The escalation between India and Pakistan over the terrorist attack in Pahalgam, Kashmir is revealing important insights into India's evolving defense posture and military capabilities. Arzan Tarapore joins Michael McFaul to discuss what happened between April 22 and May 10, what the clash says about the security landscape of the Indo-Pacific region, and why it matters in global politics.

Arzan Tarapore is a research scholar at the Center in International Security and Cooperation at the Freeman Spogli Institute for International Studies at Stanford University. His work focuses on Indian military strategy and regional security issues in the Indo-Pacific. Prior to his scholarly career, he served for 13 years in the Australian Defence Department in various analytic, management, and liaison positions, including operational deployments and a diplomatic posting to the Australian Embassy in Washington, D.C.

Watch the video version of their conversation above, or listen to the audio below, on Apple Podcasts, Spotify, and other major podcast platforms. 

TRANSCRIPT:

McFaul: You're listening to World Class from the Freeman Spogli Institute for International Studies at Stanford University. I'm your host, Michael McFaul, the director of FSI.

Today I'm talking to Arzan Tarapore, a research scholar at the Center on International Security and Cooperation, which is part of the Freeman Spogli Institute here at Stanford. His work focuses on India's military strategy and regional security issues in the Indo-Pacific, which is why he is the perfect person to talk with us today about the escalation earlier this year between India and Pakistan in the Kashmir region. And India's evolving military strategy more generally, as it relates to players like the United States, China, and Russia.

Arzan, welcome to World Class.

Tarapore: Thanks very much, Mike. It's good to be on.

McFaul: So, I want to start with a chat group I was on several weeks ago with a bunch of former U.S. government officials. And at one point, somebody interjected, “We are about to see the biggest military war in the world since Russia invaded Ukraine.”

And I have to tell you, I was taken aback. I don't follow issues between Pakistan and India as closely as I should, and I look forward to learning more about that now that my book is done and I have more time.

But that really startled me. Take us back to that moment. Help us understand what occurred that made people so alarmist, and then why that didn't turn out to be the case.

Tarapore: Yeah, okay, that's a very big question. Let me see if I can hit all the high spots. Look, the trigger for that comment, probably, was a terrorist attack that happened in India at a place called Pahalgam on the 22nd of April. And it was an attack that was conducted, as far as we can judge, by a Pakistan-based terrorist group that attacked innocent civilians.

And in particular, it was designed, it seems, to be as inflammatory, as provocative as possible, right? Because the terrorists were at a tourist spot, and they rounded up people and got those people to identify themselves — whether they were Hindu or Muslim — and they executed the Hindu men.

McFaul: Wow. Oh my God.

Tarapore: So it was designed to be as communal and as provocative as possible. And in that sense, it worked because the Indian government almost immediately was assumed to be poised to retaliate.

And this is interesting. This is notable, because about as recently as a decade ago, it was always an open question whether India would retaliate militarily against these types of terrorist attacks. And the situation has changed so much in the past decade that this time around it was almost assumed from the get-go that India would retaliate. And indeed they did retaliate.

McFaul: And they did.

Tarapore: And they did. And probably the reason that that member of your group chat said what they said is because India and Pakistan have, for decades, been poised with their militaries pointed at each other. These are very large militaries, very capable militaries. And nuclear armed militaries.

McFaul: Yes. Let's not leave out that small fact.

Tarapore: Exactly, right? Which is always overriding concern in Washington. So, it was President Clinton who, back in the 90s, called South Asia the most dangerous place in the world. He identified India Pakistan as the sort of scenario that if any scenario in the world was going to lead to a nuclear exchange, since the 90s there's been a strong case to be made that it would be India Pakistan. And that's always colored American thinking whenever there's a crisis between India and Pakistan and this time around was no different.

McFaul: And tell us how it played out, and how it ended.

Tarapore: So, the inevitable—that is, an Indian military attack—happened on the night of 6-7 May. So, in the very early hours of the 7th of May, local time. At about 1 a.m., India launched standoff attacks, meaning attacks launched by aircraft that did not cross into Pakistani airspace.

So the Indian aircraft stayed on the Indian side of the border and launched long-range munitions plus probably some loitering munitions, so sort of what some people call suicide drones. So, drones that are designed to go to the target and destroy the target and themselves.

S,o India launched these standoff attacks against nine terrorist targets, terrorist sites.

McFaul: And they were terrorist sites, right?

Tarapore: Yes. So there's a line of Pakistani information operations that suggests that civilians were killed. That may or may not be true. But certainly the Indian position is that they were terrorist targets and that the Indian claim is that the strike was designed to minimize civilian casualties as far as possible. Hence they attacked, for example, at 1 a.m., right, when places were probably not occupied.

McFaul: Got it.

Tarapore: So, a bunch of these sites were sort of in the countryside. And we know that because they showed the full motion video of the sites being destroyed by the missiles and they are just for some of them were just a building in the middle of the countryside or a couple of others that were terrorist headquarter complexes in the middle of cities and these are big sort of campuses that include living quarters and operation centers and mosques all on the same campus. And a couple of those sites were struck as well.

But again, at 1am and in a very targeted fashion to minimize civilian casualties. And by and large, they did a pretty good job of minimizing civilian casualties.

McFaul: So they could have done more and they chose this kind of response, right?

Tarapore: Exactly. And not only that, but they also in the subsequent press briefings, they were very clear in saying, “Listen, our quarrel is with the terrorists. We do not intend to start a war with Pakistan. We will respond if Pakistan responds to us. But we very deliberately have not struck Pakistan military targets or targets of the Pakistan state. We've only struck terrorists. And so as far as we are concerned, we have done what we needed to do. Now it's up to Pakistan to stand down and not retaliate.”

Of course, there was no chance of that happening. Pakistan did retaliate. And so then we entered a period of about three or three and a half days of tit for tat attacks between India and Pakistan. Again, all of them largely targeting each other's particular military sites; everything from sort of air defence sites to air bases on each side.

McFaul: On each side, right?

Tarapore: On each side.

McFaul: And did planes cross the line, or was it was the same kind of thing that you just described?

Tarapore: Planes never crossed the line, as far as we know. So, even though there were claims that some aircraft were shot down on the Indian side, and the Indian military leadership has subsequently conceded that, admitted that.

McFaul: So there were? That has been confirmed? I didn’t know that.

Tarapore: They have confirmed that they suffered some losses. They have not confirmed how many or what type. But it seems to be somewhere in the order of two to five Indian aircraft were shot down.

A bunch of Pakistani air bases were struck by Indian Air Force strikes. And this time around, unlike in the last crisis in 2019, the Indians were very assiduous in releasing battle damage assessment—photography and video—to prove they did actually hit these targets.

And through this whole process of about three and half days of tit for tat strikes, where the Indians scored a few big strikes against the Pakistan military and the Pakistan military did not really score any big hits against the Indian military. There were a few rounds that went astray and did sort of hit civilian targets, but by all accounts unintentionally. Through this all, the two militaries tried to keep things relatively proportionate. Neither one took big steps. They did not cross big thresholds to escalate.

But then on the last day, there were some concerns that Pakistan was in fact preparing for a bigger escalation. That's when the U.S., which had hitherto sort of tried to stay hands off, that's when the U.S. started making some phone calls to both capitals.

And then as probably prompted by that, prodded by U.S. pressure, Pakistan made a phone call to India—the Director General of Military Operations made a phone call to his opposite number in India—suggesting a ceasefire, which India agreed to. And that was the end.

So it was about a three and a half day stoush, little conflict, mostly run by missiles and loitering munitions. So no one crossed into the other country’s territory. It was a very sort of modern conflict in that sense.

McFaul: So, I want to get back to the Americans in a minute, but before that: what did you learn about Pakistani military capabilities and Indian military capabilities as a result of this?

Tarapore: So it was pretty interesting. It was very interesting, actually. Because for decades, basically throughout the 21st century, we have been worried about the prospect of a conventional war between India and Pakistan as a result of a terrorist attack.

And the mental model that we've always had is a large, combined arms, ground-centric invasion by India against Pakistan, right? Basically a war.

And for years, India has been trying to find options short of that in a way that would not prompt a Pakistan nuclear escalation. And it seems, after a couple of crises, that India has found a way to hit back at Pakistan militarily using these standoff capabilities that are relatively new in the Indian arsenal.

So, India has recently acquired a lot of these capabilities that have given it the strategic option to hit Pakistan without starting a war, So, when you ask, what did we learn about their capabilities, we learned that India has the capability to conduct these standoff attacks. And interestingly, from my point of view, the real star for the Indian military was air defense.

Whereas India managed to score a few good hits against the Pakistan Air Force and the terrorist infrastructure on day one, the really interesting thing was that despite Pakistan launching a bunch of mostly drone attacks against India, they did not score any significant hits. And this was a result of a layered air defense system that India has built up, which I was surprised by. The effectiveness was surprising.

McFaul: And where do their missile defenses come from? Are they Russian? Are they mixed?

Tarapore: I'm glad you asked Mike. They come from all over. A lot of it is indigenous.

McFaul: Indigenous! Okay, I didn't know that.

Tarapore: Some of it is indigenous, the shorter range. There's a surface-to-air missile called Akash, which is an indigenous system. There are some old legacy guns that the army operates that prove very effective.

But the really interesting thing that think that you would find in particular interesting is that the most sophisticated—which is to say, the most recently acquired and longest range system that provides the biggest bubble—was the S-400, which India acquired from Russia, much to the chagrin of the United States.

McFaul: Yes, the United States. It was a huge fight, right?

Tarapore: Yup! The U.S. threatened CAATSA sanctions against India for it.

McFaul: Tell everybody what CAATSA sanctions are. It’s a specific category of sanctions passed in the Trump administration, wasn’t it?

Tarapore: Yep, which is designed to deter countries from acquiring Russian equipment. So, the Indian deal to acquire S-400s was happening contemporaneously and the U.S. was always on the horns of a dilemma whether they should enforce CAATSA sanctions against India or issue a waiver.

As far as I recall, the U.S. decided to not make a decision. They never imposed the CAATSA sanctions, but nor did they issue an indefinite waiver. So it was always something that years ago was sort of hanging over the head of the relationship that the U.S. did not go through with sanctioning India. And the Indians now, after Op Sindoor, after this clash, now feel vindicated that in fact they acquired S-400s and you know what? They they proved to be extremely effective in protecting India.

McFaul: Super interesting. So they were right. I remember when we were trying to prevent the Russians from selling the S-400s to the Iranians during our negotiations over the Iran nuclear deal long ago. On paper, this was a significant capability. It sounds like in reality it is as well.

Tarapore: It absolutely is.

McFaul: Let's talk about the geopolitics. Let's just talk about the reaction. Walk us through U.S., China, Russia. How did they react to this conflict? And what are your takeaways in terms of the geopolitics of a very complicated set of bilateral relationships, especially with India, it seems to me, but with Pakistan as well.

How did the great powers react? And what do we learn about great power competition from this conflict?

Tarapore: So as you would know, as listeners would know, China is Pakistan's primary patron, great power patron. It provides Pakistan the bulk of its military capability. And in fact, this India-Pakistan clash was seen by some in some quarters as a test of Chinese military capability . . .

McFaul: Yes.

Tarapore: . . .  because the Pakistanis operate so much Chinese equipment.

Well, I think it's not a very good test of Chinese capability for many reasons. One, because the equipment itself that Pakistan operates is lower grade export variants of what China’s is. It's not integrated into a system in Pakistan in the same way as it is in China. And it's not used with the same what we would call “multi-domain doctrine” as the Chinese use.

So it's not a very good test of the Chinese equipment.

McFaul: Okay, well that's an important point, a very important point. They don't have the best stuff.

Tarapore: Yeah, that's right. They don't have the best stuff and they don't use it “properly,” quote unquote, in the same way that the Chinese do.

So, from the Indian point of view, this is a country, India, that has always been concerned about what they call the collusive two front threat: Pakistan and China ganging up on India, where if there was a crisis or a conflict with one, then India was always concerned that the other rival would opportunistically take advantage of it and open a second front.

I've always been skeptical of that. And I think what this conflict showed was what India considers to be no longer a two front dilemma, but one reinforced front. Because in this view, Pakistan was essentially, if not an appendage of China, it was nevertheless underwritten by China.

It may, according to some accounts, have benefited from real-time Chinese support during the conflict. For example, intelligence support, electronic warfare support by China, perhaps even Chinese personnel helping to advise Pakistan on how to use its weapons and how to plan and operate them. We don't know if that's true, but that's a possibility.

McFaul: Speculation, interesting That's a big step.

Tarapore: It is a big step. And so if you ask about China's approach to this, then clearly China is not neutral in this, right? China is underwriting Pakistan in this. But openly, diplomatically, it's not going to take a position and it's not going to take advantage of this sort of conflict to cause trouble on the India-China border. It's not that sort of exploitation.

Similarly, as with the U..S, there were Russian comments throughout this conflict that either proponents of an India-Russia relationship or critics of an India-Russia relationship could use instrumentally.

Some people, sometimes some Russian officials said something about India and Pakistan sort of creating this sense of equivalence that in fact they're not on our side, that they're being ambivalent. Others would say that no, in fact, Russia was more solidly behind us than any other country was.

And the same occurred with the U.S. There were U.S. officials who commented that either India is a victim of terrorism and that Pakistan is a perpetrator of terrorism, which pleased Indians, or that this conflict is none of our business, that it's something for India to handle, which they could live with.

Or, when President Trump started talking about India and Pakistan having been at war for a thousand years or whatever he said . . .

McFaul: Thousand years, he said. Yes.

Tarapore: . . . Indians rolled their eyes and were frustrated because for decades Indian officials have been trying to get Americans to internalize this idea that India is an important partner of the U.S. and that this hyphenation between India and Pakistan is an outdated idea that no longer applies.

And now here we have a President of the United States, again talking about India and Pakistan in the same breath, talking about having mediated between them, talking about having coerced both sides using the cudgel of trade deals, and promising to get the two sides to sit down and talk about Kashmir.

All of these things to anyone who doesn't follow South Asia, prima facie sound reasonable. To anyone who follows South Asia, these are all red lines and big alarm bells, especially in India, because they go against decades of American policy.

And so it was a sense of, in the extreme, a sense of betrayal. Or at a minimum, was a sense of rolling your eyes at a president who has not been well briefed.

McFaul: Who doesn't know the details. So what do you think? Was it was he just winging it, or was this really a policy change that was scripted?

Tarapore: No. So the interesting thing is, I mean, if you look at what the United States, quote unquote, deep state did—that is, the State Department, the U.S. State Department and the Secretary of State Marco Rubio—their comments were very consistent with U.S. policy over the last couple of decades. The concern is strategic stability, that these are two nuclear armed countries, we don't want conflict escalating carelessly, and that India is in fact a victim of terrorism and that, you know, there's no role for the United States to mediate a Kashmir issue.

There was none of that sort of sense, right? The State Department and the Secretary of State played a very straight bat and were consistent. It was President Trump who spoke extemporaneously about a conflict he seems to be not well-versed in, which has raised heckles.

But also, on the one hand, we can say that this is just a president speaking extemporaneously. On the other hand, he is the commander in chief of the United States.

McFaul: Exactly, yeah, right, exactly.

Tarapore: So you can't quite ignore what he says.

McFaul: Right. And just two seconds on the Russians. You gave us a little bit of it, but did they seem pleased? Obviously, they seem pleased with how their S-400s performed. Is this another – because obviously Modi has a pretty special relationship with Putin, I would say, compared to other leaders of democracies. Is this seen as a sign of closer relations between India and Russia, or is that too far?

Tarapore: I think that's going too far. I think the broader trend of India trying to wean itself off Russia remains, but it may have been set back a little bit by this. And what I mean by that is, for example, even if you take just the S-400s themselves, India bought five regiments of them and only has taken delivery of three of them.

COVID interrupted the deal, right? COVID interrupted the deliveries and then the Ukraine war interrupted the deliveries.

McFaul: Okay, I didn't know that.

Tarapore: And so the Indians are still waiting to take delivery of two regiments. And now, again, as we've said, this conflict seems to have vindicated the Indian decision to acquire S-400s. And that in fact, you know, there may be niche military capabilities that the Russians can offer India that proved to be operationally useful. So this relationship is far from a relic, right? This relationship is very much a live relationship that yields dividends for India.

McFaul: Great point. And tragically, the Russians have learned a lot about how to use drones in Ukraine. I just talking to some officials who work on European security, and they are way far ahead of where we expected them to be in terms of that. That could be an exportable technology in the future for other countries, for sure.

Tarapore: Absolutely.

McFaul: So to close out: give us your sense of what's next. What do you think happens here? Is this just a one-off or are you worried about other escalatory events?

Tarapore: An India-Pakistan crisis is never a one-off.

McFaul: That's a good point! I shouldn't laugh, but it's been there for a long long time.

Tarapore: It's been there for a long, long time. So, the sub-conventional campaign of terrorism based in Pakistan against India will continue. And as I said at the outset, what used to be hard to think of and then became a question of uncertainty has now become a certainty that India will retaliate.

Modi, after this conflict, gave a speech where he basically pledged that any future attack against India will be met with retaliation, Indian military retaliation. So it is now a matter of policy that India will retaliate against Pakistan.

McFaul: Before go on: we have not—the United States and obviously not China—we do not have enough influence vis-a-vis Pakistan to shut those terrorist camps down, right?

Tarapore: No way. This is foundational to the Pakistan army, foundational to the most powerful political actors in Pakistan.

McFaul: Got it.

Tarapore: And I think what this latest conflict shows is that India also recognizes that it is futile to try and dissuade the Pakistani military-jihadi complex from attacking India.

That used to be what they tried to do: to dissuade them, to deter them. What we've seen in 2025 is India recognizing it cannot dissuade Pakistan. It must instead impose costs upon these terrorists, and now the Pakistan army as well, so that it just makes it harder for them to attack India, so that attacks become less frequent and less provocative.

That seems to be where India is leaning. It is expecting future attacks from Pakistan And it's correct. And it will retaliate next time. That is a highly probable eventuality.

The question for me is, okay, so we now expect this sort of conflict to recur. The question is, what does it mean for India's overall defense posture, including what lessons does India learn for deterring conflict with China on the land border. And what does it mean for India's ability to project power into the Indian Ocean region? This is a country that faces challenges, security challenges on all sides.

And every time one of these fronts becomes active and it seizes the attention of decision makers in Delhi, the concern is that India will react to it and it will over learn the lessons of the last crisis and it will come at the expense of other priorities elsewhere.

So that'll be the thing that I watch. To what extent does this cast a shadow over Indian security planning for the months and years ahead?

McFaul: Wow, it sounds super scary. It sounds like Clinton was right, what he said back then. And when you add, as you did, we're talking about two nuclear powers. Obviously, China is a nuclear power.

Tarapore: Three!

McFaul: Three. This is frightening part of the world. That's why we're grateful, Arzan, to have you on World Class! We're grateful to have you at FSI and at Stanford, because we’ve got to be following this issue. So thanks for joining World Class today.

Tarapore: Absolutely my pleasure. Thanks Mike, for bringing some attention to this issue.

McFaul: You've been listening to World Class from the Freeman Spogli Institute for International Studies at Stanford University. If you like what you're hearing, please leave us a review and be sure to subscribe on Apple, Spotify, or wherever you get your podcasts to stay up to date on what's happening in the world, and why.

When Stanford sociologist Gi-Wook Shin left his home country of South Korea in 1983 to pursue graduate studies at the University of Washington, he was certain he would return to Korea upon graduation. More than 40 years later, Shin, the William J. Perry Professor of Contemporary Korea and a senior fellow at the Freeman Spogli Institute for International Studies, is still in the United States. 

Yet he does not consider himself a case of brain drain for Korea. Shin, who is also the founding director of the Korea Program at the Shorenstein Asia-Pacific Research Center (APARC) and APARC director, has continuously contributed to Korea by leading transnational collaborations, researching and publishing on pressing issues in Korean affairs, and otherwise engaging in diverse intellectual exchanges with the country.

Shin’s experiences sparked his interest in the sociological patterns of mobile talent and a central question: How do countries attract, develop, and retain talent in a globalized world? His new book, The Four Talent Giants (Stanford University Press, 2025), explores that question regarding transnational talent flows from a comparative lens by examining how four strikingly different Asia-Pacific nations – Japan, Australia, China, and India – have become economic powerhouses.

We interviewed Shin about his book – watch:

Sign up for APARC newsletters to receive our scholars’ research updates >

The book’s main idea, Shin explains, is that how countries manage talent is key to their strength and future success. He calls the four Asia-Pacific nations the book examines “talent giants” because each has used a distinct talent strategy that has proven critical to national development. Three of these nations – China, Japan, and India – are among the top five economies in the world in terms of GDP, and Australia, despite its relatively small population size, is third in terms of wealth per adult.

In The Four Talent Giants, Shin investigates how these four nations have become global powers and sustained momentum by responding to risks and challenges, such as demographic crises, brain drain, and geopolitical tensions, and what lessons their developmental paths hold for other countries.

A New Framework for Studying Human Resource Development 

Asia’s robust economic growth over the past forty years is nothing short of a remarkable feat. The Asia-Pacific today continues to be the world's fastest-growing region, despite global economic uncertainty. How did this phenomenal ascendance come about?

The existing literature has emphasized common “recipes” of success among Asia-Pacific powers. Endeavoring to find one-size-fits-all formulas that could be replicated in other countries seeking rapid development, it has overlooked the distinct developmental journeys of Asian nations. “We need a new lens, or framework, to explain their successes, while also accounting for cross-national variation in development and sustainability,” writes Shin. 

In his book, Shin examines talent – the skilled occupations essential to a nation’s economy – as a key driver of economic development. While all countries rely on human resources for development, their talent strategies vary based on historical, cultural, and institutional factors. Shin introduces a new framework, talent portfolio theory (TPT), inspired by financial portfolio theory, to analyze and compare these national approaches.

“TPT views a nation’s talent development, like financial investment, as constructing a ‘talent portfolio’ that mixes multiple forms of talent – domestic, foreign, and diasporic – adjusting its portfolio over time to meet new risks and challenges,” he explains. Just as an investor may select different financial products in a mix of assets, countries can create talent portfolios by picking from various strategies.

Shin identifies four main strategies by which a country can harness talent – what he calls the four B's: 

• “Brain train” signifies efforts to develop and expand a country’s domestic talent or human capital.
• “Brain gain” refers to attracting foreign talent to strengthen the domestic workforce.
• “Brain circulation” involves bringing back nationals who have gone abroad for work or study.
• “Brain linkage” means leveraging the global networks and expertise of citizens living overseas through transnational collaboration.

Shin uses TPT as an analytical framework to examine how each of the four talent giants has constructed its distinct national talent portfolio and how this portfolio has evolved. As in an investment portfolio rebalancing, a nation can maintain diversification across the four B's and within each B. TPT therefore offers a holistic framework for understanding the overall picture of a country’s talent strategy, and how and why it may “rebalance” its talent portfolio.

Throughout the book, Shin shows that, while Japan has relied on the brain train strategy, Australia, whose population was too small for such an approach, emphasized brain gain. China used brain circulation: it first sent students and professionals abroad to learn, then implemented policies to encourage them to return. India, by contrast, established linkages among its diaspora and used them to develop its economy.

New Geopolitics of Global Talent: Lessons and Policy Implications

The case studies of the four talent giants reveal that there is no single path to talent-driven development. Each of the four Asia-Pacific countries has built its unique talent portfolio, balancing human and social capital, homegrown and foreign-educated individuals, and domestic and diasporic talents. While the talent giants use all four B's to some extent, each emphasizes them differently, reflecting diverse strategies and development paths. The core findings of these studies offer valuable insights for countries aiming to design effective talent policies. 

The four B's were instrumental in the economic rise of the four Asian nations, and they will be equally critical in addressing new challenges facing all economies, from demographic crises to emergent geopolitical tensions. For the United States, one such challenge is its sprawling competition with China, where the battle for talent is heating up in the race for technological supremacy.

Shin warns that the advantage the United States has long held in technological innovation, driven by its ability to attract skilled foreign talent, is now at risk from the Trump administration’s anti-immigration policies, pressures on universities, and cuts to research funding. “Immigrants have not just filled jobs,” he emphasizes. “They have created new industries and helped the US and their home countries. If the US makes it harder for talent to come in and stay, it risks hurting its long-term success.”

The Four Talent Giants is an outcome of Shin’s longstanding project investigating Talent Flows and Development, now one of the research tracks he leads at the Stanford Next Asia Policy Lab (SNAPL), which he launched in 2022. Housed at APARC, the lab is an interdisciplinary research initiative addressing Asia’s social, cultural, economic, and political challenges through comparative, policy-relevant studies. SNAPL’s education mission is to cultivate the next generation of researchers and policy leaders by offering mentorships and fellowship opportunities for students and emerging scholars.

Shin notes that the SNAPL team illustrates all four B’s in his talent portfolio theory, as some members are U.S.-born and trained, some come from Asia and, after working at the lab, return to their home countries, whereas some stay here, promoting linkages with their home countries. “In many ways, this project shows what is possible when we invest in talent and encourage international collaboration.”

In the Media

Stanford Scholar Reveals How Talent Development Strategies Shape National Futures
The Korean Daily, July 13, 2025 (interview)
- English version
- Korean version

Over the past two decades, China has pursued an ambitious plan to establish an accessible and affordable health system that meets the needs of its population. As part of this journey, China’s leadership implemented comprehensive health system reforms and achieved near-universal health insurance coverage at a relatively low per capita income level. Key to this process was the integration of rural and urban resident health insurance programs, which has proven to yield positive outcomes in health care utilization, physical health, and related equity issues. Thus far, however, the integration’s potential psychological effects have been understudied.

New research, published in the journal Health & Social Care in the Community, addresses this gap in the literature. The researchers – Stanford health economist Karen Eggleston, the director of APARC’s Asia Health Policy Program (AHPP); Peking University’s Gordon Liu; and Renmin University of China’s Yue-Hui Yu and Qin Zhou, the latter a former visiting scholar with AHPP – find that the urban-rural health insurance integration has been beneficial for improving mental health among China’s rural adults.

Their study underscores the potential of policy-driven health system reforms to address longstanding disparities, promote mental well-being in vulnerable communities, and enhance quality of life among aging populations. This is the researchers’ final installment in a series of studies on China’s urban-rural health insurance integration.

• Sign up for APARC newsletters to receive our scholars' research updates >
• Learn more about Dr. Eggleston's related research project, "Addressing Health Disparities in China" > 

Tracking Mental Health Over Eight Years

For decades, China had a fragmented health insurance system, which led to disparities between different populations and hindered the implementation of the Healthy China 2030 blueprint, a bold national strategy to make public health a precondition for all future economic and social development. Responding to this challenge, in 2016, China announced plans to unify its rural and urban health insurance programs. The unified health insurance system, called Urban and Rural Residents’ Basic Medical Insurance (URRBMI), offered equal health service packages and insurance benefits to rural and urban residents. Studies have shown that the integrated system improved healthcare access for nearly 800 million rural residents and helped reduce coverage gaps and inequality. Yet evidence about the integration’s potential psychological impacts has been limited.

Eggleston and her co-authors hypothesized that this reform might also benefit rural adults’ psychological well-being. To test this hypothesis, the researchers conducted a comprehensive analysis using data from the China Health and Retirement Longitudinal Study (CHARLS), a nationally representative survey that tracks health, economic, and social variables among Chinese adults aged 45 and older. The study focused specifically on rural residents, examining changes in mental health, particularly depressive symptoms, before and after the insurance integration. Data from four waves of CHARLS, spanning from 2011 to 2018, allowed the team to analyze trends over a substantial period.

The researchers used an event study combined with a time-varying difference-in-differences (DID) approach, capturing the effect of the health insurance integration on depressive symptoms and comparing changes over time between those affected by the reform and a control group not yet impacted (since local governments introduced the integration reforms in different years, samples in the control group had constantly entered the treatment group during the survey period). This method helps isolate the effect of the policy from other confounding factors, providing a clearer picture of causality. The researchers further examined the heterogeneity of the integration effect across subgroups by gender, age, health status, and family economic status. They also analyzed possible mechanisms through which the reform produced psychological effects

Key Findings: A Significant Drop in Depression

The researchers find that the health insurance integration was associated with a measurable reduction in depressive symptoms among rural seniors. Specifically:

• CES-D scores – a standard measure of depression severity (using a version of the Centre for Epidemiological Studies Depression Scale) – decreased by an average of 0.441 points among those covered by the reform.
• The likelihood of experiencing depression dropped by approximately 3.5% in the post-reform period.
• The decline in depression scores following the integration was continuous, suggesting cumulative effects of the reform. Notably, some psychological benefits appeared up to two years before the reform took effect, likely due to public awareness and positive expectations generated by advance announcements from local authorities.

The results were statistically significant, indicating that the health insurance integration reform has significantly improved the mental health of rural adults and reduced their risk of becoming depressed.

The findings also indicate that a key driver that produced continuous positive psychological effects was the integration’s reduction of health care costs for rural residents, particularly for hospital care. By lowering financial barriers to treatment, the integration improved access to healthcare and made its use more equitable. This, in turn, boosted rural adults’ satisfaction with their health and overall sense of well-being. The improvement may have set off a positive cycle, encouraging more social engagement and physical activity, which helped further ease symptoms of depression.

While the reform reduced depressive symptoms for both male and female older adults, the findings revealed differences across subgroups. It appears the reform did not significantly reduce depressive symptoms for those aged 40-49 and over 70, individuals in poor health, or those in the lowest economic bracket. The researchers attribute this to ongoing financial barriers and limited insurance financing, which may blunt the perceived benefits for high-need groups.

Policy Implications: A Path Toward Health Equity

The study’s co-authors highlight several policy implications for China:

• Expand and standardize coverage: Build on the success of the URRBMI by moving from local-level integration to broader provincial or national coverage, and encourage enrollment among vulnerable populations through subsidies.
• Improve equity for high-need groups: Design more targeted insurance policies for older adults, those with chronic illnesses or disabilities, and low-income groups, especially by covering outpatient treatments for high-cost conditions.
• Increase funding for the URRBMI: Despite progress, reimbursement rates remain low, highlighting the need for greater investment in the program.
• Strengthen rural health infrastructure: Insurance reforms must be paired with improvements in rural healthcare facilities and services to ensure quality care is both accessible and effective.

China’s experience offers valuable lessons for countries aiming to achieve universal health coverage and those grappling with health disparities and aging populations. The positive association between insurance integration and mental health among rural adults in China underscores the importance of comprehensive, inclusive policies addressing financial and social determinants of health.

The study’s findings highlight the need to ensure that the most vulnerable populations benefit equally from health reforms. They also serve as a compelling reminder that thoughtfully designed and implemented reforms can improve physical health and increase mental resilience and social cohesion.

Alicia R. Chen, PhD Candidate in Political Science, Stanford University
Research Topic: Roads to (No) Influence: Domestic Incentives and the Distribution of Chinese Aid

Alicia Chen is a PhD candidate in the political science department at Stanford University. Chen’s research focuses on conflict, development, and international economics, with an empirical focus on Chinese development aid. Chen holds an MA in international policy from Stanford University and a BA in political science from the University of Southern California. Prior to doctoral studies, Chen was a Research Specialist at the Empirical Studies of Conflict (ESOC) project at Princeton University. 

Q: What advice would you give to someone just starting out in your field of research?
A: I encourage everyone to do fieldwork in the countries they are interested in studying as early as possible. Media coverage (and even data) often doesn’t capture the full picture, and it was immensely helpful to see for myself what the situation is on the ground.

Q: If you could snap your fingers and have one part of your research magically completed, what would it be?
A: Data collection… Many fieldwork trips end up taking much longer than expected because of bureaucratic delays, and there is not much that can be done to speed up the process.

Matthew DeButts, PhD Candidate in Communication, Stanford University
Research Topic: PRC Influence and Chinese Diasporic Media in the Digital Age

Matt DeButts is a PhD candidate in communication, studying Chinese media, censorship, and propaganda. Before coming to Stanford, Matt wrote about Chinese economics and politics for The Economist Intelligence Unit in Beijing, covered culture as a special correspondent for the Los Angeles Times, and edited the foreign affairs newsletter Legation Quarter. At Stanford, he was a 2023-24 Human-Centered Artificial Intelligence (HAI) fellow, and a graduate research assistant at the Stanford Internet Observatory. His academic work has been published in the Journal of Communication, Social Media+ Society, and EMNLP Findings.

Q: What advice would you give to someone just starting out in your field of research?

Q: How would you describe your research to a fifth grader?
A: My research looks into how powerful people, like governments, try to get people to believe things. Sometimes, governments treat you like a grown-up, explaining things and allowing you to decide for yourself. But other times, they treat you like a kid, always thinking they know what’s best for you. My research looks into how and why they do that.

SCCEI offers grants to support exceptional researchers conducting data-driven research related to China's economy. We accept proposals two times per year, Fall and Winter. Visit the SCCEI Research Grants and Fellowships webpage for more details and current opportunities.

Slowing Growth, Thriving Tech
Despite slowing economic growth, China’s industrial and tech strength remains formidable. Its economy is ~75% the size of the U.S. in dollar terms, but China accounts for 33% of global manufacturing value-added, projected to rise to 49% by 2050. “China is very strong in all sorts of advanced manufacturing... in many cases it is almost entirely a Chinese concern.”

The gap is vast, according to another panelist: in 2023, China had 1,500 commercial ships under construction; the U.S. had three. Non-state firms drive export growth, crowding out for shrinking shares of foreign-led exports (60% to 30%). “There is plenty of profitable activity going on, especially in the non-state sector.”

Meanwhile, Made in China 2025 has paid dividends. “At a first approximation, it looks like a pretty good success,” said one panelist, citing EVs, clean tech, and automation, but admitted that weaknesses persist in sectors like semiconductors and aerospace. Nevertheless, China’s highly competent manufacturers, tech companies, and deep reservoir of human capital ensure that despite costly and inefficient industrial policies, China still has “a good amount of fuel left in the tank.”

Rather than stagnating like Japan in the 1990s, panelists agreed China would more closely resemble a “Leninist Germany”—an authoritarian state with a globally competitive, export-driven, tech-intensive economy.

An Enduring Value Proposition for the World, but Pushback is Growing 
Around the world China is embedding itself in local production ecosystems. Several panelists described how Chinese firms have established smartphone assembly plants in Ethiopia, Uganda, Kenya, and Indonesia. EV assembly and battery processing plants have followed, particularly in Zimbabwe and the DRC. In practice, countries receiving China’s investment often express more concern about being left behind by the West than overwhelmed by China.

China’s outbound investment is not just commercial; it is also strategic. As one panelist put it, this “industrial diplomacy” steers capital toward geopolitically friendly or economically useful countries—especially those with preferential trade access to the U.S. or E.U., like Mexico and Morocco—and away from places perceived as hostile, such as India.

This strategy has helped China rebuild global supply chains with itself at the center, creating new production ecosystems around batteries, robotics, AI, and advanced manufacturing. As one expert noted, firms like BYD, Xiaomi, and Huawei are at the core of “interlocking industrial ecosystems” that tie together multiple cutting-edge sectors across borders.

Yet pushback is growing. In 2023, 117 of 198 World Trade Organization complaints against China came from low- and middle-income countries. These nations aren’t rejecting Chinese investment, panelists pointed out—they’re renegotiating harder, hedging more, and believing less.

The conference underscored a world in flux—one where China’s industrial and technological dynamism continues to reshape global supply chains even as its assertive statecraft provokes growing resistance. While some panelists warned of the breakdown of integrationist hopes, others saw opportunity in a more defined and stable strategic rivalry, even if it takes the form of a new cold war. A key takeaway was the paradox of China’s global role: it remains an important source of growth and innovation, yet inspires distrust that is prompting nations to pursue more reciprocal, conditional partnerships. In navigating this uncertain era, both China and the West appear to be groping toward a new equilibrium—messy, complex, and decidedly post-unipolar.

Discover more from the 2025 SCCEI China Conference. 
 

Beijing, May 30, 2024 — Earlier this month, the Stanford Center at Peking University (SCPKU) hosted former Italian Prime Minister Romano Prodi and his former Chief of Staff who delivered his remarks on "The Role of European Variables in U.S.-China-Europe Relations," and engaged in a roundtable discussion with faculty and students from Stanford and Peking University. The event underscored SCPKU's capacity as a catalyst for cross-cultural collaboration and intellectual exchange in advancing global dialogue, bringing together global thought leaders, policymakers, and academic luminaries.

A Confluence of Expertise and Vision

The roundtable centered on ​Romano Prodi, who served as a distinguished professor both before and after his time as Prime Minister, and who to this day prefers the title “professor.”  Prof. Prodi has been hailed as an architect of EU integration and a global advocate for multilateralism. Joining him were ​Dr. Daniele De Giovanni, the Italian Chief of Staff during Prodi's term, and ​Dr. Qinghong Wang, Executive Director of Peking University’s China-Europe Philanthropy Innovation Research Center (CEPIRC). The discussion included contributions from Stanford scholars Professors Andrew Walder, Matthew Kohrman, Xueguang Zhou, and Jean Oi. Professor Oi chaired the session.

SCPKU as a Platform for Global Discourse

18 Stanford undergraduates from the Bing Overseas Study Program China Studies in Beijing program and 20 Peking University students joined the roundtable dialogue, which explored Europe’s strategic influence in bridging transatlantic frameworks. Topics spanned economic interdependence, climate collaboration, and the EU’s evolving role in mitigating great-power competition.

In his opening remarks, ​Prof. Prodi emphasized the urgency of multipolar dialogue. His perspective resonated with SCPKU’s mission to cultivate transnational academic partnerships. The center’s role in hosting such high-level exchanges—spanning academia, governance, and civil society—was lauded as a model for fostering meaningful dialogue in an era of complex geopolitics.

Bridging Scholarship and Policy

The discussion highlighted SCPKU’s commitment to bridging academic scholarship with real-world policy implications. ​Dr. Wang underscored CEPIRC’s work in advancing Sino-European philanthropic innovation, stating, “Our collaboration with Prodi and Stanford underscores the power of interdisciplinary networks to reimagine global solidarity.” Meanwhile, Stanford scholars shared comparative analyses of EU-China-U.S. trade ecosystems and technological interoperability.

About the Stanford Center at Peking University
Located on the Peking University campus in Beijing's vibrant Haidian District, the Stanford Center at Peking University (SCPKU) is a focal point for building academic and educational networks throughout East Asia. The tri-level center offers collaborative spaces, offices, event support services, and funding for innovative research and education. SCPKU brings together established researchers and a new generation of young scholars to create a dynamic hub of intellectual exchange and collaboration.  

Urgent Rethink Needed on U.S-China Trade and Technological Competition
Stein also pushed back against long-held assumptions that the U.S. market alone can dictate global business trends. The notion that “the only market that matters is the U.S. market” no longer holds, noting that Chinese consumers and innovation ecosystems now play a decisive role in shaping product development and global supply chains. He noted that European businesses have expressed a radical shift in strategy, they said, “we've been in China for Asia, in North America, for the Americas…We're now going from that model to what could very well become an, ‘in China for China and the world minus one.’ And the minus one is, of course, the U.S. market.”

On the technology front, he offered a candid evaluation of the U.S.-China competition. Stein reflected on the current state of artificial intelligence in China and the U.S., he said, “ at the end of the day it's not who has the best model; a good enough model is a good enough model, where it really makes a difference is in the application…and I see China racing ahead in the application of AI.” 

Know Your Competitor
Stein concluded with a call for more measured and constructive engagement. He urged both Washington and Beijing to establish clearer rules of the road, maintain open lines of communication, and invest in policy solutions that reduce uncertainty rather than amplify it.

Stein’s keynote offered a business-grounded counterpoint to prevailing narratives of decoupling and confrontation. His insights reinforced the importance of understanding the full complexity of economic interdependence, as well as China’s capacity for global market disruption, and the costs of miscalculation. As part of the broader SCCEI China Conference, his remarks served as a reminder that if America does not properly understand its competitor, efforts to stay ahead may well backfire and erode U.S. strength and global standing. 

A full recording of Sean Stein’s keynote is available on YouTube and below.