 2016).
Image: © TasFoto | Dreamstime.com - <a href="https://www.dreamstime.com/editorial-image-cargo-ship-iran-rotterdam-netherlands-container-ardebil-new-waterway-leaving-port-image54128995#res14972580">Cargo ship Iran in Rotterdam, Netherlands</a>
Recent years have seen an influx of Asian investment in African textile production as the industry gradually shifts locations in light of rising wages in Asian countries. Most notably, as China and India cultivate industries that require higher-skilled labor, transitioning to a more advanced rung on the ladder of economic development, African economies are beginning to fill demand for low-cost textile production, assisted by investment funds flowing in from Asia. African countries should strive to capitalize on this trend by taking measures to facilitate business and build up domestic manufacturing sectors integrated into global trade chains. By instituting beneficial laws and regulations, African countries can use the textile industry to advance their own development just like Asian countries such as China and India before them.
The “flying geese” economic model predicts that, as wages rise in regions like Asia, low-skilled manufacturing like textiles will relocate to less-developed areas such as Africa, where wages remain lower. In accordance with this model, in many cases today it is Asian manufacturers themselves that drive growth in the textile industries of southeast Africa through investment; in fact, most textile manufacturers operating in this region originally come from Asia (1).
As Asian countries establish an increased presence in the region, they shape both policy and the economic landscape. For instance, as Chinese and other Asian textile companies increasingly source their cotton from African countries like Zambia and Tanzania, the added demand shapes the market in a way that favors a decentralized industry free of government involvement (1). In addition, Asian companies introduce technology and innovations that boost productivity and increase inputs (1).
In fact, it is the gradual liberalization of trade and lowing of protective barriers that allows for the current increase in foreign investment in Africa. Much of this has come as a result of ongoing WTO efforts over the previous decades to convince African leaders to reduce tariffs, enticing more multinational corporations to enter into the domestic market (2). Today, however, further reform is necessary for African countries to fully capitalize on investment inflows. According to the World Bank’s ease of doing business rankings, most African countries still lag far behind other regions, clustered in the lower half of the 189 countries ranked (3). The mere presence of Asian investment and global demand cannot ensure that African economies will prosper by means of the textile trade; it ultimately falls upon the governments themselves to institute practices that will facilitate the integration of domestic textile industries into global trading chains. In today’s liberalized global business environment, there is no room for trade protectionism and isolationism as viable development strategies.
While the West is often inclined to take a skeptical view of the great rise of Chinese investment into Africa in recent years, labeling it as exploitative of the region’s resources and labor, this influx of funds has the power to help shape the region for the better. In 2014, China pledged to achieve a $400 billion trade volume with Africa by 2020 on top of $100 billion in direct investment (2). While much of this is centered on the textile industry, Chinese investment also often targets infrastructure projects that are key to paving the way for lasting development (2). Today, much of the region’s economic woes stem from a fundamental inability to successfully integrate into global trading chains; a lack of basic infrastructure like roads and ports severely stunts business efficiency and discourages multinational corporations from establishing their operations in the region. In this way, Chinese money is instrumental in transforming Africa into a business-friendly environment in which the textile industry, and the entire economy, can flourish.
(1) Xiaoyang, T (2014). The Impact of Asian Investment on Africa’s Textile Industries. Available at: http://carnegietsinghua.org/publications/?fa=56320 (Accessed: 10 July 2016).
(2) Kuo, S (2015). China’s Investment in Africa – The African Perspective. Available at: http://www.forbes.com/sites/riskmap/2015/07/08/chinas-investment-in-africa-the-african-perspective/#3048fb1716e2 (Accessed: 10 July 2016).
(3) World Bank Group (2015). Economy Rankings. Available at: http://www.doingbusiness.org/rankings (Accessed: 10 June 2016).
Image: © Paweł Opaska | Dreamstime.com - <a href="https://www.dreamstime.com/royalty-free-stock-image-thread-factory-workers-image24439606#res14972580">Thread factory workers</a>
In recent years, the China has been investing heavily in innovation. In an attempt to inspire entrepreneurship, the government currently has a US$337 billion startup investment fund set aside to inspire the growth of companies such as online giant Alibaba that can help shift China’s economy from basic manufacturing to more skilled, high-tech industries (1). An approximate US$100 billion is predicted to be specifically targeted at financial and technology (fintech) startups; this speaks to the great emphasis of China’s initiative on cultivating high-skilled industries at home (1).
The causes for this push are relatively straightforward and apparent. With its overall economic growth rate slowing in recent years, China aims to move up the ladder of development and definitively shed its former identity as an economy of cheap manufacturers. In this way, it hopes to inspire lasting economic growth. Broadly speaking, this means cultivating a socioeconomic culture emphasizing the traits that originally allowed Western countries to become the wealthiest in the world: science, property, competition and work ethic (2). More specifically, this translates into a government-backed push to create the type of innovation-driven society in which startups prosper and new inventions abound. Essentially, the government recognizes that the next stage of economic growth depends upon China’s successful transition from an “innovation sponge” – absorbing and appropriating existing technology from other parts of the world – to a global innovation leader (3). In this way, the Chinese economy can continue to flourish and its society advance to higher levels of prosperity.
By many measures, government investment has had success in inspiring innovation. As of 2015, China was home to four of the world’s top 10 Internet companies (ranked by number of visitors): Alibaba, Baidu, Tencent and Sohu (2). Furthermore, according to research by McKinsey, China has been particularly successful in encouraging innovation in certain types of companies: those that rely on customer-focused and efficiency-driven innovation (3). More specifically, these include industries like consumer electronics, construction equipment, household appliances and Internet services and software (3).
However, in the fields most crucial for China’s development, innovation has yet to reach desired levels. All four of the science-based industries that McKinsey experts examined are underperforming on a global scale, measured in terms of actual versus expected company revenue given China’s share of the global GDP (3). Even given the government’s huge push to raise R&D spending, train more specialists and file more patents, progress in this sphere remains slow.
Furthermore, recent Chinese efforts to jump-start entrepreneurship by building so-called innovation centers around the country are deeply flawed. Using slogans like “mass entrepreneurship” and “Internet plus,” this initiative aims to encourage geographically diverse people to start their own companies with a centralized push for local governments to build incubators to house these start-ups (4). Within the next five years, around 5,000 such centers will exist across China, though current occupancy rates for existing centers across the country stand at lower than 40% (4).
A variety of factors prevent this initiative from being as successful in driving innovation as policymakers hope. For one, many centers are located in remote cities and towns far from established innovation communities, which are concentrated in large cities like Beijing, Shanghai, Guangzhou, Zhuhai and Shenzhen (China’s top five startup cities) (4). This puts new centers – and potential entrepreneurs – physically out of reach of the markets, talent and start-up expertise that allow new businesses to flourish. In the words of the founder of Chinese VC firm Qiming Venture Capital, Gary Rieschel, “the idea that you can predict location or the idea that every geography happens to have this nascent group just waiting to be given capital to go create the next Alibaba is just not true” (4). Essentially, the government assumption that a successful startup can spring up anywhere if local talent is provided with the basic amenities necessary (in this case, lower startup costs) is flawed in failing to consider the critical but intangible social aspect of innovation.
As such, the proliferation of innovation centers across China represent a government investment that is unlikely to have the expected payoff, at least without the implementation of further measures. According to Shi Jiqiang, a partner at a firm managing a startup base in Tianjin, there simply “aren’t enough entrepreneurs” to fill existing and planned future centers (4). If construction continues as planned, China may even stand at significant risk of incurring debt and another bubble, comparable to the ghost towns, abandoned steel mills and theme parks that resulted from former such initiatives.
Part of the reason for the lack of entrepreneurs, beyond the geographical limitations of some centers, may lie more deeply in Chinese culture and society. According to the chief executive of a private co-working space in Beijing, Bo Yiqun, the education system tends to focus on memorization over creativity, which cramps students’ potential as innovators (4). Furthermore, there is significant cultural pressure for young people to find steady employment; starting one’s own business is discouraged as being too high-risk (4).
This is not to say that China is doomed to be lag behind in innovation; the main obstacle remains the centralized nature of the government’s initiative, not any inherent national traits. As we can see from examples like Silicon Valley, innovation and invention tend to flourish organically in environments that reward independent thinking and risk taking and where policy and regulation make it easy to turn an idea into a business. Today, this is not the description that one automatically associates with China, land of SOEs and strict bureaucracy. As such, one of the main steps the government can take is to foster such a climate while providing potential inventors and entrepreneurs with the resources – and perhaps more critically, the freedom – to drive development. The country is moving in this direction already; its success in doing so will have huge implications for the future of the Chinese economy and its ability to drive global innovation and sustained economic growth.
(1) Allison, I (2016). Chinese government’s startup investment fund is bigger than the GDP of Denmark. Available at: http://www.ibtimes.co.uk/chinese-governments-startup-investment-fund-bigger-gdp-denmark-1555093 (Accessed: 18 July 2016).
(2) Sheng, A and Xiao, G (2015). As China’s economy slows, innovation accelerates. Available at: http://www.marketwatch.com/story/as-chinas-economy-slows-innovation-accelerates-2015-06-16 (Accessed: 18 July 2016).
(3) Roth, E and Seong, J (2015). Gauging the strength of Chinese innovation. Available at: http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/gauging-the-strength-of-chinese-innovation (Accessed: 18 July 2016).
(4) Wong, S (2016). China’s innovation economy a real estate bubble in disguise? Available at: http://www.reuters.com/article/us-china-economy-innovation-insight-idUSKCN0ZM2KY (Accessed: 18 July 2016).
Image: © Waihs | Dreamstime.com - <a href="https://www.dreamstime.com/editorial-stock-photo-seventeenth-china-international-optoelectronic-expo-held-shenzhen-convention-exhibition-center-attracted-image58825138#res14972580">The seventeenth China International Optoelectronic Expo, held in Shenzhen Convention and Exhibition Center</a>
Katya is a third-year USC student, journalist and researcher currently at Sciences Po Paris for the semester. She covers a broad range of topics: sustainability, innovation, economic development and trade, and political and social trends. Her current research interests focus on gender in development, American politics and civil society in Eastern Europe. Her work and internship experience includes marketing at a LA-based startup, working as a legal intern, researching at a EU think tank in Brussels, and teaching English to French children in Paris. In addition to writing for GIT, she contributes to several publications, including IR journal Glimpse from the Globe and Mogul USC. For the past year, she has also served as Director of Project Management for USC’s only full-service, pro-bono, student-run digital marketing agency, Trojan Marketing Group.