BY SCOTT ROZELLE, HEATHER RAHIMI, HUAN WANG AND EVE DILL
COVID-19 lockdowns have major impacts on migrant workers and supply chains that depend on them. Scott Rozelle and his team find that the lockdowns in China were successful in protecting rural areas from COVID infections, but that the cost was severe: Poor rural households cut down on education, nutrition, and health expenditures and lost around $100 billion in migrant worker wages.—Johan Swinnen, series co-editor and IFPRI Director General.
The Stanford Center at Peking University (SCPKU), the Center on Democracy, Development and the Rule of Law (CDDRL), and the APARC China Program jointly hosted a workshop on China’s Belt and Road Initiative (BRI) in early March. The workshop, held on March 2 and 3, welcomed researchers from around the world with expertise in the Initiative. Unfortunately, because of the rapidly developing health emergency related to the coronavirus, participants from not only China, but also Japan, were prevented from attending. As described by Professor Jean Oi, founding director of SCPKU and the China Program, and Professor Francis Fukuyama, director of CDDRL and the Ford Dorsey Master's in International Policy, who co-chaired the workshop, the meeting aimed to provide a global perspective on the BRI, consolidate knowledge on this opaque topic, and determine the best method and resources for future research.
The workshop began with presentations from several of the invited guests. Dr. Atif Ansar from the University of Oxford’s Saïd Business School kicked off the first day by describing not only the tremendous opportunity that the BRI presents to developing economies, but also the serious pitfalls that often accompany colossal infrastructure projects. Pointing out the poor returns on investment of mega infrastructure projects, Ansar examined the frequest cost and schedule overruns, random disasters, and environmental degradation that outweigh the minimal benefits that they generally yield. China’s own track record from domestic infrastructure projects does little to mitigate fear of these risks, Ansar claimed. In response, he urged professional management of BRI investments, institutional reforms, and intensified deployment of technology in BRI projects. Dr. Ansar was followed by Dr. Xue Gong of the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore. Dr. Gong’s analysis centered on the extent to which China’s geopolitical motivations influenced its outward foreign direct investments (OFDI). Although her research was still in the early stages, her empirical analysis of China’s OFDI inflows into fifty BRI recipient countries from 2007-2018 nevertheless revealed that geopolitical factors often outweigh economic factors when it comes to China’s OFDI destinations.
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Participants then heard presentations from Amit Bhandari of Gateway House: Indian Council on Global Relations and Professor Cheng-Chwee Kuik of the National University of Malaysia. Mr. Bhandari’s talk focused on Chinese investments in India’s six neighboring countries, which tend to center more on energy rather than connectivity projects. He first found that the investments are generally not economical for the host countries because they come with high costs and high interest rates. Secondly, he argued that these projects often lacked a clear economic rationale, appearing instead to embed a geopolitical logic not always friendly to India. Professor Kuik, by contrast, provided a counterexample in his analysis of BRI projects in Southeast Asia. He described how, in Southeast Asia, host countries’ reception of the BRI has varied substantially; and how various stakeholders, including states, sub-states and other entities, have used their leverage to shape outcomes more or less favorable to themselves. Kuik’s analysis injected complexity into the often black-and-white characterizations of the BRI. He highlighted the multidimensional dynamics that play out among local and state-level players in pursuit of their goals, and in the process of BRI implementation.
Professor Curtis J. Milhaupt and Scholar-in-Residence Jeffrey Ball, both at Stanford Law School, followed with individual presentations on the role of State-Owned Enterprises (SOEs) in the BRI and the emissions impact of the BRI on climate change, respectively. Professor Milhaupt characterized Chinese SOEs as both geopolitical and commercial actors, simultaneously charged with implementing Party policies and attaining corporate profits. Chinese SOEs are major undertakers of significant overseas BRI projects, acting not only as builders but also as investors, partners, and operators. This situation, Milhaupt asserted, carries significant risks for SOEs because these megaprojects often provide dismal returns, have high default rates, and can trigger political backlash in their localities. Milhaupt highlighted the importance of gathering firm-level data on businesses actually engaged in BRI projects to better infer geostrategic, financial, or other motivations. Jeffrey Ball turned the discussion to carbon emissions from BRI projects and presented preliminary findings from his four-country case studies. He concluded that, on aggregate, the emissions impact of the BRI is still “more brown than green.” Twenty-eight percent of global carbon emissions may be accounted for by BRI projects, Ball asserted, underscoring the importance of the BRI to the future of global climate change.
The day concluded with presentations by Michael Bennon, Managing Director at the Stanford Global Projects Center, and Professor David M. Lampton, Oksenberg-Rohlen Fellow at the Freeman Spogli Institute for International Studies. Bennon first presented findings from two empirical case studies of BRI projects and then went on to describe how the BRI is now practically the “only game in town” for infrastructure funding for developing countries. Lengthy environmental review processes at Western multilateral banks have turned the World Bank, for example, from a lending bank into a “knowledge bank,” he argued. He also highlighted that, in general, economic returns on BRI projects for China are very poor, even though recipient countries may accrue macroeconomic benefits from these projects. Finally, Professor Lampton turned the discussion back to Southeast Asia, where China is currently undertaking massive cross-border high-speed rail projects through eight ASEAN countries. He described how each host country had varying capacity to negotiate against its giant neighbor, and how the sequential implementation of these cross-border rail projects also had varying impacts on the negotiating positions of these host countries. BRI played out differently in each country, in other words, eliciting different reactions, push-backs and negotiated terms.
The second day of the workshop was dedicated to working toward a collaborative approach to future BRI research. The group discussed the key gaps in the existing research, including how to know what China’s true intentions are, how to measure those intentions, who the main players and their interests in both China and the host countries are, and even what the BRI is, exactly. Some cautioned that high-profile projects may not be representative of the whole. Participants brainstormed about existing and future sources of data, and stressed the importance of diversifying studies and seeking empirical evidence.
Join us for a talk with agricultural and development economist Christopher B. Barrett, this quarter’s visiting scholar with the Center on Food Security and the Environment. Barrett is the Stephen B. and Janice G. Ashley Professor of Applied Economics and Management and an International Professor of Agriculture with Cornell’s Dyson School of Applied Economics and Management.
Professor Barrett will discuss food systems advances over the past 50 years that have promoted unprecedented reduction globally in poverty and hunger, averted considerable deforestation, and broadly improved lives, livelihoods and environments in much of the world. He’ll share perspectives on the reasons why, despite those advances, those systems increasingly fail large communities in environmental, health, and increasingly in economic terms and appear ill-suited to cope with inevitable further changes in climate, incomes, and population over the coming 50 years. Barrett will explore the new generation of innovations underway that must overcome a host of scientific and socioeconomic obstacles.
Also a Professor of Economics in the Department of Economics, Barrett is co-editor in chief of the journal Food Policy, is a faculty fellow with David R. Atkinson Center for a Sustainable Future and serves as the director of the Stimulating Agriculture and Rural Transformation (StART) Initiative housed at the Cornell International Institute for Food, Agriculture and Development.
Understanding the causes of economic inequality is critical for achieving equitable economic development. To investigate whether global warming has affected the recent evolution of inequality, we combine counterfactual historical temperature trajectories from a suite of global climate models with extensively replicated empirical evidence of the relationship between historical temperature fluctuations and economic growth. Together, these allow us to generate probabilistic country-level estimates of the influence of anthropogenic climate forcing on historical economic output. We find very high likelihood that anthropogenic climate forcing has increased economic inequality between countries. For example, per capita gross domestic product (GDP) has been reduced 17–31% at the poorest four deciles of the population-weighted country-level per capita GDP distribution, yielding a ratio between the top and bottom deciles that is 25% larger than in a world without global warming. As a result, although between-country inequality has decreased over the past half century, there is ∼90% likelihood that global warming has slowed that decrease. The primary driver is the parabolic relationship between temperature and economic growth, with warming increasing growth in cool countries and decreasing growth in warm countries. Although there is uncertainty in whether historical warming has benefited some temperate, rich countries, for most poor countries there is >90% likelihood that per capita GDP is lower today than if global warming had not occurred. Thus, our results show that, in addition to not sharing equally in the direct benefits of fossil fuel use, many poor countries have been significantly harmed by the warming arising from wealthy countries’ energy consumption.
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On April 16, Solomon Hsiang, the Chancellor's Associate Professor of Public Policy at the University of California, Berkeley, and the Center's Noosheen Hashemi Visiting Scholar, will lead a discussion on data for adaption to climate change, moderated by Marshall Burke. A reception will be held from 4:30 - 5:00 pm. The main event begins at 5:00 pm.
About the speaker:
Solomon Hsiang combines data with mathematical models to understand how society and the environment influence one another. In particular, he focuses on how policy can encourage economic development while managing the global climate. His research has been published in Nature, Science, and the Proceedings of the National Academy of Sciences.
Hsiang earned a BS in Earth, Atmospheric and Planetary Science and a BS in Urban Studies and Planning from the Massachusetts Institute of Technology, and he received a PhD in Sustainable Development from Columbia University. He was a Post-Doctoral Fellow in Applied Econometrics at the National Bureau of Economic Research (NBER) and a Post-Doctoral Fellow in Science, Technology and Environmental Policy at Princeton University. Hsiang is currently the Chancellor's Associate Professor of Public Policy at the University of California, Berkeley and a Research Associate at the NBER.
The goal of this paper is to describe and analyze the relationship between ability tracking and student social trust, in the context of low-income students in developing countries. Drawing on the results from a longitudinal study among 1,436 low-income students across 132 schools in rural China, we found a significant lack of interpersonal trust and confidence in public institutions among poor rural young adults. We also found that slow-tracked students have a significantly lower level of social trust, comprised of interpersonal trust and confidence in public institutions, relative to their fast-tracked peers. This disparity might further widen the gap between relatively privileged students who stay in school and less privileged students who drop out of school. These results suggest that making high school accessible to more students may improve social trust among rural low-income young adults.
“I learned long ago to never predict anything about North Korea.”
So began the keynote address by Anna Fifield, veteran journalist and winner of the 2018 Shorenstein Journalism Award. Speaking at the Award’s seventeenth annual panel discussion “How North Korea Is, and Isn’t, Changing under Kim Jong Un,” Fifield, the Beijing bureau chief for The Washington Post , shared some of the many observations she has made since she first began covering North Korea in 2004.
Two other North Korea experts joined Fifield at the panel: Barbara Demick, New York correspondent of the Los Angeles Times, formerly head of the bureaus in Beijing and Seoul, and the 2012 Shorenstein award winner; and Andray Abrahamian, the 2018-2019 Koret Fellow, whose previous role as executive director of Choson Exchange and other projects took him to the DPRK nearly 30 times. Yong Suk Lee, deputy director of the Korea Program at Shorenstein APARC, chaired the panel.
The presence of another person—the Dear Respected Comrade himself—was also very much felt in the room, if only in spirit.
Barbara Demick (center) speaks at 2018 Shorenstein Journalism Award.
Survival at any cost
At various points throughout its 70-year history, experts have predicted the demise of the "Hermit Kingdom." Fifield herself admitted to occasionally thinking along such terms.
And yet the country continues to prove them wrong.
“[D]uring my first stint covering North Korea, [I] just couldn’t envisage any way that this regime could survive the death of the second-generation leader and the transition to a third generation,” she said. “Kim Il Sung had created a myth of revolutionary heroism around himself, and a myth of divine selection around his son, Kim Jong Il. How could the North Korean people, who no longer live in a Hermit Kingdom, tolerate a third leader called Kim, let alone one who had no highly exaggerated or plain fictional back story?”
“Yet," Fifield continued, "here we are. Next month, Kim Jong Un will celebrate seven years in charge of North Korea.”
One prominent reason for the nation's recent survival, and an idea put forward by Fifield and supported by her co-panelists, was the development of markets in the communist state.
For decades, North Korea operated under the centrally-planned communist model. Even as China pursued reform and as the Soviet Union collapsed, the North Korean state maintained its central position in the economy.
However, following the famines of the 1990s, the state had no choice but to allow market activity to develop. Under the third Kim markets have continued to grow.
“There are now more than 400 established, state-sanctioned markets in North Korea,” said Fifield. “That’s more than double the number that existed when Kim Jong Un took over at the end of 2011.”
A side effect of this nascent market economy has been the emergence of new elites in the purported “classless” society. Fifield described the development of a capital within the capital—“Pyonghattan”—where newfound elites purchase clothes from western retailers and undergo plastic surgery for their eyelids.
Abrahamian concurred, noting that Kim Jong Un made sure to coddle this upper middle and upper class in Pyongyang. "The old way of doing that under Kim Jong Il and his father, Kim Il Sung, was very much through a loyalty and gift economy," Abrahamian said. "Money was not necessary in the old North Korea. Now it is. You do need it to get your daily necessities, and if you’re lucky enough, the products [from the “outside world”] help you to have a more pleasurable life through the market.”
At the other end of the spectrum, North Koreans turn to the markets not out of entrepreneurial zeal, but out of a need to survive. As an example, Fifield described meeting a mother and daughter living near the border with China. The mother took her daughter out of school in order to raise pigs and make tofu. Before dawn, they trekked into the mountains to tend crops of corn. It was a back-breaking existence. "If they were lucky, they made enough money each day to buy food for themselves," Fifield said. "Many days, they did all this to break even."
Andray Abrahamian responds to a question from the audience.
A smart tyrant not to be underestimated
The panel continued to focus on the man currently at the helm in North Korea.
“When I returned for my second go at covering the Koreas, I wanted to figure out how he’d done it," said Fifield. "How had this podgy young upstart with no qualifications other than being born into this family managed to take control of this regime…? How had he managed to keep intact this anachronistic system that should have died years, even decades, before?”
Fifield emphasized that her comments did not equate to admiration for Kim Jong Un. “He’s a tyrant,” she reminded the room. “But he’s a smart tyrant who’s been operating in a calculating way. To treat him as a joke or a madman is to underestimate the threat of him.”
“Kim Jong Un has not allowed these markets to flourish because he cares about the people and their wellbeing,” Fifield continued. “He has demonstrated time and time again that he doesn’t care at all about the people.”
“There’s only one thing he cares about and that is staying in power.”
Demick cautioned further against over-estimating the positive impact of market development on life in North Korea. “The people Anna interviewed for her groundbreaking series in 2017 in The Washington Post were disgusted with the system,” said Demick. “With the income inequality, with the corruption, with the controls.”
“For them, what’s the worst thing about North Korea? Simply being born there.”
The panelists participated in a lively audience Q & A.
A celebration of journalism
The Shorenstein Journalism Award, which carries a cash prize of $10,000, recognizes accomplished journalists committed to critical reporting on and exploring the complexities of Asia through their writing. It alternates between honoring recipients from the West, who mainly address American audiences, and recipients from Asia, who pave the way for freedom of the press in their countries. Established in 2002, the award honors the legacy of APARC benefactor Mr. Walter H. Shorenstein. A visionary businessman, philanthropist, and champion of Asian-American relations, Shorenstein was dedicated to promoting excellence in journalism and a deeper understanding of Asia.
While the reporting of each year's recipient focuses on different regions and areas of interest, the award consistently recognizes quality journalism. In his welcome remarks, panel chair Yong Suk Lee stated, “In the face of current attacks on journalists and on the truth in the United States and the world, [Shorenstein APARC is] even more committed to excellence in journalism, and to defending independent and free media."
Fifield’s co-panelists spoke at length about how deserving she was of the award. Before their first meeting in Seoul, Abrahamian confessed to harboring skepticism about Fifield. “I had read some of her work before and knew she had analytical chops, but thought to myself that journalists are always fighting for the next scoop.” However, after talking to Fifield for only a few minutes, Abrahamian readily dropped his guard. “I told myself, 'This is a special journalist; she's got something.’"
A previous recipient of the Shorenstein Journalism Award herself, Demick was equally enthusiastic in her praise of Fifield. “For the last four years, [Anna] had owned the North Korea story like no other journalist I’ve met, including myself.”
Fifield was presented with the Shorenstein award and prize at a private evening ceremony.
Watch Fifield’s keynote speech below. An audio version is availalbe on our SoundCloud channel.
A recently developed small area estimation technique is used to geographically derive detailed estimates of consumption-based poverty and inequality in rural Shaanxi, China. These estimates may be helpful for targeting since there is wide variability in poverty rates within Shaanxi but low levels of inequality within most counties and townships. We also investigate whether including environmental variables in the equation used to predict consumption and poverty improves upon typical approaches that only use household survey and census data. Ignoring environmental variables appears likely to produce targeting errors.
Using rural household panel data from three Chinese provinces, this paper identifies determinants of long-term poverty and tests the duration dependence on the probability to leave poverty. Special emphasis is given to the selection of the poverty line and inter-regional differences across provinces. Results suggest that the majority of population seems to be only temporary poor. However, the probability to leave poverty for those who were poor is differently affected by poverty duration across provinces ranging from no duration dependence in Zhejiang to highly significant duration dependence in Yunnan. The number of nonworking family members, education, and several village characteristics seem to be the most important covariates.
