The New Rules for Business Travel to China; Exclusive Insight: Chasing Geese: The Rise, Flight, and Fall of the Japanese Economy
China’s first passenger jet completes maiden commercial flight; Italy Still Mulling Whether to Pull Out of China Pact: Meloni; Italy PM says good ties with China possible without Belt and Road
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Exclusive Insight: Chasing Geese: The Rise, Flight, and Fall of the Japanese Economy
The prosperity and decline of the Japanese economy, to a large extent, can be attributed to the "Flying Geese Paradigm."
Post World War II, the Japanese economy bore witness to an astounding growth miracle. From 1951 to 1980, Japan's Gross Domestic Product (GDP) escalated by 73-fold, while over the same period, the United States' GDP only increased eightfold.
During this phase, Japan's growth model was significantly premised on the "Flying Geese Paradigm," a concept devised by Japanese economist Kanane Akamatsu. This approach involved the proactive imitation and acquisition of technology from the United States and Europe—the leading "wild geese" in the world economic growth. Initially, Japan assimilated the imported technologies and focused on indigenization of production, reducing its reliance on imported products. Subsequently, leveraging cost advantages, Japan lowered product costs, strived for quality enhancement, and began exporting its domestically produced goods back to the leading "wild geese," thereby engaging in competition with their manufacturers. This process, in turn, transformed Japan into a runner-up "wild goose" in the global economic growth.
The essence of the "Flying Geese Paradigm" lies in two aspects: (1) Adoption and imitation of the leading "wild goose's" technology rather than indigenous innovation; (2) Refinement and improvement of the leading "wild goose's" technology to elevate product quality. A classic illustration of this strategy is the production of Japanese automobiles. They reduced fuel consumption and refined interior craftsmanship based on American and European automobile technology, and managed to lower production costs and subsequently, the selling price. However, there was hardly any innovation in the automobile technology itself.
The rise and fall of the Japanese economy are largely due to the "Flying Geese Paradigm". In the early stages of economic growth, diligently imitating the technology of the leading "wild goose" and becoming a following "wild goose" was undoubtedly the right move. However, as Japan's economy developed, and its economic scale drew increasingly closer to the leading "wild goose" (Japan became the world's second-largest economy after the United States in 1978, a position it held for 32 years until it was surpassed by China in 2010), the scope for imitation and technology transfer from the leading "wild goose" diminished. Additionally, without relying on domestic innovation to promote technological advancement, the pace of economic growth was inevitably going to gradually decelerate and eventually stagnate. This is the fundamental reason for Japan's economic downturn and is a core issue currently confronting the Chinese economy.
(This article is part of a series entitled "Reasons for Japan's 30-year Economic Downturn". The author, Xin Jisi, is a guest economist for The China Brief".)
The New Rules for Business Travel to China
WSJ
The Wall Street Journal has consulted security experts, business advisers, and travel-seasoned executives to provide advice on navigating business trips to China amidst heightened tensions. The new rules and risks for foreign executives traveling to China include Beijing's anti-espionage law, raids on consulting firms working with foreign companies, and a tighter control over information flow. Some companies are putting off staff travel to China, and visitors should carefully consider the type of work they will be doing there, as any work that may be viewed as supporting a hostile agenda should probably be performed outside of China. The visa application process has become more detailed and intrusive, and international flights to China remain limited and expensive. Regarding digital security, it is advisable to assume that authorities can view anything on your phone or laptop, so using burner devices, encrypted communications apps, and VPNs is recommended. Business travelers may face more extensive questioning at the border, including questions about travel plans, employment history, and sensitive political issues. It is best to answer factual questions truthfully and be cautious about expressing opinions on political topics. Communications in China should be treated as potentially insecure, and caution should be exercised in what messages are sent back home. While there are risks, some business visitors have reported straightforward experiences in China, but caution is still advised. Practical considerations include the need to search for cash or credit card-accepting merchants, the dominance of WeChat for payments, and fewer English menus in restaurants due to the effects of the pandemic and expat departures.
China’s first passenger jet completes maiden commercial flight
Financial Times
China’s first home-grown passenger plane has taken to the air, a decade after its development began. The C919 conducted its inaugural commercial flight from Shanghai to Beijing. The project has been hailed as a step towards Chinese technological independence and poses a challenge to the hegemony established by Airbus and Boeing in the aviation industry. The C919, which has received more than 1,000 orders from 32 customers, including China Eastern, has not yet received regulatory approval in Europe or the US. However, Shanghai-based Comac, which was responsible for the plane’s development, hopes to begin chipping away at the market shares of those rivals.
Italy Still Mulling Whether to Pull Out of China Pact: Meloni
Bloomberg
Italian Prime Minister Giorgia Meloni has not yet made a final decision on Italy's participation in China's Belt and Road program, despite earlier indications that the country intended to withdraw. Meloni stated that it is still too early to determine the outcome of their evaluation, which is a sensitive issue that affects multiple interests. Italy signed onto the Belt and Road Initiative in 2019 and has until December 22 to decide whether to exit or renew the pact for five years. The program has funded $900 billion in infrastructure projects globally and is a modern effort to resurrect historic trade routes connecting China with Europe, the Middle East and Africa.
Italy PM says good ties with China possible without Belt and Road
Reuters
Italian Prime Minister Giorgia Meloni has said that good relations with China remain possible, even without being part of the country's Belt and Road Initiative (BRI) deal. Italy is currently the only major Western country signed up to the infrastructure spending scheme to connect China with Asia, Europe and beyond. Meloni stated that Italy was not the European or Western nation with the strongest economic and trade ties with China, so it was still possible to maintain good relations with the country without being part of the wider BRI project. Earlier this month, a senior government official said Italy was unlikely to renew its Belt and Road programme after 2024.
US review of China tariffs won't depend on trade 'breakthrough'-Deputy USTR
Reuters
US trade agency the USTR is taking an "analytical" view of the tariff review and will not base any outcomes from the "breakthrough" of US-China trade relations, the agency's deputy, Sarah Bianchi, told Reuters. The Biden administration is continuing discussions with the Asian superpower without the assumption of a breakthrough. Bianchi said USTR was taking industry and stakeholder attitudes into account and would determine which tariff categories are strategically sound by consulting with other departments, including the Treasury and Commerce. Former US President Donald Trump imposed tariffs in 2018 and 2019 on thousands of Chinese imports in the wake of technological IP misappropriation.
Europe’s green transition impossible without China, says Dutch minister
Financial Times
Liesje Schreinemacher, the Dutch trade minister, has said that Europe’s green transition will not be possible without China. While the US is distancing itself from the Asian economy, the EU is looking to dependency reduction more cautiously as the bloc is more reliant on Asia and is already suffering from the group boycott of energy and raw materials from Russia. Schreinemacher also stressed the importance for the EU to think carefully before screening European investment in China's advanced technologies.
Thailand says 1 million Chinese tourists visited from January to mid-May
Reuters
One million Chinese tourists visited Thailand between January and May 18, thanks to China's border reopening. The Thai government aims to reach a target of five million Chinese visitors this year, contributing to the planned spending of 446 billion baht ($13.18 billion). The Southeast Asian country welcomed 9.47 million foreign tourist arrivals from January to mid-May, compared to the 11.15 million visitors in the whole of 2020. The Thai economy grew faster than expected in Q1, fuelled by an uplift in the hard-hit tourism sector.
COVID is coming back in China, lockdowns are not
The Sydney Morning Herald
China has reported rising COVID-19 cases since April, mainly due to new subvariants. China’s broader population seems to have adjusted to living with a background hum of COVID infections, making China accountable for COVID-19 as a “class B” illness. Health officials have thus recommended wearing masks on buses and subways but ask passengers to do so voluntarily. Dr Zhang Wenhong, director of the center for infectious diseases at Huashan Hospital in China, has recommended that the country increase vaccination rates and allow the introduction of internationally developed vaccines for better protection and treatment of COVID-19 patients.
South Korea to avoid US-China rivalry, will not capitalise on chip maker ban
South China Morning Post
South Korea will not take advantage of a Chinese ban on US tech firm Micron Technology, said an anonymous source, amid concerns the move from Beijing was designed to disrupt US ties with Seoul. The Chinese ban on Micron - imposed on national security grounds - could provide an opportunity for South Korean semiconductor firms Samsung and SK Hynix to move into the Chinese market, as the latter company is heavily reliant on US equipment and expertise. Both Korean firms could be penalised by China for a failure to replace Micron, something Korea is reportedly keen to avoid. South Korea previously angered China by agreeing to host the US-made Terminal High Altitude Area Defense missile defence system.
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