The Root of China’s Decline

By Dr. John Glenn, Senior Lecturer in Politics and International Relations at the University of Southampton. You can read more posts by John here.


 

The New Year augured in a slew of negative economic data, both for China and the world economy in general. China’s growth rate in 2015 was the lowest in 25 years and capital outflows totalled around a trillion dollars placing further pressure on the yuan.[i] As pointed out in my latest book, although China has approximately $4 trillion worth of currency reserves, there is a limit to how much the government can intervene in the offshore yuan market and it is thus likely that further domestic devaluations of the currency will be forthcoming. This will have major ramifications for the world economy should the rest of the region follow suit and engage in competitive devaluations of their own currency. In addition, it has huge import for China’s global ambitions with regard to establishing the yuan as a major international reserve currency. Ironically, just when the IMF has included the yuan as part of the basket of currencies that states receive when borrowing from the IMF, countries are becoming increasingly wary of using the yuan because of the decline in its relative value.

Industrial overcapacity worldwide is driving the price of primary commodities and manufactured goods downwards as supply outstrips demand and leading to closures of factories in China and elsewhere. The international effects of overcapacity are being greatly exacerbated by the devaluations of the yuan and it is highly likely this will be one of the major issues that policy-makers will seek to address in the coming year. As highlighted in the book, the issue of state subsidies for China’s industries will also become one of the main issues on the global agenda in the next few years and it is likely that a concerted effort by the major powers will be made through the WTO to finally resolve this.

 

Pre-Tax Return on Capital in China

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Source: Esteban Maito, ‘China 1978-2011 – Rate of profit’[ii]

 

It is also highly likely that capital outflows will continue apace and may even quicken as the rate of return on investment and profits continues to fall to more normal levels (it has already declined by ten per cent from the heights of the nineties).[iii] Given that China, to some degree, still relies on technological innovation from foreign firms, this may have greater repercussions than would normally be expected.

It is notoriously difficult to predict events, none more so than at the international level. Certainly, China has been very active in the last few years in making its presence felt in the region and further afield. As this book has pointed out the creation of the Asian Infrastructure Investment Bank is not simply about providing an alternative to the World Bank. Major infrastructure projects elsewhere may help mitigate the problem of overcapacity domestically. The announcement of the ‘one belt, one road’ policy facilitating greater connections with Central Asia overland and across South Asia through to East Africa via maritime routes will not only enhance trade it will also provide major projects for China’s domestic firms. Yet, it is unlikely that this will stem further reductions in China’s growth. Whether this will lead to the ‘Japanification’ of its economy will depend upon the ability of the Chinese state to further intervene in the economy and the willingness of the other major economies to look the other way in the interests of stability. But one thing seems certain, its global ambitions and challenge to US supremacy will, for the time being at least, have to be scaled back. Moreover, if the deterioration in the economy continues, then such ambitions may have to be curtailed indefinitely.

 

John Glenn’s latest book, China’s Challenge to US Supremacy will be available shortly through Palgrave Macmillan.

 

[i] Larry Elliott, ‘Davos 2016: Global economic fears grow as stock markets dive – live’, The Guardian, 20 January 2016. Available here.

[ii] https://www.academia.edu/13939966/China_1978-2011_-_Rate_of_profit. The data is originally from Hongbin, Qu, Julia Wang & Sun Junwel, China inside out. Return on capital: perception vs reality, HSBC Global Research, Hong Kong, 2013.

[iii] Owen Freestone and Dougal Horton, ‘China’s High Rates of Investment and Path Towards Internal Rebalancing’, in Ligang Song, Ross Garnaut And Cai Fang (eds), Deepening Reform For China’s Long-Term Growth And Development, Canberra: Australia University Press, 2014, pp. 107-33

Migration Governance Across Regions

DipticBy Dr. Ana Margheritis, Reader in International Relations at University of Southampton (Twitter, Academia.edu). You can find more posts by Ana here.


 

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Migration policies are rarely effective. Examples of unintended and undesirable outcomes abound. In Latin America, very little is known about the impact and long-term sustainability of state policies towards emigrants. Following a world-wide trend, Ecuador, Uruguay, Mexico, Argentina, and Brazil have developed new institutions and discourses to strengthen links; assist, protect and enfranchise migrants, and capture their resources. As an adaptation of governmental techniques to global realities, these policies redefine the contours of polities, nations, and citizenship, giving place to a new form of transnational governance.

Building upon field research done in these five states and two receiving countries in the last decade, Ana Margheritis’s new book explains the timing, motivations, characteristics, and implications of emigration policies implemented by each country, as well as the emergence of a distinctive regional consensus around a post-neoliberal approach to national development and citizenship construction.

To visit the publisher’s website for this title, please follow this link.

There is also a flyer for the book with a 20% discount code available here.

 

Explainer: why everyone is giving Poland a hard time

By Dr. Kamil Zwolski, Lecturer in Global Politics and Policy at University of Southampton (Academia.edu). You can find more posts by Kamil here.


 

Since coming into power at the end of October 2015, Poland’s new, right-wing government has caused a stir at home and drawn international criticism.

Hardly a day passes at the moment without EU officials or European leaders questioning decisions made by the government.

In its analysis, Der Spiegel warns against Poland’s “creeping autocracy”. Some observers have even compared the situation in Poland to Putin’s Russia. While such comparisons are exaggerated, there are serious questions to ask about the Polish government’s commitment to the principles of liberal democracy.

Poland has been praised for years for its successful transition from communist state to liberal democracy. Now, it is the subject of criticism, worry and disappointment. What happened?

After eight years in power, the centre-right, pro-EU and relatively moderate Civic Platform government lost the 2015 presidential and parliamentary elections. In its place came the nationalistic, conservative and EU-sceptic Law and Justice (PiS) party, led by Jarosław Kaczyński, the twin brother of former president Lech Kaczyński, who died in a plane crash in 2010.

Changing the rules overnight

Things quickly changed after the election. Kaczyński appointed Beata Szydło as prime minister but it is clear that he pulls all the strings. For his part, president Andrzej Duda appears to be limited in his role to formally approving whatever the parliament (i.e. Kaczyński) throws his way.

Under the auspices of this peculiar administrative set up, the parliament has set about making drastic reforms at breakneck speed. Laws are changed overnight and without consultation. Critical voices are summarily ignored.

Szydlo and Kaczynski. One of them is Prime Minister, but no one can remember which.
Reuters/Kacper Pempel

So far, the parliament has significantly curtailed the powers of the national constitutional tribunal, which is supposed to impose judicial checks on the government. Another law seeks to curtail the freedom of the press by allowing the government to appoint the heads of media organisations.

Next on the list is foreign policy. The government is still in the process of developing plans on this front but it is already facing a predicament. On one side, the new government dislikes Russia, and on the other, it is increasingly fed up with the EU. The two positions are not particularly compatible.

The bear or the overbearing?

Poland has traditionally been sceptical of Russian foreign policy. While Western European countries, notably Germany, have been forging political and economic links with post-Soviet Russia, Poland has been working hard to join NATO, the EU, and to nurse the independence of the post-Soviet republics.

The wars in Georgia and Ukraine have proved to Poland’s elites that their concern was justified. Under Putin, Russia’s neighbours would have to watch their borders.

However, Poland is strongest as part of a team. It relies on its more powerful EU partners on the international stage and would struggle alone. When introducing the proposal for the EU’s Eastern Partnership programme, Poland worked together with Sweden. In the Ukrainian conflict, Poland accepted the leadership role of Germany.

It is unclear whether the new government appreciates this. On one hand, the anti-Russian sentiment seems to run deeper than ever. This government seems to be more emotional and less pragmatic about the relationship than its predecessors. This is fuelled by the widespread belief among PiS politicians and supporters that the 2010 crash that killed president Kaczyński was Russian sabotage, rather than a tragic accident.

On the other hand, Poland’s new government is deeply eurosceptic. It is particularly suspicious of Brussels and Berlin. The liberal EU arguably presents a threat to Catholic, conservative, Polish values.

There are longstanding tensions between Poland and Germany stemming from their difficult history but there is now resentment over Germany’s desire for Poland to remain a pro-EU, liberal democracy.

And grumbles about Brussels’ alleged interfering on issues such as gay rights have grown to alarm as the migration crisis has worsened. Pressure to take in refugees from Syria has not gone down well and Kaczyński is more often to be found siding up with Viktor Orbán, Hungary’s notoriously anti-immigrant prime minister, than Poland’s western EU partners.

While EU sanctions against Poland are unlikely, there are informal ways in which Brussels and EU leaders can seek to influence Poland. They might, for example, apply pressure to the EU funding channelled to Poland. And of course, they could remind Poland of its desire for European solidarity in support of Ukraine.

This is the dilemma for the Polish government. How can it be anti-Russian and anti-EU at the same time? Where will it seek allies? Kaczyński has always been fond of Orbán and the sympathy seems mutual, confirmed by their recent meeting.

But Orbán is famous for his pro-Putin policy. PIS is uncomfortable when confronted with this fact. Washington is only interested in supporting Poland as a pinnacle of liberal democracy in the region and a committed EU member. What are the options then? Either way, the current policy is bound to crash.

The Conversation

Kamil Zwolski, Lecturer in Global Politics and Policy, University of Southampton

This article was originally published on The Conversation. Read the original article.

The New Alcohol Guidelines: Paternalism or Just Good Advice?

By Ben Saunders, Associate Professor in Political Philosophy at University of Southampton (@DrBenSaunders, Academia.edu).


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The UK government recently announced new guidelines on the consumption of alcohol, recommending no more than 14 units per week (for both men and women), adding that there should be some drink-free days each week, and stressing that there are no ‘safe’ levels of alcohol consumption. The guidelines also recommend complete abstinence during pregnancy – an issue that I won’t touch on here, though colleagues in Southampton’s Philosophy department have been conducting important research on pregnancy, including the demands made on pregnant women, with implications for this.

While some health campaigners have welcomed this move, others have described this as another instance of ‘nanny state’ interference, or hyperbolic and puritan, with Nigel Farage hitting the headlines for advocating mass protest. Amongst political theorists, such objections are usually expressed in the (still unfortunately gendered) language of ‘paternalism’. The objection is that to interfere with someone’s conduct for their own good is to treat them as a child, rather than to respect their autonomy.

Traditionally, paternalism has been something of a ‘dirty word’, though recently some political theorists have endorsed state paternalism, using ‘nudges’ or even coercion to promote the good of citizens. These discussions raise important issues about the legitimate role of the state, which cannot be satisfactorily addressed here. However, even for anti-paternalists, it is not clear that the government’s guidelines are objectionable.

One classic anti-paternalist argument comes in John Stuart Mill’s 1859 On Liberty. In this work, Mill defends what has come to be known as the ‘harm principle’ or ‘liberty principle’, according to which the only legitimate reason for state or society to restrict individual freedom is in order to prevent harm to others.

Mill does not, however, forbid all interference, but only coercive interference. He thinks the state has no business prohibiting alcohol, powerfully attacking the temperance movement of his time. He adds that no one should be punished for conduct that does not harm others. As I’ve argued elsewhere (eprints), it seems that he would reject minimum pricing measures for much the same reason: though not intended as a punishment, like a fine, such measures make certain choices more costly (and, unlike taxation, cannot be justified on grounds of necessity).

But Mill does permit state or society to seek to persuade others to mend their ways. It’s perfectly legitimate, in Mill’s view, to encourage someone to drink less, provided that one does so through rational argument, rather than by threatening her with punishment. Such measures, though not coercive, might still be considered paternalistic, since they involve an attempt to alter another’s conduct for her own benefit. Nonetheless, if this is paternalistic, then Mill is not opposed to all paternalism, but only the coercive kind.

In light of such considerations, it seems that the government’s latest guidelines are legitimate state action, since they merely offer advice and are not backed by any sanctions. In fact, there is more to be said than this; it is not merely that such guidelines are compatible with autonomy, they may even be necessary for it.

As I argue, in a forthcoming article, the traditional interpretation of Mill’s principle as relying on a self-regarding/other-regarding distinction does not adequately capture Mill’s real concerns. The principle would be better formulated in terms of preventing non-consensual harm, which in principle permits some interference with ‘self-regarding’ conduct. For example, Mill asserts that it would be permissible to temporarily prevent someone from crossing an unsafe bridge, in order to warn him of the danger. If the person is unaware of the risk, then he cannot consent to bear it; but once apprised of the risk then it should be up to him whether or not he is willing to take the chance.

Before I can make an informed decision as to whether the pleasures of alcohol are worth the associated health risks, I need to be aware of what those risks are. Consider, for a moment, a contrary case, in which people are unaware of the dangers. Suppose, in fact, that the government were to cover up evidence of health risks, perhaps because beholden to the alcohol industry or reliant upon tax revenues. In such a scenario, those who choose to consume alcohol, without knowing the dangers it poses, cannot be said to have voluntarily accepted the consequent risks, so they would suffer those harms involuntarily or, at least, non-voluntarily.

Mill insists that each of us should have the final authority to decide how to balance benefits and (risks of) harm in our own lives, but we can only do this when we are aware of the risks associated with choices, such as alcohol consumption. Thus, it is not simply that public education does not prevent people from making their own choices, but it actually facilitates rational choice. It seems that even an anti-paternalistic liberal, like Mill, ought to welcome government guidelines that inform people of the dangers of alcohol consumption.

There is, however, one possible ground to object to the latest government guidelines, since they do not simply impart information, but also recommend a particular consumption limit (14 units per week), even while stressing that no amount is ‘safe’. This recommendation was apparently reached by considering an acceptable level of risk, in lights of the risks involved in other regular activities, such as driving. Few activities, if any, are risk free.

However, it should be up to each of us to decide how much risk we are willing to accept. A set of guidelines more in keeping with Mill’s liberal principles might compare the risks of particular levels of consumption with a variety of other activities. For example, they might list other activities that are similarly risky to consuming 7, 14, 21, or 28 units per week. This will enable us to make a better informed choice about the risks of heavier drinking than the new guidelines, which seek to make the risk trade-off for us.

PAIR Students’ Work for Consultation Institute recognised

DSC_0367cropped

At the university, we try whenever possible to create opportunities for our students to engage in real-world research, working with organisations in the public, private and voluntary section. Many of our students take up these opportunities during their second year research methods module. Recently two of our students Rory McGurk and William Pereira were invited to the Consultation Institute’s annual conference and presented with a certificate in appreciation for their work for the institute.

In Rory’s words:

We were asked by the Consultation Institute to conduct some research into some prominent public consultation cases, and suggest ways in which they could have been improved. We were given the case of the Kings Lynn Incinerator – a controversial plan for an incinerator which involved numerous overlapping consultations in Norfolk. These were our findings:

The Kings Lynn incinerator proposal consultation was legitimate in relation to the Aarhus convention, namely the right to participate in decision making. However, each of these consultations suffered systematic flaws, the most overarching of which was an attempt to manipulate public opinion. This was seen in the omission of certain questions from the Cory Wheelabrator telephone survey in 2011, and the county councils dismissal of a 92.68% residence opposition. It was therefore overtly plain to see that consultation in this instance was a participatory mechanism utilised only for the intention of legitimising a preconceived county-imposed waste management strategy that favoured an incinerator.

In recognition of the work we produced, the Consultation Institute invited us to their annual conference at the Emirates stadium. This proved to be a fascinating and extremely useful day, allowing us to listen to some high end speakers, such as Michael Portillo and Anthony King. We were also given the opportunity to network with individuals at the Consultation Institute and explain our research to them. We were also given an award for our contribution to the work produced by the Consultation Institute. Overall, the research was helpful in expanding our political knowledge and analytical skills, and the conference was a very interesting and helpful day. We would like to send our thanks to Rhion Jones and Elizabeth Gammell for allowing us to conduct the research and for allowing us to join them at their conference. Also, to Matt Ryan for setting up the research with the Consultation Institute and for joining us on our adventure down to their headquarters in Biggleswade.

Kamil Zwolski commenting on political situation in Poland for France 24

By Dr. Kamil Zwolski, Lecturer in Global Politics and Policy at University of Southampton (Academia.edu). You can find more posts by Kamil here.


 

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Kamil Zwolski, Lecturer in Global Politics and Policy at the University of Southampton, has commented on the political situation in Poland following 2015 presidential and parliamentary elections in this country for the Paris-based international news and current affairs television channel France 24.

You can watch Kamil’s contribution to the programme here.