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The United States and European countries can take steps to avoid making the same economic mistakes that Japan committed during the latter's "lost decade," a Stanford economist wrote in a new paper.

The study, published in the IMF Economic Review, describes the reasons Japan was not able to pull out of its long recession in the 1990s, offering some lessons for U.S. and European leaders in the wake of the 2007-09 meltdown.

In particular, the delay in bank recapitalization and the lack of structural reforms in the economic sphere kept Japan from realizing a full recovery, wrote Takeo Hoshi, the Henri and Tomoye Takahashi senior fellow at Stanford's Freeman Spogli Institute for International Studies.

"Bank recapitalization" refers to a governmental reorganization of failing banks, often involving the use of public money to keep them solvent. "Structural reforms" describes how a government might overhaul its economic structures to increase business competition – such as deregulation to cut costs for firms.

The shortcomings in these two policy areas "retarded Japan's recovery from the crisis and were responsible for its stagnant post-crisis growth," said Hoshi, whose co-author was Anil K. Kashyap, an economics professor at the University of Chicago Booth School of Business.

Risky bank lending

Japan's "lost decade" originally referred to the 1990s, though the country has still not regained the economic power it enjoyed in the 1970s and 1980s. Some say Japan has actually experienced two lost decades if the 2000s are counted as well.

Faced with a huge financial crisis at the dawn of its lost decade, Japan had to navigate challenges that other advanced economies had not confronted since the Great Depression, Hoshi and Kashyap wrote.

However, government leaders made mistakes, Hoshi said. One was failure to rehabilitate the banks and another was to misunderstand the nature of the problems afflicting the Japanese economy. For example, much like the United States in 2007-09, the Japanese banks had made many dubious loans to risky customers.

"Instead of recognizing that major structural adjustments were needed, much of the policy response was calibrated under the assumption that Japan faced a simple cyclical problem that could be addressed with indiscriminate fiscal stimulus," wrote Hoshi, the director of the Japan Program at the Walter H. Shorenstein Asia-Pacific Research Center.

For example, on the demand side, monetary policy was not as expansionary as it could have been, he said. Deflation persisted for a long time. And fiscal stimulus packages – such as tax cuts – were inconsistent. Meanwhile, much of Japan's fiscal spending took the form of public works projects that had low productivity.

As for structural reforms, the Japanese government lacked a sense of urgency. For example, even in the reform-minded administration of former Prime Minister Junichiro Koizumi, only eight of the proposed 35 reform initiatives would have directly boosted growth. Of the others, 16 might have indirectly supported growth and 11 would have had no effect on growth, Hoshi said.

Drastic change needed

Unfortunately, some European nations seem to be following Japan's lead, Hoshi said.

"In France, Italy and Spain, bank recapitalization has been delayed and the structural reforms have been slow. Without drastic changes, they are likely to follow Japan's path to long economic stagnation," Hoshi and Kashyap wrote.

The problems that held back Japan seem to be less serious in the U.S., Hoshi said: "Employment protection is low in the United States and the labor market shows high mobility. The regulatory advantage for incumbent firms is smaller than in Europe or Japan and starting new business is relatively easy."

As the researchers noted, the United States and Germany are in a bit better economic shape, partly due to the fact that they did undertake structural reforms sooner rather than later. The U.S. was able to recapitalize its banks more quickly, for example.

Still, five years after the failure of the Lehman Brothers investment bank left the world's financial markets in chaos, the U.S. and Europe are not yet back to what had looked normal before the crisis, according to the research. For instance, employment levels have not reached the levels seen before the 2007-09 crash.

"The U.S. recovery has been tepid despite a number of extraordinary macroeconomic policies (at least in the traditional sense). This suggests that the U.S. economy also has problems, but they are just different from those in Japan and in Europe," Hoshi said.

In the years leading up to the financial crisis, the researchers wrote, U.S. growth was fueled by a consumption boom from rapid housing price increases and rising debt levels.

"In a broad sense, the U.S. economy before the crisis was similar to the Japanese or Spanish economies," noted Hoshi, adding that in Japan, the speculative investment boom in the late 1980s masked structural problems.

Clifton Parker is a writer for the Stanford News Service.

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July 13, 2015

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19:00 – 20:30

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Stanford Center at Peking University

Tsachy Weissman is Professor of Electrical Engineering at Stanford University since 2003. His research focuses on Information Theory and Communications and Statistical Signal Processing. His is the recipient of NSF CAREER award and several best paper awards including the Horev fellowship for Leaders in Science and Technology, Henry Taub prize for excellence in research, incumbent of the STMicroelectronics Chair in the School of Engineering, and IEEE fellow. Weissman is serving on the editorial boards of the IEEE Transactions on Information Theory and Foundations and Trends in Communications and Information Theory. He is also the Founding Director of the Stanford Compression Forum.

In this lecture, Weissman will discuss information theory and statistical signal processing, the interplay between them, and their applications. He will survey some of the activity in his group pertaining to inference and data compression, including: Justification of inference under logarithmic loss; Estimation of the associated information measures from 'big data', and its applications; Compression under logarithmic loss; and Successively refinable lossy compression, with applications to genomic data. 

Stanford Center at Peking University

The Lee Jung Sen Building Peking University

No.5 Yiheyuan Road

Haidian District

Beijing, P.R.China 100871

Tsachy Weissman Professor Electrical Engineering, Stanford University
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The United Nations has thus far fulfilled its charter to prevent a third world war, but with 60 million refugees, continued bloodshed with unresolved civil conflicts and terrorism spreading like cancer, the world's leading peacekeeping organization must spearhead global action, U.N. Secretary-General Ban Ki-moon said Friday at Stanford on the 70th anniversary of the international organization.

Ban, the U.N.'s eighth secretary-general, did not rest on any laurels during his speech at a public event sponsored by the Walter H. Shorenstein Asia-Pacific Research Center (APARC). "I humbly accept criticism that the U.N. is not doing enough," he said. 

However, the situation could have been worse if not for the United Nations, he continued. "Without peacekeepers, or without the U.N.'s continued humanitarian assistance and advocacy of human rights, I'm afraid to tell you that this world would have been poorer, more dangerous and even bloodier without the United Nations."

Ban's visit to Stanford – his second to the university in less than three years – was part of a trip to the Bay Area to commemorate the signing of the U.N. charter. In 1945, representatives from 50 nations gathered in San Francisco to create the United Nations – an international organization aimed at saving future generations from the "scourge of war."

Today, the United Nations has grown to 193 member nations. Its challenges – from climate change and poverty to civil wars and terrorism – have never been greater, Ban said.

"This is a critical year; 2015 is a year of global action," he said. "The U.N. cannot do it alone. We need strong solidarity among government, business communities and civil societies, from each and every citizen."

The fact that so many young people around the globe are drawn to violent narratives is worrisome, Ban said. "Violent terrorism is spreading like cancer around the world."

The rise in terrorist activities stems from "a failure of leadership," he said. That's why the United Nations needs to develop a comprehensive plan of action to address extremism, he maintained.

The U.N.'s 70th anniversary coincidentally fell on a momentous day of tragedy and celebration around the world. Dozens were killed when terrorists launched horrific attacks across three continents – in France, Tunisia and Kuwait – fueling anger, sadness and fear of more violence.

But in the United States, celebrations rang out in response to a landmark U.S. Supreme Court ruling that legalizes same-sex marriages nationwide.

Ban, who has long advocated for equality and last year pushed the United Nations to recognize same-sex marriages of its staff, drew a round of applause when he heralded the court ruling as "a great step forward for human rights."

The June 26 event was co-sponsored by Shorenstein APARC and the Freeman Spogli Institute for International Studies at Stanford University, with promotional co-sponsors Asia Society, Asia Foundation and the World Affairs Council of Northern California

May Wong is a freelance writer for the Stanford News Service.

Coverage and related multimedia links:

Remarks at Stanford University by Ban Ki-moon (U.N. News Centre, 6/26/15)

Photos of Ban Ki-moon at Stanford University (U.N. Photo, 6/26/15)

At Stanford University, Ban says U.N. ready to build a better future for all (U.N. News Centre, 6/27/2015)

U.N. Secretary-General Ban Ki-moon welcomes growing engagement of India, China (NDTV, 6/27/2015)

U.N. Secretary-General Ban Ki-moon speaks at Stanford, celebrates U.N.'s 70th anniversary (Stanford Daily, 6/29/15)

Hoover archival photographs featured at lecture delivered by U.N. Secretary-General Ban Ki-moon (Hoover Institution, 6/29/2015)

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Ban Ki-moon, the eighth secretary-general of the United Nations, urged the audience to see 2015 as a year of global action.
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This article is part of a 12-part Caixin Magazine column series by REAP co-directors Linxiu Zhang and Scott Rozelle. Read the full series here.

 

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The quality of China’s vocational education continuously fails to meet the lowest standards, leaving us with two choices for the future.

The lack of farsightedness in China’s vocational education system means that, despite the large investment poured into it, this system will fail to meet the future demands of its graduates. The wrong goals have been set in China's vocational education, which will inevitably bring serious consequences. These consequences will be felt in the future, however, they are not immediately clear. The problem is that China's vocational education and training system is plagued by fundamental issues, namely that the majority of China's vocational schools are poor (compared to those in Germany), and there is simply no way that China can reach parity.


China’s vocational education and training system is deeply flawed, especially given the large number of vocational schools and the fact that most students enrolling in these schools in the next ten years will be from western and central provinces. Educational experiences are poor, and these problems could soon impact the development process of China.  

Randomized controlled trials conducted by researchers at Stanford University, Peking University, the Hebei Institute of Education Science, Hong Kong University of Science and Technology, Shaanxi Normal University’s School of Education, Hebei University, and the Chinese Academy of Sciences, have gathered representative data on vocational schools in China’s northwestern, central, northern, and eastern regions. 
  
First, vocational students across the country are not learning specialized skills. In this regard, China's vocational schools continually fail to meet even the lowest standards. We randomly selected 10,000 specialized “computer usage” vocational students and 5,000 academic high school students. From this pool, we selected especially poor performing academic high school students within each county, in order to create a more fair comparison with vocational students. For the baseline survey, we had 10,500 students complete a “computer usage” survey. One year later, during the survey assessment phase, we had students complete an  IRT-scaled survey (this survey is meant to assess the absolute knowledge of our “computer usage” students). We found that even vocational students majoring in computer usage still had not mastered new information related to computer usage. In contrast, after one year, academic high school students had mastered computer usage at a much higher level than that demonstrated by vocational students, even though these academic high school students had not studied curriculum related to computer usage.

Furthermore, vocational students had not mastered any type of comprehensive knowledge. In the same study, we had students complete a math, Chinese, and English assessment during the baseline and assessment period. Our results found that not only had students not demonstrated mastery of this content, but that they had actually declined. In other words, after one year, vocational students’ understanding of math, Chinese, and English was actually poorer than it had been a year ago when they entered vocational schools.

Why is the education quality in vocational schools so bad? The answer is simple. China’s vocational education and training system has no standardized or effective management. There is no standardized curriculum, no unified standards for student recruitment, and few of the teachers have experience in the curriculum they are teaching. Teachers at vocational schools are generally those who were relatively ineffective teaching in academic high schools. Although China’s Ministry of Education conducts annual assessments of every stage of the academic education system (elementary school, middle school, and high school), vocational schools are not subject to any checkups or assessments.   

When a school is not teaching its students any kind of specialized knowledge and is instead actually tolerating the student’s decline, students will drop out. Today’s vocational student dropout rate is high. Our study found that dropout rates in China’s central and western vocational schools were as high as 30% to 60%.

If 60% of students are dropping out, what kind of student chooses to stay in vocational school? In 2014, we interviewed several third year vocational students. When asked why they chose to stay in school, most answered “my parents made me stay in school.” In essence, the main purpose of China’s vocational schools is nothing more than to serve as daycare centers for youth.

In conclusion, the current path China has laid out for vocational education and training has failed. In order to improve over the next ten years, China needs to cultivate students, workers, and experts with a strong educational foundation. Teaching students how to weld will not push China into the developed country club. Enclosing students within a daycare center where they study nothing more than dressing smartly and welding has absolutely no use for this country’s development.  

Therefore, China has two choices: either reduce the scale of vocational education and training and thereby encourage academic high schools to recruit students, or reform vocational education by requiring vocational schools to seriously expand the scope of math, Chinese, English and other curriculum instruction. We need to develop human talent in China for 2030 and beyond.  

No matter the solution, China has to establish a structure to ensure that vocational schools meet the country’s standards. Vocational schools will not improve quality through such poor education; vocational schools need supervision; vocational schools need to be subject to evaluations; vocational schools need to cultivate a pool of high-quality dependable talent in order to provide for China’s future economic development.
 


About this series:

REAP co-directors Scott Rozelle and Linxiu Zhang wrote a ten-part series for Caixin Magazine titled, "Inequality 2030: Glimmering Hope in China in a Future Facing Extreme Despair." See below for more columns in this series:

> Column 1: Why We Need to Worry About Inequality

> Column 2: China's Inequality Starts During the First 1,000 Days

> Column 3: Behind Before They Start - The Preschool Years (Part 1)

> Column 4: Behind Before They Start - The Preschool Years (Part 2) 

> Column 5: How to Cure China's Largest Epidemic

Column 6: A Tale of Two Travesties

>Columns 7 & 8: China's Widest Divide

> Column 9: China's Most Vulnerable Children

> Column 10: Why Drop Out?

> Column 11: The Problem with Vocational Education

> Column 12: Reforming China's Vocational Schools (in Chinese)

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“I am the first child of my parents. I have a small brother at home. If the first child were a son, my parents might be happy ... but I am a daughter. I complete all the household tasks, go to school, again do the household activities in the evening … my parents do not give value or recognition to me.”

 

Stanford Assistant Professor of Medicine Marcella Alsan often refers to this comment by a 15-year-old girl from Nepal when she talks about how the division of labor among men and women starts at a young age in the developing world.

“Anecdotally, girls must sacrifice their education to help out with domestic tasks, including taking care of children, a job that becomes more onerous if their younger siblings are ill,” said, Alsan, a core faculty member at the Center for Health Policy/Center for Primary Care and Outcomes Research (CHP/PCOR) within the Freeman Spogli Institute of International Studies, and the Department of Medicine.

More than 100 million girls worldwide fail to complete secondary school, despite research that shows a mother’s literacy is the most robust predictor of child survival. So Alsan is analyzing whether medical interventions in children under 5 tend to lead their older sisters back to school.

She is one of two winners of this year’s Rosenkranz Prize for Health Care Research in Developing Countries, awarded by CHP/PCOR to promising young Stanford researchers.

Her Stanford Department of Medicine colleague, Jason Andrews, is the other recipient of the $100,000 prize given to young Stanford researchers to investigate ways to improve access to health care in developing countries.

Andrews is looking at cheap, effective diagnostic tools for infectious diseases, while Alsan is researching how older girls in poorer countries are impacted by the health of their younger siblings.

“My proposed work lays the foundation for a more comprehensive understanding of how illness in households and early child health interventions impact a critical determinant of human development: an older girl’s education,” she said.

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Alsan, the only infectious-disease trained economist in the United States, said Stanford is the ideal place to carry out her interdisciplinary global health research.

“I am humbled and honored to receive this prize, since Dr. Rosenkranz has done so much for women’s health worldwide,” she said.

Alsan – an MD with a specialty in infectious disease who has a PhD in economics from Harvard – said she intends to estimate the impact that illnesses in under-5 children have on older girls’ schooling using econometric tools.

She will compile data from more than 100 Demographic and Health Surveys (DHS) covering nearly 4 million children living in low- and middle-income countries.

The surveys ask about episodes of diarrhea, pneumonia and fever in children under 5 and record data on literacy and school enrollment for every child in the household.

Alsan also intends to collaborate with partners in sub-Saharan Africa to study the gendered effect of household illness on time use, using culturally appropriate questionnaires.

Douglas K. Owens, a Stanford professor of medicine and director of CHP/PCOR, called Alsan’s work “groundbreaking.”

“Although training is critical, more importantly, her work to date shows a degree of innovation, creativity and rigor that led us to conclude she was likely to become one of the top investigators in her field worldwide,” he said.

Low-Cost Diagnostic Tools

Andrews, also an assistant professor of medicine, has been working on ways to bring low-cost diagnostic tools to impoverished communities that bear the brunt of disability and death from infectious disease.

“I began working in rural Nepal as an undergraduate student and as a medical student founded a nonprofit organization that provides free medical services in one of the most remote and impoverished parts of the country,” Andrews said. “As I became a primary physician, and then an infectious diseases specialist, one of the consistent and critical challenges I encountered in this setting was routine diagnosis of infectious disease.”

He said those routine diagnostics were typically hindered by lack of electricity, limited laboratory infrastructure and lack of trained lab personnel.

“In my experiences working throughout rural Nepal – and in India, South Africa, Brazil, Peru and Ethiopia – I found these challenges to be common across rural resource-limited settings,” said Andrews, who founded a nonprofit Nyaya Health – recently renamed Possible Health – which provides modern, low-cost healthcare to rural Nepal.

Andrews has been collaborating with engineers to develop an electricity-free, culture-based incubation and identification system for typhoid; low-cost portable microscopes to detect parasitic worm infections; and most recently an easy-to-use molecular diagnostic tool that does not require electricity.

“The motivation for these projects was not to develop fundamentally new diagnostic approaches, but rather to find simple, low-cost means to make established laboratory techniques affordable and accessible,” he said.

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The Rosenkranz Prize will allow him to continue to develop a simple, rapid, molecular diagnostic for cholera that is 10 times more sensitive than the tests that are currently available. The diagnostic tool uses paper for DNA extraction, in contrast to traditional approaches that rely on expensive instruments requiring electricity and maintenance.

“We then perform isothermal amplification heated by a reusable, solar-heated, phase-change material,” Andrews said, adding that the entire process is completed in less than 20 minutes and can be performed by anyone with minimal training.

Andrews will enroll 250 patients with suspected cases of cholera in Nepal, using the new diagnostic tools and adapting as many local supplies as possible.

Andrews also intends to establish and curate a website to gather open-source ideas and evidence on diagnostic techniques for use in the developing world.

“Stanford is one of the world’s greatest hubs for innovation and information sharing as pertains to science and technology and is an ideal home for this venture,” he said.

In the current scientific climate, most National Institutes of Health grants go to established researchers. The Rosenkranz Prize aims to stimulate the work of Stanford’s bright young stars – researchers who have the desire to improve health care in the developing world, but lack the resources.

The award’s namesake, George Rosenkranz, first synthesized cortisone in 1951, and later progestin, the active ingredient in oral birth control pills. He went on to establish the Mexican National Institute for Genomic Medicine, and his family created the Rosenkranz Prize in 2009.

The award embodies Dr. Rosenkranz’s belief that young scientists hold the curiosity and drive necessary to find alternative solutions to longstanding health-care dilemmas.

“As in past years, the competition was extremely tough,” said Grant Miller, a senior fellow at the Freeman Spogli Institute and associate professor of medicine who chaired the prize committee this year.

“It’s exciting to see all of the truly innovative global health research being done by junior scholars at Stanford,” he said. “Both Jason and Marcella really exemplify this – and the legacy of George Rosenkranz.”

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A research team led by FSE director Rosamond Naylor has won a $400,000 multi-year grant to study how to create sustainable palm oil supply chains that promote economic growth and environmental sustainability in Indonesia and West Africa. 

Palm oil has become one of the world’s fastest growing and most valuable agricultural commodities. Global production of palm oil doubled in both volume and area each decade between 1970 and 2010, and is expected to double again by 2025. The windfall profits from this rapid expansion have come at a cost of tropical deforestation, biodiversity loss and rising greenhouse gas emissions, and in many cases the economic benefits have bypassed local smallholder farmers. 

"When we talk about sustainability in the palm oil industry, we mean more than saving trees," said Naylor. "The question we are getting at with this project is how can the industry boost rural incomes and alleviate poverty among smallholder farmers, while also reducing deforestation and carbon emissions. We are able to tackle this problem from social, economic and environmental angles because we have a truly cross-disciplinary group of researchers. That's a key strength of this team, and a key strength of Stanford." 
 

Naylor and her team of Stanford faculty, scholars and students will undertake the three-year project with funding from the Stanford Global Development and Poverty Initiative (GDP), launched in Spring 2014. GDP aims to transform Stanford’s capacity to speak to the challenges of poverty and development. This year, GDP awarded more than $2 million to 13 faculty research teams from across the university. 

The new project marks the first venture that connects Stanford’s expertise in sustainability with the Graduate School of Business’ experience in value chain innovations. The team will conduct an evaluation of value chain opportunities for sustainable palm oil production, build corporate partnerships to improve smallholder incomes, and engage in policy advising. 

GDP is a joint initiative of the Stanford Institute for Innovation in Developing Economies (SEED) and the Freeman Spogli Institute for International Studies (FSI). SEED is housed within the Stanford Graduate School of Business. 

Rosamond Naylor is William Wrigley Professor of Earth System Science and Senior Fellow at the Stanford Woods Institute for the Environment and at FSI.

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China’s remarkable aggregation of national power over the past 35 years has been a source of wonderment: to economists, who have been surprised by that country’s consistently high rate of growth; to political scientists, who are at a loss to explain the persistence of authoritarian Communist Party rule despite its more open market order; and to historians, who describe China’s meteoric rise as unprecedented. But to the U.S. national security community, China’s swift climb up the international power ladder has been a source less of wonderment than of increasing concern.

How should America evaluate the risks that the People’s Republic of China (PRC) poses to its current and future interests? It is a crucial question, since sound strategy depends on an accurate assessment of the capabilities and intentions of potential rivals. Significantly underestimating China’s ambitions and its future means to advance them could render the United States strategically vulnerable. Exaggerating those same factors risks an inefficient use of America’s diplomatic, military, and economic resources, while counterproductively stimulating more vigorous PRC investments in hard power than would otherwise be the case.

Much literature has appeared in recent years speculating on future Sino-American cooperation, competition, or conflict. While there is no shortage of theories of international relations to inform conjecture on likely future scenarios, two in particular highlight the sharp contrasts in approach and perspectives that characterize this debate. The first is realism, which assumes an evolving international environment in which fierce competition between leaders and challengers is the norm. The realist dynamic is sometimes called the “Thucydides Trap”, a term inspired by Thucydides’ famous account of the seemingly inevitable conflict between the rising city-state of Athens and the status quo power Sparta as they struggled for dominance of Ancient Greece in the fifth century BCE. Realists who embrace the Thucydides Trap metaphor argue that the risks of hegemonic wars between rising states (such as China) and status quo states (such as the United States) are high. A second and contrasting theory framing this discussion is neoliberalism, which assumes that open-access political systems (which China is not) and market-based economic exchange create opportunities for the realization of positive sum gains between competing powers. Deepening socio-economic interdependence, encouraged and sustained by skillfully designed international institutions, can ensure stability and growing prosperity.

These two perspectives promote very distinct U.S. approaches for dealing with the challenges posed by a rising China. Realists, who believe that states operate in an unsentimental and unforgiving environment, would advise current U.S. leaders to keep ample powder dry, to leverage existing and acquire new allies, and to occasionally accommodate when relevant U.S. interests are much less than those of China. Persuaded that the China locomotive will keep speeding down the tracks in the years ahead, a realist would point to growing U.S.-China friction in the East and South China Seas as the shape of things to come.

Neoliberals would advise the status quo power to maintain the vibrancy and appeal of liberal political-economic norms and institutions in the belief that the contender will find it more advantageous to be a member of a successful club than to start one of its own. More importantly, neoliberals argue that long-term club membership leads to co-option and to an evolutionary change in the contender’s values. Of course, the neoliberal predictions of co-option and an evolutionary change in values are sharply at odds with those of China’s Communist Party, whose leaders envision no evolution concerning its monopoly on political power.

Both Thucydidean realists and neoliberals warn against the adoption of the other’s viewpoint. Realists point out that overly-optimistic predictions of China’s power trajectory could result in a less robust U.S. foreign policy that might encourage PRC aggression, undermine America’s reputation, discourage the commitment of allies, and set conditions for the possibility of a significant strategic setback. Neoliberals counter that too muscular a policy could undercut cooperative efforts at securing optimal agreements between the United States and China that might help improve long-term relations. Moreover, while either side could be correct, both could prove irrelevant if China’s growth slows significantly, seriously weakening its prospects to become a truly formidable challenger.

No matter what the perspectives or underlying assumptions, any useful analysis of this vexing and serious policy dilemma requires a deep understanding of China’s current standing in both regional and global affairs, as well as comprehensive knowledge of the internal and external constraints it faces in trying to realize its long-term ambitions. An effective China policy for the United States is best built on a foundation that is grounded in sober, thorough assessments of the context in which Sino-American relations exist and operate. [...]

The first paragraphs of the article "China's Place in U.S. Foreign Policy" (The American Interest, vol. 10, no. 6) have been reproduced here with permission; access to the full article is available on The American Interest website

Karl Eikenberry is a distinguished fellow at the Freeman Spogli Institute for International Studies, and director of the U.S.-Asia Security Initiative at the Walter H. Shorenstein Asia-Pacific Research Center, announced earlier this month.

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This paper reexamines Japanese policy choices during its banking crisis in the 1990s and draws some lessons relevant for the United States and Europe in the aftermath of the global financial crisis of 2007–09. The paper focuses on two aspects of postcrisis economic policy of Japan: the delay in bank recapitalization and the lack of structural reforms. These two policy shortcomings retarded Japan’s recovery from the crisis and were responsible for its stagnant postcrisis growth. The paper also suggests some political economy factors that contributed to the Japanese policies. In France, Italy, and Spain bank recapitalization has been delayed and the structural reforms have been slow. Without drastic changes, they are likely to follow Japan’s path to long economic stagnation. The situation in Germany looks somewhat better mainly because the structural reform was undertaken before the crisis. Although the recovery has been slow in the United States as well, the problems are at least different from those faced by Japan then and many European countries now.

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The Forbidden City housed the imperial families of China from the 1400s until the early 20th century. It was considered the embodiment of Chinese culture and power, and attracted scholars, officials, and dignitaries. Today it is the largest museum in China, attracting visitors from China and abroad.

This workshop—facilitated by the China Institute and co-sponsored by SPICE—is a unique opportunity for K–12 educators wishing to deepen their understanding of China and bring that knowledge into the classroom. Participants will learn about, and discuss, aspects related to the Forbidden City including but not limited to: architecture, philosophy, politics, Chinese history, and the transition from palace to museum. We will also discuss how to integrate China and Forbidden City-related topics into the classroom, apply critical thinking to the content discussed, and provide take-home resources to all participants.

This workshop is part of We All Live in the Forbidden City (www.walfc.org), China Institute’s unique educational program about the history, culture, architecture, and life of imperial and contemporary China as seen through the lens of this iconic structure. This program also includes books, children’s workshops, and a website with additional resources for parents and teachers.

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