RESEARCH: Economics and Trade REPORTS

Taiwan's Economy amid Political Transition
Leading up to the 2016 election, Taiwan’s electorate has grown largely dissatisfied with the state of the domestic economy and increasingly worried about Taiwan’s growing dependence on China. Amid stagnant growth and wages, the Democratic Progressive Party (DPP) has focused its campaign on improving Taiwan’s domestic economy through expanded social welfare benefits, a higher minimum wage, and new local sources of innovation. Meanwhile, the economic platform of the Chinese Nationalist Party (Kuomintang, or KMT) has largely been defined by promoting Taiwan’s external economic relations, especially with China, as a means of supporting export-led growth. This report provides an objective review of major economic indicators in Taiwan, and evaluates the implications of political transition for Taiwan’s economic relations with China, the United States, and the international community.
01/06/2016
China’s Development Finance: Outbound, Inbound, and Future Trends in Financial Statecraft
Despite China’s rapidly growing overseas engagement and recent multilateral initiatives, the country still receives development finance from a variety of governments and institutions. From a development perspective, China thus challenges convention and, like other middle-income countries, straddles the divide between a developing nation requiring external assistance and an emerging power assuming global leadership roles. This report examines China’s concurrent positions as a recipient and a provider of development finance, evaluating the objectives driving global finance flows, and assessing the impact of these flows on U.S. economic and diplomatic interests.
12/16/2015
December 2015 Trade Bulletin
Highlights of this Month’s Edition • Bilateral trade: October U.S. goods trade deficit with China at $33 billion, the smallest deficit in seven months. • Bilateral policy issues: RMB added to the SDR basket; a U.S.-China agreement on joint inspections of accounting firms falls through, placing U.S. regulators in violation of their mandate. • Policy trends in China’s economy: Chinese e-commerce soars as Singles’ Day eclipses Black Friday and Cyber Monday in online sales. • Sector spotlight – Traditional Chinese medicine: Internationalization and modernization key for increasing quality and regulatory acceptance and boosting exports to Western market.
12/04/2015
November 2015 Trade Bulletin
Highlights of this Month’s Edition • Bilateral trade: In September, the U.S. deficit in goods trade with China hit $36.3 billion, the highest monthly deficit on record; quarterly service imports from China reach highest level on record, weakening the U.S. trade in services surplus. • Policy trends in China’s economy: Fifth Plenum sets course for the 13th Five-Year Plan; President Xi’s state visit to the UK nets expanded international role for the RMB. • Quarterly review of China’s economy: China’s GDP grew 6.9 percent in third quarter; government moves to support the economy. • Sector spotlight – Aluminum: Chinese subsidies and preferential policies have created overcapacity that has lowered global prices and eroded the profitability of the U.S. aluminum sector.
11/04/2015
Directed by Hollywood, Edited by China: How China’s Censorship and Influence Affect Films Worldwide
China’s strict regulation of entertainment imports, including foreign films, violates the country’s World Trade Organization (WTO) commitments, as determined in a 2007 WTO decision calling for China to open its film market to foreign films. After years of noncompliance and inaction, China partially opened its film market in 2012 following a deal with the United States. The deal allowed for the import of 34 films each year—up from the previous limit of 20 films—in exchange for a temporary suspension of further U.S. WTO actions against China’s film importation policies. During Chinese President Xi Jinping’s September 2015 visit to the United States, the Motion Picture Association of America and China Film Group reached two new film agreements, which could increase market access for foreign films in China. Based on recent history, however, promises that China will further open its film market should be viewed skeptically. Chinese box office sales have increased alongside China’s standard of living, resulting in China surpassing Japan as the world’s second largest film market (behind the United States) in 2012. If global film market growth rates remain consistent over the next few years, many experts expect China to surpass the United States as the largest film market in the world as early as 2018. Hollywood relies on China’s film market for revenue, but the process to get films into China is arduous due to strict and opaque regulation of film imports. China’s regulations and processes for approving foreign films reflect the Chinese Communist Party’s position that art, including film, is a method of social control. As a result of these regulations, Hollywood filmmakers are required to cut out any scenes, dialogue, and themes that may be perceived as a slight to the Chinese government. With an eye toward distribution in China, American filmmakers increasingly edit films in anticipation of Chinese censors’ many potential sensitivities.
10/28/2015
October 2015 Trade Bulletin
Highlights of this month's edition: • Bilateral trade: U.S. goods deficit in August hits $34.9 billion, the highest monthly deficit this year. • Xi Jinping’s state visit to the United States: Presidents Obama and Xi announce cooperation in several areas, including agreement that neither government will support cyber-enabled theft of information for commercial advantage; joint initiatives to combat climate change; and narrowed scope in national security reviews of foreign investments. President Xi announces China will begin a national cap-and-trade program in 2017; pledges over $18 billion in total to development assistance, peacekeeping, climate change, and women’s rights initiatives. • Policy trends in China’s economy: New state-owned enterprise reform plan repeats ongoing reform efforts and lacks clear direction.
10/06/2015
September 2015 Trade Bulletin
Highlights of this month's edition: •Bilateral trade: U.S. goods deficit in July hits $31.6 billion, the highest monthly deficit this year. •Policy trends in China’s economy: China devalues the RMB, then intervenes to strengthen it again; persistent volatility in China’s stock market fuels investor uncertainty; commodity prices continue to fall as China’s economy slows. •Sector spotlight – Steel: In response to declining domestic demand for steel, China’s mills export their surplus rather than limit production and lay off workers; U.S. and foreign competitors cite dumping.
09/03/2015
August 2015 Trade Bulletin
Highlights of this month's edition: Bilateral trade: Weak U.S. exports lead to a $170 billion deficit in the first half of 2015; U.S. maintains surplus in services trade despite slowing exports growth. Bilateral policy issues: WTO members reach deal to expand the Information Technology Agreement. Quarterly review of China’s economy: China maintains 7 percent GDP growth in the second quarter; stock market sell-off prompts government interference, threatens to derail reforms. Sector spotlight – Semiconductors: Chinese government sets sights on semiconductor industry, placing pressure on U.S.-based multinationals.
08/05/2015
China’s Stock Market Collapse and Government’s Response
This issue brief provides information and analysis of the precipitous collapse of China’s stock market, including the impacts of the fall, the measures employed by China’s government to stem the rout, and the history of volatility in the market before the fall.
07/13/2015
July 2015 Trade Bulletin
Highlights of this month's edition: Bilateral trade: Monthly U.S. goods trade deficit with China is up 15 percent from the previous month as imports outpace exports.Bilateral policy issues: Latest S&ED yields few concrete outcomes, no resolution on issues related to cyber security or China’s activities in the South China Sea. Policy trends in China’s economy: Government introduces a slew of reforms to stimulate economy and halt stock market slide; Standing Committee adopts a far-reaching national security law that redefines the government’s “core interests” to include almost every aspect of private and public life, and behavior of foreign corporations and foreign NGOs operating in China. Sector spotlight – E-commerce: Foreign investors granted full ownership of some e-commerce businesses across China amid liberalization in other value-added telecommunications services in Shanghai FTZ.
07/07/2015

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