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Lisa Griswold
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As a new U.S. administration assumes office next year, it will face numerous policy challenges in the Asia-Pacific, a region that accounts for nearly 60 percent of the world’s population and two-thirds of global output.

Despite tremendous gains over the past two decades, the Asia-Pacific region is now grappling with varied effects of globalization, chief among them, inequities of growth, migration and development and their implications for societies as some Asian economies slow alongside the United States and security challenges remain at the fore.

Seven scholars from Stanford’s Shorenstein Asia-Pacific Research Center (APARC) offered views on policy challenges in Asia and some possible directions for U.S.-Asia relations during the next administration.

View the scholars' commentary by scrolling down the page or click on the individual links below to jump to a certain topic.

U.S.-China relations

U.S.-Japan relations

North Korea

Southeast Asia and the South China Sea

Global governance

Population aging .

Trade


U.S.-China relations

By Thomas Fingar

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Managing the United States’ relationship with China must be at the top of the new administration’s foreign policy agenda because the relationship is consequential for the region, the world and American interests. Successful management of bilateral issues and perceptions is increasingly difficult and increasingly important.

Alarmist predictions about China’s rise and America’s decline mischaracterize and overstate tensions in the relationship. There is little likelihood that the next U.S. administration will depart from the “hedged engagement” policies pursued by the last eight U.S. administrations. America’s domestic problems cannot be solved by blaming China or any other country. Indeed, they can best be addressed through policies that have contributed to peace, stability and prosperity.

Strains in U.S.-China relations require attention, not radical shifts in policy. China is not an enemy and the United States does not wish to make it one. Nor will or should the next administration resist changes to the status quo if change can better the rules-based international order that has served both countries well. Washington’s objective will be to improve the liberal international system, not to contain or constrain China’s role in that system.

The United States and China have too much at stake to allow relations to become dangerously adversarial, although that is unlikely to happen. But this is not a reason to be sanguine. In the years ahead, managing the relationship will be difficult because key pillars of the relationship are changing. For decades, the strongest source of support for stability in U.S.-China relations has been the U.S. business community, but Chinese actions have alienated this key group and it is now more likely to press for changes than for stability. A second change is occurring in China. As growth slows, Chinese citizens are pressing their government to make additional reforms and respond to perceived challenges to China’s sovereignty.

The next U.S. administration is more likely to continue and adapt current policies toward China and Asia more broadly than to pursue a significantly different approach. Those hoping for or fearing radical changes in U.S. policy will be disappointed..

Thomas Fingar is a Shorenstein Distinguished Fellow and former chairman of the U.S. National Intelligence Council. He leads a research project on China and the World that explores China’s relations with other countries.


U.S.-Japan relations

By Daniel Sneider

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U.S.-Japan relations have enjoyed a remarkable period of strengthened ties in the last few years. The passage of new Japanese security legislation has opened the door to closer defense cooperation, including beyond Japan’s borders. The Japan-Korea comfort women agreement, negotiated with American backing, has led to growing levels of tripartite cooperation between the U.S. and its two principal Northeast Asian allies. And the negotiation of a bilateral agreement within the Trans-Pacific Partnership (TPP) talks brought trade and investment policy into close alignment. The U.S. election, however, brings some clouds to this otherwise sunny horizon.

Three consecutive terms held by the same party would certainly preserve the momentum behind the ‘pivot to Asia’ strategy of the last few years, especially on the security front. Still there are some dangers ahead. If Japan moves ahead to make a peace treaty with Russia, resolving the territorial issue and opening a flow of Japanese investment into Russia, that could be a source of tension. The new administration may also want to mend fences early with China, seeking cooperation on North Korea and avoiding tensions in Southeast Asia.

The big challenge, however, will be guiding the TPP through Congress. While there is a strong sentiment within policy circles in favor of rescuing the deal, perhaps through some kind of adjustment of the agreement, insiders believe that is highly unlikely. The Sanders-Warren wing of the Democratic party has been greatly strengthened by this election and they will be looking for any sign of retreat on TPP. Mrs. Clinton has an ambitious agenda of domestic policy initiatives – from college tuition and the minimum wage to immigration reform – on which she will need their support. One idea now circulating quietly in policy circles is to ‘save’ the TPP, especially its strategic importance, by separating off a bilateral Japan-U.S. Free Trade Agreement. Tokyo is said to be opposed to this but Washington may put pressure on for this option, leaving the door open to a full TPP down the road. .

Daniel Sneider is the associate director for research and a former foreign correspondent. He is the co-author of Divergent Memories: Opinion Leaders and the Asia-Pacific Wars (Stanford University Press, 2016) and is currently writing about U.S.-Japan security issues.


North Korea

By Kathleen Stephens

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North Korea under Kim Jong Un has accelerated its campaign to establish itself as a nuclear weapons state. Two nuclear tests and multiple missile firings have occurred in 2016. More tests, or other provocations, may well be attempted before or shortly after the new American president is inaugurated next January. The risk of conflict, whether through miscalculation or misunderstanding, is serious. The outgoing and incoming administrations must coordinate closely on policy and messaging about North Korea with each other and with Asian allies and partners.

From an American foreign policy perspective, North Korea policy challenges will be inherited by the next president as “unfinished business,” unresolved despite a range of approaches spanning previous Republican and Democratic administrations. The first months in a new U.S. president’s term may create a small window to explore potential new openings. The new president should demonstrate at the outset that North Korea is high on the new administration’s priority list, with early, substantive exchanges with allies and key partners like China to affirm U.S. commitment to defense of its allies, a denuclearized Korean Peninsula and the vision agreed to at the Six-Party Talks in the September 2005 Joint Statement of Principles. Early messaging to Pyongyang is also key – clearly communicating the consequences of further testing or provocations, but at the same time signaling the readiness of the new administration to explore new diplomatic approaches. The appointment of a senior envoy, close to the president, could underscore the administration’s seriousness as well as help manage the difficult policy and political process in Washington itself.

2017 is a presidential election year in South Korea, and looks poised to be a particularly difficult one. This will influence Pyongyang’s calculus, as will the still-unknown impact of continued international sanctions. The challenges posed by North Korea have grown greater with time, but there are few new, untried options acceptable to any new administration in Washington. Nonetheless, the new administration must explore what is possible diplomatically and take further steps to defend and deter as necessary. .

Kathleen Stephens is the William J. Perry Distinguished Fellow and former U.S. ambassador to the Republic of Korea. She is currently writing and researching on U.S. diplomacy in Korea.


Southeast Asia and the South China Sea

By Donald K. Emmerson

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The South China Sea is presently a flashpoint, prospectively a turning point, and actually the chief challenge to American policy in Southeast Asia. The risk of China-U.S. escalation makes it a flashpoint. Future historians may call it a turning point if—a big if—China’s campaign for primacy in it and over it succeeds and heralds (a) an eventual incorporation of some portion of Southeast Asia into a Chinese sphere of influence, and (b) a corresponding marginalization of American power in the region.

A new U.S. administration will be inaugurated in January 2017. Unless it wishes to adapt to such outcomes, it should:

(1) renew its predecessor’s refusal to endorse any claim to sovereignty over all, most, or some of the South China Sea and/or its land features made by any of the six contending parties—Brunei, China, Malaysia, the Philippines, Taiwan, Vietnam—pending the validation of such a claim under international law.

(2) strongly encourage all countries, including the contenders, to endorse and implement the authoritative interpretation of the U.N. Convention on the Law of the Sea (UNCLOS) issued on July 12, 2016, by an UNCLOS-authorized court. Washington should also emphasize that it, too, will abide by the judgment, and will strive to ensure American ratification of UNCLOS.

(3) maintain its commitment to engage in publicly acknowledged freedom of navigation operations (FONOPs) in the South China Sea on a regular basis. Previous such FONOPs were conducted in October 2015 by the USS Lassen, in January 2016 by the USS Wilbur, in May 2016 by the USS Lawrence, and in October 2016 by the USS Decatur. The increasingly lengthy intervals between these trips, despite a defense official’s promise to conduct them twice every quarter, has encouraged doubts about precisely the commitment to freedom of navigation that they were meant to convey.

(4) announce what has hitherto been largely implicit: The FONOPs are not being done merely to brandish American naval prowess. Their purpose is to affirm a core geopolitical position, namely, that no single country, not the United States, nor China, nor anyone else, should exercise exclusive or exclusionary control over the South China Sea.

(5) brainstorm with Asian-Pacific and European counterparts a range of innovative ways of multilateralizing the South China Sea as a shared heritage of, and a resource for, its claimants and users alike. .

Donald K. Emmerson is a senior fellow emeritus and director of the Southeast Asia Program. He is currently editing a Stanford University Press book that examines China’s relations with Southeast Asia.


Global governance

By Phillip Y. Lipscy

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The basic features of the international order established by the United States after the end of World War II have proven remarkably resilient for over 70 years. The United States has played a pivotal role in East Asia, supporting the region’s rise by underpinning geopolitical stability, an open world economy and international institutions that facilitate cooperative relations. Absent U.S. involvement, it is highly unlikely that the vibrant, largely peaceful region we observe today would exist. However, the rise of Asia also poses perhaps the greatest challenge for the U.S.-supported global order since its creation.

Global economic activity is increasingly shifting toward Asia – most forecasts suggest the region will account for about half of the global economy by the midpoint of the 21st century. This shift is creating important incongruities within the global architecture of international organizations, such as the United Nations, International Monetary Fund and World Bank, which are a central element of the U.S.-based international order and remain heavily tilted toward the West in their formal structures, headquarter locations and personnel compositions. This status quo is a constant source of frustration for policymakers in the region, who seek greater voice consummate with their newfound international status. 

The next U.S. administration should prioritize reinvigoration of the global architecture.  One practical step is to move major international organizations toward multiple headquarter arrangements, which are now common in the private sector – this will mitigate the challenges of recruiting talented individuals willing to spend their careers in distant headquarters in the West. The United States should join the Asian Infrastructure Investment Bank, created by China, to tie the institution more closely into the existing architecture, contribute to its success and send a signal that Asian contributions to international governance are welcome. The Asian rebalance should be continued and deepened, with an emphasis on institution-building that reassures our Asian counterparts that the United States will remain a Pacific power. .

Philip Y. Lipscy is an assistant professor of political science and the Thomas Rohlen Center Fellow. He is the author of the forthcoming book Renegotiating the World Order: Institutional Change in International Relations (Cambridge University Press, 2017).


Population aging

By Karen Eggleston

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Among the most pressing policy challenges in Asia, U.S. policymakers should bear in mind the longer-term demographic challenges underlying Asia’s economic and geopolitical resurgence. East Asia and parts of Southeast Asia face the headwinds of population aging. Japan has the largest elderly population in the world and South Korea’s aging rate is even more rapid. By contrast, South Asian countries are aging more gradually and face the challenge of productively employing a growing working-age population and capturing their “demographic dividend” (from declining fertility outweighing declining mortality). Navigating these trends will require significant investment in the human capital of every child, focused on health, education and equal opportunity.

China’s recent announcement of a universal two-child policy restored an important dimension of choice, but it will not fundamentally change the trajectory of a shrinking working-age population and burgeoning share of elderly. China’s population aged 60 and older is projected to grow from nearly 15 percent today to 33 percent in 2050, at which time China’s population aged 80 and older will be larger than the current population of France. This triumph of longevity in China and other Asian countries, left unaddressed, will strain the fiscal integrity of public and private pension systems, while urbanization, technological change and income inequality interact with population aging by threatening the sustainability and perceived fairness of conventional financing for many social programs.

Investment in human capital and innovation in social and economic institutions will be central to addressing the demographic realities ahead. The next administration needs to support those investments as well as help to strengthen public health systems and primary care to control chronic disease and prepare for the next infectious disease pandemic, many of which historically have risen in Asia. .

Karen Eggleston is a senior fellow and director of the Asia Health Policy Program. She is the editor of the recently published book Policy Challenges from Demographic Change in China and India (Brookings Institution Press/Shorenstein APARC, 2016).


Trade

By Yong Suk Lee

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Portrait of Yong Suk Lee.
Trade policy with Asia will be one of the main challenges of the new administration. U.S. exports to Asia is greater than that to Europe or North America, and overall, U.S. trade with Asia is growing at a faster rate than with any other region in the world. In this regard, the new administration’s approach to the Trans-Pacific Partnership will have important consequences to the U.S. economy.

Anti-globalization sentiment has ballooned in the past two years, particularly in regions affected by the import competition from and outsourcing to Asia. However, some firms and workers have benefited from increasing trade openness. The U.S.-Korea Free Trade Agreement of 2012, for example, led to substantial growth in exports in the agricultural, automotive and pharmaceutical sectors. Yet, there are winners and losers from trade agreements. Using an economist’s hypothetical perspective, one would assume firms and workers in the losing industry move to the exporting sector and take advantage of the gains from trade. In reality, adjustment across industries and regions from such movements are slow. Put simply, a furniture worker in North Carolina who lost a job due to import competition cannot easily assume a new job in the booming high-tech industry in California. They would require high-income mobility and a different skill set.

Trade policy needs to focus on facilitating the transition of workers to different industries and better train students to prepare for potential mobility in the future. Trade policy will also be vital in determining how international commerce is shaped. As cross-border e-commerce increases, it will be in the interest of the United States to participate in and lead negotiations that determine future trade rules. The Trans-Pacific Partnership should not simply be abandoned. The next administration should educate both policymakers and the public about the effects of trade openness and the economic and strategic importance of trade agreements for the U.S. economy.

Yong Suk Lee is the SK Center Fellow and deputy director of Korea Program. He leads a research project focused on Korean education, entrepreneurship and economic development.

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Purpose

The purpose of this paper is to evaluate the effect of adult children migration on the health status of elderlyparents. Increased labor migration in developing countries that lack adequate social security systems and institutionalized care for the elderly is a phenomenon that is important to understand. When their adultchildren go away to work, it is not clear what effect there will be on “left-behind” elderly parents.

Design/methodology/approach

This study employs nearly nationally representative data from five provinces, 25 counties, 101 villages and 2,000 households, collected from two waves of data in 2007 and 2011. This sample comprises a subset of households which include both elderly individuals (above 60 years old) and their grown (working-aged)children in order to estimate the impact of adult child migration on the health of elderly parents in ruralChina.

Findings

This study finds that adult child migration has a significant positive impact on the health of elderly family members.

Practical implications

These findings are consistent with the explanation that migration raises family resources, which in turn may contribute to better health outcomes for elderly household members.

Originality/value

This is the first paper to attempt to identify the relationship between household migration and the health of elderly parents within the Chinese context.

 

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Fang Chang
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Purpose: The need for a universal rural pension system has been heightened by demographic changes in rural China, including the rapid aging of the nation’s rural population and a dramatic decline in fertility. In response to these changes, China’s Government introduced the New Rural Social Pension Program (NRSPP) in 2009, a voluntary and highly subsidized pension scheme. The purpose of this paper is to assess the participation of rural farmers in the NRSPP. Furthermore, the authors examine whether the NRSPP affects the labor supply of the elderly population in China.

Design/methodology/approach

This paper uses household-level data from a sample of 2,020 households originating from a survey conducted by the authors in five provinces, 25 counties, and 101 villages in rural China. Using a probit model and conducting correlation analysis, the authors demonstrate the factors affecting the participation and the impact of NRSPP on labor supply of the rural elderly.

Findings

The results show there are several factors that are correlated with participation, such as specific policy variant in force in the respective household's province, the size of the pension payout from government, the age of sample individuals, and the value of household durable assets. Specifically, different characteristics of NRSPP policy implementation increase participation in China’s social pension program. The results suggest that the introduction of the NRSPP has not affected the labor supply of the rural elderly, in general, although it has reduced participation for the elderly who were in poor health.

Originality/value

Several previous studies have covered the NRSPP. However, all previous studies were based on case studies or just focused on a small region, and for this reason the results cannot reflect the populations and heterogeneity of rural areas. Therefore, a data set with a large sample size is used in this paper to provide anew perspective to fully understand the participation of NRSPP and its impacts on rural households. This paper will make an update contribution to the literature in the area of pension programs in China.

 

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China Agricultural Economic Review
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Scott Rozelle
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Gi-Wook Shin
Rennie J. Moon
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Japan and South Korea face serious demographic crises. Japan has the oldest population in the world and South Korea is one of the most rapidly aging. Together they top the list in terms of proportion of elderly by 2050, with 40.1% and 35.9% respectively being 65 and over, according to a U.S. Census Bureau forecast. Both nations are seeing shrinking working-age populations, with their birthrates among the lowest in the world. This puts them at great risk as they struggle to find new engines of economic growth.

Some experts argue that Japan and South Korea should encourage immigration. The former head of Tokyo's Immigration Bureau, Hidenori Sakanaka, said that "we need an immigration revolution to bring in 10 million people in the next 50 years, otherwise the Japanese economy will collapse." Jongryn Mo, a professor at Yonsei University in Seoul has written a book, "Strong Immigration Nation," urging a similar policy for South Korea.

Is migration the answer?

Japan and South Korea are already supplementing their shrinking workforce with foreign labor, mostly unskilled migrant workers from China and Southeast Asia doing jobs that locals shun.

But it is time to attract more skilled workers. In Japan, only 18.4% of foreign workers were technicians or professionals in 2015, while the figure in Korea is just 7.8% this year. Skilled foreign workers can fill many jobs from staffing hospitals to working as technicians in middle-tier companies and software engineers in large ones.

The challenge, however, is that both countries remain exclusionary, closed societies despite a substantial rise in the numbers of foreigners. Politicians fear losing votes from workers worried about foreigners taking their jobs.

According to a recent report by the French business school INSEAD, Japan and South Korea are ranked 53rd and 61st, respectively in their level of tolerance for immigrants. Most foreign skilled workers have little intention to settle down in Japan or South Korea on a permanent basis, although unskilled ones might be more willing to stay.

Maria, a Guatemalan professional, decided to leave South Korea after working for six years in the overseas marketing department of a large Korean corporation. "Some Koreans complain that foreigners leave after a few years, but we leave because we're never included in the first place. Korean companies pay a lot to bring foreigners here. And then they don't even ask these people about their opinion."

Srey, a Cambodian student studying in Japan, said, "The Japanese are very helpful and very friendly, but at the same time they look at me as a 'gaijin' no matter how good I am at Japanese or able to speak to them. I am not planning to work in Japan."

Bridging strategy

South Korea and Japan need to find a more creative strategy in utilizing foreign talent. In particular, they should pay close attention to their transnational networks rather than pushing for permanent migration. Not only should both countries focus on the knowledge and skills of foreign labor talent, but also the social networks they can possess.

This calls for a particular type of social capital: transnational bridging. A person who has social ties in more than one place can serve as a bridge between those different places. Such bridging can be performed within a city or a country or across borders, but the latter is becoming more important with globalization. By bridging distant networks, people can connect disparate cultures, build trust and facilitate cross-national cooperation that are essential in business transactions. Many Indian and Chinese entrepreneurs and engineers working in Silicon Valley are active in transnational bridging with their home country.

Transnational bridging can be a good new strategy for South Korea and Japan in attracting foreign skilled labor since they can offer valuable experiences and networks as advanced economies, if not permanent places to live. They can help foreign talent to build social ties while studying and working and encourage them to serve as a bridge between South Korea and Japan and their next destination once they leave in what could be called "brain linkage."

They can still contribute to South Korea or Japan even after they depart. Maria said she was willing to do business involving both South Korea and her home country. Srey is also eager to do business with Japan after graduating, even though he will not work in the country.

South Korea and Japan should adopt a policy of "Study-Work-Bridge" rather than the "Study-Work-Migration" pathway commonly encouraged by settler societies. This new policy framework would establish programs providing systematic networking opportunities for skilled foreigners while in Japan or South Korea. It would upgrade the quality of campus life for foreign students and work environments for foreign professionals so they leave with positive experiences.

Most importantly, it would provide institutional support to help maintain transnational networks between foreigners and South Koreans and Japanese.

In Japan, a Study-Work framework has already begun to take shape. Among foreign students seeking employment in Japan in 2013, approximately 24% found jobs. According to the country's ministry of justice, 10,696 of 11,698 foreign students are successful in applying for a change of visa status after graduating from college. This is very encouraging. Still, foreign students feel that Japanese companies are reluctant to embrace their full potential and largely expect them to assimilate, often leading them to stay in Japan only for a short time.

In South Korea, with a shorter history of foreign student intake, a Study-Work framework has yet to emerge. While 64.3% of South Korean companies say they need and want to hire foreign students, only a very small portion of foreign students work in South Korean companies after graduation, perhaps as low as 1%. South Korea's immigration laws for foreign students have eased slightly in recent years, but there is an urgent need to develop solid, institutionalized support for responding to the substantial demand by foreign students who wish to find employment after their studies.

Challenges ahead

Both countries are moving in the right direction, but until they are ready to embrace a more comprehensive migration policy down the road, they should develop the "bridging" component of a Study-Work-Bridge framework as an interim strategy. That means considering how foreign skilled labor can contribute to their economies even if they stay only temporarily.

This non-migration-bridging concept can be also appealing to foreign workers who like to move on after gaining valuable experiences and networks. By activating the social networks they have left behind, foreigners can later become powerful "transnational bridges." With economic globalization, such linkages will be all the more important.

Research shows that science and engineering majors may have more to contribute as human capital, but business and social science majors are more inclined to play a bridging role. Universities and corporations should establish diversity offices, as seen in the U.S. and elsewhere, to promote a culture of tolerance and non-discrimination.

The challenges associated with aging, depopulation and a shrinking workforce are expected to intensify in the coming years. Yet foreign talent is readily at hand for both countries. They need to look no further than the skilled foreigners who already have connections with South Korea or Japan either through schooling or employment and to continue to cultivate such connections through a Study-Work-Bridge approach.


Gi-Wook Shin is director of the Walter H. Shorenstein Asia-Pacific Research Center at Stanford University and co-author of Global Talent: Skilled Labor as Social Capital in Korea. Rennie J. Moon is an associate professor at the Underwood International College at Yonsei University in Seoul.

This article was originally carried by Nikkei Asian Review on Aug. 31 and reposted with permission.

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South Korea is facing a number of challenges. Not unlike other advanced economies in Asia, the country is confronted with a declining working-age population, reduction in birth rates, and risk of long-term stagnation.

A team of Stanford researchers at Stanford’s Shorenstein Asia-Pacific Research Center (APARC), in collaboration with other scholars from around the world, is increasingly thinking about those challenges and is working on a number of research initiatives that explore potential solutions in leveraging benefits from globalization.

The researchers propose that Korea can extract value from two major movements of people – outflows of its own population (diaspora) and inflows of foreigners (immigrants and visitors), all of whom hold the capacity to build social capital – a network of people who have established trust and in turn spread ideas and resources across borders.

Engaging diaspora

Emigration is traditionally viewed as a loss of human capital – ‘brain drain’ – movement of skills out of one country and into another, but Stanford professor Gi-Wook Shin and Koret Fellow Joon Nak Choi support an alternative view of outward flows of citizens.

Shin and Choi suggest that people who leave their countries of origin but never return can still provide value to their home country through ‘brain linkage,’ which advocates that there is economic opportunity in cross-national connections despite a lack of physical presence. This concept is a focus of their research which was recently published in the book Global Talent: Skilled Labor and Mobility in Korea.

“What we’re trying to do is to extend the thinking – to not just look at potential losses of having your people go abroad but also the potential gains,” Choi said. “Previous studies have found that if you have more of these relationships or ‘brain linkages,’ you have more trade and more flow of innovations between countries.”

People who stay in a host country become participants in the local economy and often conduct influential activities such as starting companies, providing advice and sitting on boards of directors, Choi said, and these transactions enact flows of resources from home country to host country and vice versa.

Choi, who outside of his fellowship is an assistant professor at Hong Kong University of Science and Technology, said that this way of thinking pulls away from a zero-sum view of the world and instead sees it as “more globalized, cosmopolitan and diffuse.”

He leads a research project with Shin focused on global talent and cultural movement in East Asia, and over the past quarter, taught a graduate seminar on the Korean development model.

“Cross-national ties are harder to establish than those that are geographically close, but they provide invaluable means of sharing information and brokering cooperation that may otherwise be impossible on other levels,” said Shin, who is also the director of Shorenstein APARC. “In many ways, social ties can be a good strategy to gain a competitive edge. This is an area we endeavor to better understand through our research efforts on Korea.”

Shin has described his own identity of being a part of the very system they are studying. He grew up in Korea, arrived in the United States as a graduate student and has since stayed for three decades and frequently engages the academic and policy communities in Korea.

One cross-national initiative that he recently started is a collaborative study between scholars at Shorenstein APARC and Kyung Hee University in Seoul. The two-year study evaluates the social capital impact of a master’s degree program at the Korean university that trains select government officials from developing countries.


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An international cohort including many researchers from Stanford’s Shorenstein Asia-Pacific Research Center have been conducting group interviews with international students at Korean and Japanese universities to better understand their motivations to stay or go following their completion of a degree or non-degree program at Korean universities. Their initial results reveal that gaps in cross-cultural understanding and opportunities cause feelings of disassociation, but recent internationalization efforts are helping to address those gaps and support innovation, knowledge sharing and local economic growth. An op-ed on the topic authored by Stanford professor Gi-Wook Shin and Yonsei University associate professor Rennie Moon can be viewed here. Credit: Flickr/SUNY – Korea/crop and brightness applied


Harnessing foreign skilled labor

Globalization has also led to migration of people to regions that lack an adequate supply of skilled workers in their labor force. This new infusion of people is an opportunity to bridge the gap, according to the researchers.

“In order to be successful, countries need a large talented labor pool to invest in,” said Yong Suk Lee, the SK Center Fellow in the Freeman Spogli Institute for International Studies and affiliate of the Korea Program. “Innovation is not something like a technology ladder which has a more obvious and strategic trajectory, it’s more about investing in people and taking risks on their ideas.”

Korea currently has a shortage of ‘global talent’ – individuals who hold skills valuable in the international marketplace. Yet, Korea is well positioned to reduce the shortage.

The country produces a vast amount of skilled college graduates. Nearly 70 percent of Koreans between the age of 25 and 34 have the equivalent of a bachelor’s degree. Korea has the highest percentage of young adults with a tertiary education among Organisation for Economic Co-operation and Development (OECD) countries. Another study found that the foreign student population in Korea has risen by 13 percent in the past five years.

Universities are moving to “internationalize” in seeking to both recruit faculty and students from abroad and to retain them as skilled workers in the domestic labor force. A new book published by Shorenstein APARC Internationalizing Higher Education in Korea: Challenges and Opportunities in Comparative Perspective assesses efforts by institutions in Korea, China, Japan, Singapore and the United States through nine separately authored chapters.

 

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Shin and Yonsei University associate professor Rennie Moon, who served as book editors and chapter authors, found that Korea has on average more outbound students (students who leave Korea to study elsewhere) than inbound students (international students who come to Korea to study). The figure above compares five countries and finds that Korea and China are more outbound-driven while Singapore, Japan and the United States are more inbound-driven.

“For most national and private universities in Korea, internationalization is more inbound-oriented—attracting foreign students, especially from China and Southeast Asia,” said Yeon-Cheon Oh, president of Ulsan University and former Koret Fellow at Shorenstein APARC who co-edited Internationalizing Higher Education in Korea. “In many ways, it’s about filling up students numbers. There needs to be a balance in inbound and outbound student numbers in order for internationalization to have an optimal effect.”

International students that do come to Korea are on average not staying long after graduation, though. The researchers identify reasons being difficulty in adapting to the local culture, inability to attain dual citizenship, language barriers, and low wages in comparison to that of native Koreans; in short – it is not easy to assimilate fully.

These and other barriers facing foreigners in Korea are a focus of a broader research project led by Shin and Moon that aims to propose functional steps for policymakers striving to internationalize their countries and to shift the discourse on diversity.

Developing a narrative

The Korean government has expanded efforts to recruit foreign students to study at Korean universities – many of which now rank in the top 200 worldwide – but addressing education promotion is only one area.

“The challenge is to propose a pathway that rallies around a general narrative,” Lee said, citing a need for internationalization to be coordinated across immigration policy, labor standards, and social safety nets.

An international group of experts in Korean affairs gathered at Stanford earlier this year at the Koret Workshop to address the challenge of creating a cohesive narrative, focused on Korea as the case study. The Koret Foundation of San Francisco funds the workshop and fellowship in its mission to support scholarly solutions to community problems and to create societal and policy change in the Bay Area and beyond.


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The Koret Workshop brings together an international panel of experts on Korean affairs at Stanford. From 2015-2016, the workshops focused on higher education, globalization and innovation in Korea. Above, Michelle Hsieh (far right) speaks during a question and answer session following her presentation on Korean and Taiwanese small and medium enterprises, next to her is former U.S. Ambassador to the Republic of Korea Kathleen Stephens, Stanford consulting professor Richard Dasher, former U.S. foreign affairs official David Straub, and Korea University professor Myeong Hyeon Cho.


The interdisciplinary nature of the workshop was an important aspect, according to Lee, and Michelle Hsieh, one of 27 participants of the conference that covered a range of areas from entrepreneurship to export promotion policies in Korea.

“The workshop demonstrated how internationalization of higher education – and academic research in general – can be achieved by constructing cross-cutting ties,” said Hsieh, who was a postdoctoral fellow at Shorenstein APARC from 2006-07 and is now an associate research fellow at Academia Sinica in Taiwan.

“Participating in the workshop made me realize I really miss the lively and rigorous discussions at Shorenstein APARC, where researchers are interdisciplinary with diverse backgrounds yet focused on a common research interest,” Hsieh said. “I think debate and discussion in that kind of setting can illuminate a completely different take.”

The workshop will result in a book that features multiple areas and policy directions for Korea’s development. The lessons included are also envisioned to apply to other emerging countries facing similar trends of demographic change and economic slowdown. Shorenstein APARC expects to publish the book next year.

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South Korea has relied on its export-oriented development model to become an economic powerhouse, but has now reached the limits of this model. Indeed, Korea’s phenomenal growth has incubated the seeds of its own destruction. Learning from the Korean developmental experience, China has adopted key elements of the Korean development model and has become a potent competitor in electronics and the heavy industries. Meanwhile, the organizational and institutional legacies of late industrialization have constrained Korean efforts to move into technology entrepreneurship and the service sector. These strategic challenges are compounded by a demographic bomb, as social development has led to collapsing birthrates in Korea, much like other developed countries in Europe and Asia. Within the next few years, the Korean workforce will start diminishing in size and aging rapidly, straining the country’s resources and curtailing its growth. In this seminar, Joon Nak Choi, 2015-16 Koret Fellow at Stanford's Shorenstein Asia-Pacific Reserach Center, will discuss innovations in business strategy, educational policy and social structure that are directly relevant to these problems, and that would alleviate or perhaps even reverse Korea’s economic malaise.

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A Stanford graduate and sociologist by training, Choi is an assistant professor of management at the School of Business and Management, Hong Kong University of Science and Technology. His research and teaching areas include economic development, social networks, organizational theory, and global and transnational sociology, within the Korean context. He coauthored Global Talent: Skilled Labor as Social Capital in Korea (Stanford University Press, 2015).

This public event is made possible through the generous support of the Koret Foundation.

Shorenstein APARC
Encina Hall
Stanford University
Stanford, CA 94305-6055

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Joon Nak Choi is the 2015-2016 Koret Fellow in the Korea Program at Stanford University's Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC). A sociologist by training, Choi is an assistant professor at Hong Kong University of Science and Technology. His research and teaching areas include economic development, social networks, organizational theory, and global and transnational sociology, within the Korean context.

Choi, a Stanford graduate, has worked jointly with professor Gi-Wook Shin to analyze the transnational bridges linking Asia and the United States. The research project explores how economic development links to foreign skilled workers and diaspora communities.

Most recently, Choi coauthored Global Talent: Skilled Labor as Social Capital in Korea with Shin, who is also the director of the Korea Program. From 2010-11, Choi developed the manuscript while he was a William Perry postdoctoral fellow at Shorenstein APARC.

During his fellowship, Choi will study the challenges of diversity in South Korea and teach a class for Stanford students. Choi’s research will buttress efforts to understand the shifting social and economic patterns in Korea, a now democratic nation seeking to join the ranks of the world’s most advanced countries.
 
Supported by the Koret Foundation, the Koret Fellowship brings leading professionals to Stanford to conduct research on contemporary Korean affairs with the broad aim of strengthening ties between the United States and Korea. The fellowship has expanded its focus to include social, cultural and educational issues in Korea, and aims to identify young promising scholars working on these areas.

 

2015-2016 Koret Fellow
Visiting Scholar
<i>2015-16 Koret Fellow, Shorenstein APARC, Stanford University</i>
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More than fifty experts met in Xi’an, China, for an international academic conference on demographic change and social development last week. Several scholars from the Freeman Spogli Institute for International Studies (FSI) spoke at the conference, including Karen Eggleston, Marcus Feldman, Jean Oi and Scott Rozelle.

The conference marked the 120th anniversary of Xi’an Jiaotong University’s founding and more than three decades of collaboration with Stanford scholars. Researchers at Xi’an Jiaotong University’s Institute for Population and Development Studies collaborate on policy-relevant research and educational activities with Stanford faculty at FSI as well as the Morrison Institute and Woods Institute.

For more information on FSI’s work in the areas of global health and medicine, please visit this page and the Asia Health Policy Program website.

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As the keynote for Shorenstein APARC's 8th annual Koret Workshop, Se Young Ahn, one of South Korea's leading public intellectuals, will analyze the Korean experience of utilizing global talent and immigration in the context of an extremely rapidly aging society.

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Ahn is the chairman of the National Research Council for Economics, Humanities and Social Sciences in South Korea. He oversees 23 national think tanks including Korea Institute for Industrial Economics and Trade, Korea Development Institute, Science and Technology Policy Institute, Korea Institute for International Economic Policy, Korea Labor Institute, and Korea Institute for Health and Social Affairs. He also chairs the National Advisory Committee for Trade Negotiation, and is a professor at the Graduate School of International Studies at Sogang University. Ahn's research areas include trade policy and economic integration in the Asia-Pacific region as well as the China-Korea Free Trade Agreement and Japan-Korea Free Trade Agreement. A graduate of Seoul National University, Chairman Ahn received a doctoral degree from the Pantheon-Sorbonne (Paris I) University in France.

The Koret Workshop is made possible through the generous support of the Koret Foundation.

Se Young Ahn <i>Chairman, National Research Council for Economics, Humanities and Social Sciences</i>, Korea
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Abstract:

One of the key objectives of introducing a compulsory health insurance is to provide citizens, regardless of socioeconomic status, with financial risk protection against unexpected catastrophic expenditures in the face of illness.  South Korea and Taiwan achieved universal health coverage (UHC) through mandatory social insurance schemes in 1989 and 1995, respectively.  Despite both countries' efforts to achieve the goal of financial risk protection for more than two decades, past research has demonstrated that household out-of-pocket (OOP) payment still accounts for more than one-third of total health expenditures in both countries.  When OOP payment represents a significant share of financial sources for health care, one should be particularly concerned about the distribution of such payments, in particular, catastrophic health expenditures, across households of differing economic levels.  This talk sets out to examine the change in the incidence and distribution of catastrophic health expenditures before and after the introduction of the National Health Insurance programs in South Korea and Taiwan.

 

Given similarity in the health and National Health Insurance (NHI) system characteristics observed in South Korea and Taiwan, substantial variation in the distribution of catastrophic payment among households was noted. The rich are more likely to incur catastrophic payment in South Korea, but the opposite trend is noted in Taiwan.  Further assessment on the impact of universal health coverage (UHC) on reducing catastrophic headcount (defined as the proportion of households incurring catastrophic health payment) is observed in Taiwan, but not in South Korea.  We found that when South Korea introduced the NHI program with a limited benefit package and high copayment, it produced little effect (if not none) in reducing financial burden in terms of proportion of catastrophic headcount. On the contrary, the impact of universal health coverage on catastrophic headcount ranged from -1.82% to -4.08% for Taiwan, due to the provision of a rather comprehensive benefit package with modest copayment. While UHC is a well-lauded policy goal and may be a magic word for many countries striving for the achievement, it is definitely not a panacea to resolve the incidence of catastrophic payment and potential medical impoverishment.  To provide sufficient financial protection against unexpected medical expenses, the design of the benefit coverage and risk sharing mechanism is key to the success of effectively achieving UHC. 

 

Bio

Jui-fen Rachel Lu, Sc.D., is the Fulbright Visiting Scholar at Center for East Asian Studies, Stanford University, and a Professor at Chang Gung University (CGU) in Taiwan, where she teaches comparative health systems, health economics, and health care financing and has served as department chair (2000-2004), Associate Dean (2009-2010) and Dean of College of Management (2010-2013).  She earned her B.S. from National Taiwan University, and her M.S. and Sc.D. from Harvard University, and she was also a Takemi Fellow at Harvard (2004-2005).  Prof. Lu is currently the President of Taiwan Society of Health Economics (TaiSHE) and an Honorary Professor at Hong Kong University (2007-2017).  Dr. Lu was also the recipient of IBM Faculty Award in 2009.   

 

Her research focuses on 1) the equity issues of the health care system; 2) impact of the NHI program on health care market and household consumption patterns; 3) comparative health systems in Asia-Pacific region.  She is a long-time and active member of Equitap (Equity in Asia-Pacific Health Systems) research network and was the coordinator for the catastrophic payment component of Equitap II research project which involved 21 country teams and was jointly funded by IDRC, AusAID, and ADB.  Professor Lu has also been appointed to serve as a member on various government committees dealing with health care issues in Taiwan.  

Okimoto Conference Room, Encina Hall 3rd Floor, East Wing

Rachel Jui-fen Lu Visiting Scholar, Center for East Asian Studies Stanford University
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