Despite all of the rhetoric, it is clear from the numbers that China's ascendency has not been at the expense of the United States.

-Thomas Fingar

China unquestionably occupies a significant place in the world's U.S.-led economic and political system. Will it continue to participate in the system that it has benefited from and contributed to, adapting its policies and practices in order to do so? Or, will it attempt to overturn the current system at some point in an effort to gain global dominance? Thomas Fingar, the Oksenberg/Rohlen Distinguished Fellow at Stanford University's Freeman Spogli Institute for International Studies, will address these core questions in a new research project, arguing that the situation is neither so polarized, nor so simplistic. Former chairman of the National Intelligence Council, Fingar takes an empirical approach to his research, examining whether there have been recurring patterns to China's involvement in the global order; what drives, shapes, and constrains Chinese initiatives; and how others have responded to Chinese actions.

Fingar asserts that there have been patterns to China's participation in international economics and politics over the past 30 years, including a pendular quality to the U.S.-China relationship. According to him, relations between the two countries were largely instrumental during the Cold War era when the United States was at odds with the Soviet Union and China was undergoing a period of self strengthening. U.S.-China relations cooled following the Tiananmen Square incident, the timing of which coincided roughly with the fall of the Soviet Union. Trust between the two countries deteriorated as China displayed its more authoritarian side, and the United States responded with sanctions that did not significantly impede China's economic growth, but did change the relationship in ways that still shape perceptions of one another.

Economics are now the primary focal point of discussions about U.S.-China relations, with a negative light frequently cast on China. "Despite all of the rhetoric, it is clear from the numbers that China's ascendency has not been at the expense of the United States," states Fingar. Trade with China, in fact, creates jobs in the United States, but trade-related jobs are dispersed and therefore not clearly visible. "They are not concentrated in a place where a factory closed, often for reasons that that have nothing to do with China," says Fingar, "but the pain and the political impact is local. I would predict that when our economy turns around, the pendulum will swing further back in a less-worried, less-critical direction."

While China has a legal system and has adopted many international standards, Fingar asserts that "it is still not a society governed by law," and that it in fact does not always measure up to global or even to its own standards. He cites China's record of undesirable practices and issues, such as currency manipulation, government corruption, and intellectual property violation, which complicate and confuse understanding of its involvement in the global system.

Fingar does not believe that the U.S.-China relationship will ever return to the "honeymoon" era of the Cold War, but he says, "The swings of the pendulum and the perturbations in the relationship are less intense and of shorter duration; that is the pattern." Quoting Anne-Marie Slaughter, director of policy planning at the U.S. Department of State, Fingar suggests that the best vision for the global order is "a world in which there are more partnerships and fewer alliances." He cautions against disregarding important, long-time alliances, such as the U.S.-Korea relationship. He notes, however, the crucial fact that alliances assume that there is an adversary, which can marginalize and threaten regional neighbors, such as China, or put allies in the uncomfortable position of having to choose between siding with a neighbor or a distant ally. "We must find a way so that no one has to choose," says Fingar.

On January 6, Fingar outlined the primary points of his new research project at a public lecture co-sponsored by the Stanford China Program and the Center for East Asian Studies, part of the China in the World series. He will also lead Stanford students through an examination of related key issues and questions in "China on the World Stage" (IPS 246), a course that he is teaching during the current winter quarter.

An October 13 New York Times headline article warned that an increasing volatile market for grains could lead to a repeat of the 2008 food price run-up. That price spike left over 1 billion people in a state of food insecurity-a threshold symbolic in its extreme order of magnitude and in the challenges it presents for combating global hunger in the future. In a paper released December 20 in Population and Development Review FSE director Rosamond L. Naylor and deputy director Walter P. Falcon provide insight into the causes and consequences of these volatile events.

"Price variability, particularly spikes, has enormous impacts on the rural poor who spend a majority of their income on food and have minimal savings," said Naylor. "Impacts at the local level have not been well measured, yet are key to improving food security globally." 

Expectations--often faulty--have played a key role in price volatility over the past decade. Uncertain exchange rates and macro policies added to price misperceptions, as did flurries of speculative activity in organized futures markets, particularly as a result of the growing biofuels market.

"These events highlight new linkages between agriculture-energy and agriculture-finance markets that affect the world food economy today," explained Falcon. "More importantly, volatile markets compound problems of low crop productivity, increase reliance on food imports, and aggravate other internal causes of instability--conflict, weak institutions, and inadequate infrastructure--that typically plague the world's poorest countries."

To see how the rural poor were impacted on a local scale, Naylor and Falcon looked at Ghana, Uganda, Malawi, Guatemala, and India. Price changes at the local level during the 2008 price spike were frequently half that of international prices, primarily as a consequence of domestic food and trade policies.

"The price bubble was undeniably grim for poor consumers, particularly for households living under $1/day or $2/day, but not as debilitating as many commentators suggested," said Falcon. "Unfortunately, most price stabilization efforts aimed at the poor, however well intended, ended up helping larger net producers much more than those at the margin."

Additionally, domestic self-sufficiency polices tended to have long-term negative impacts on the international market when governments lacked the resources to defend a targeted price or were ‘large actors' with significant shares of global production or consumption.

For example, in the spring of 2008, the Indian government placed a ban on rice exports--a major staple in the country--when it feared significant increases in grain prices and a spread of Ug99 (wheat rust). This ban affected food prices from Asia to Africa, created mini-panics within food importing countries, and added to global grain price variability. It underscored the growing food-security and crop interdependencies among nations arising from pathogens, prices, and policies.

The extreme heat wave that hit Russia and Eastern Europe in the summer of 2010, coupled with floods in Pakistan, declining estimates of maize stocks in the U.S., and uncertainties about global GDP growth have captured the attention of many analysts and policymakers. What will happen to prices in terms of spikes, trends, and variations during 2011-2013 and beyond is uncertain.

What is known, said Naylor, is that the causes and consequences of food-price variability deserve much more attention if we are going to alleviate global food insecurity in the future.

PESD Director Frank Wolak and Research Associate Richard K. Morse's op-ed in the UK's Guardian, "China's green gift to the world", argues that China's record coal imports actually contribute to reductions -not increases- of global CO2 emissions.

In the January/February issue of Foreign Policy magazine, Thomas Fingar, the former deputy director of national intelligence for analysis, examines Chinese President Hu Jintao's assessment of the economic and political challenges his nation faces. China's "growth has bolstered national pride and earned the respect of people around the world," Fingar writes in an imagined memo from Hu. "But it has also raised expectations at home and reinforced foreign concerns about China's rise. Our successes have made it even more important to make progress on corruption, perceived injustice, and other long-standing problems."