{"title":"Japan Center for Economic Research","authors":"","doi":"10.1111/aepr.12460","DOIUrl":"https://doi.org/10.1111/aepr.12460","url":null,"abstract":"","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 1","pages":"152"},"PeriodicalIF":3.9,"publicationDate":"2024-01-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12460","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139473916","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>Meltzer (<span>2024</span>) discusses the key challenges and risks of artificial intelligence (AI)/ChatGPT, as well as the role of international trade agreements and other economic fora in addressing them. Meltzer also argues that the less formalized grouping such as the US-EU Trade and Technology Council (TTC), the Indo-Pacific Economic Framework for Prosperity (IPEF), and the Quad can do a better job in this, than traditional trade negotiating agreements.</p><p>I have three comments, each from trade policy, Schumpeterian, and geopolitics perspective, respectively.</p><p>First, Meltzer points out that IPEF and US-EU TTC are not for trade negotiations but for aligning approaches to technological issues involving opportunities and challenges of emerging technologies. For instance, IPEF addresses cooperation on regulation and standards related to AI, whereas the TTC discusses trustworthy and innovative AI as its key priority. This is an important interpretation, given the existing criticism that IPEF does not offer any new (US) market access to member economies, and so its impact will be limited. However, it makes sense for the USA as it now perceives free trade agreements (FTA) having benefited not the USA but China. Whereas FTA have resulted in losses of manufacturing jobs in the USA, IPEF might not do so but rather contribute to securing future high-tech markets and global value chains (GVC).</p><p>Second, a Schumpeterian comment is about ChatGPT (generative pre-trained transformers), which is pointed out as GPT (general purpose technologies). Meltzer discusses the results of an interesting research that with the spread of ChatGPT, global gross domestic product (GDP) may increase by 14% by 2030, creating additional incomes of $US 16 trillion. Such positive impacts are possible because many job tasks can be finished faster with the same quality. In the literature, GPT are defined as technologies that are pervasive, exhibit strong complementary abilities, and thus can be used in a multitude of applications (Bresnahan & Trajtenberg, <span>1995</span>). Some argue that the 4th Industrial Revolution (4IR) technologies might be GPT given their transformative potential involving digitization and automation. A similar term in Schumpeterian economics is “key factor inputs” which exhibit low and falling relative costs, with availability of supply over long periods and the potential for the use or incorporation in various products and processes throughout the economic system. Such inputs, once they appear, may correspond to a techno-economic paradigm shift (Dosi, <span>1982</span>) and thus bring in a new long wave of boom in economies. Examples of key factor inputs were microelectronics since 1970, or electricity in the 20th century.</p><p>There are ways to verify whether or not some technologies are GPT. Lee and Lee (<span>2021</span>) use three criteria: (i) “generality” (e.g. technologies with wider applications and impacts and thus cited widely
此外，还可能争夺第三市场，例如非洲或中东市场。
{"title":"Comment on “The Impact of Foundational AI on International Trade, Services and Supply Chains in Asia”","authors":"Keun Lee","doi":"10.1111/aepr.12455","DOIUrl":"10.1111/aepr.12455","url":null,"abstract":"<p>Meltzer (<span>2024</span>) discusses the key challenges and risks of artificial intelligence (AI)/ChatGPT, as well as the role of international trade agreements and other economic fora in addressing them. Meltzer also argues that the less formalized grouping such as the US-EU Trade and Technology Council (TTC), the Indo-Pacific Economic Framework for Prosperity (IPEF), and the Quad can do a better job in this, than traditional trade negotiating agreements.</p><p>I have three comments, each from trade policy, Schumpeterian, and geopolitics perspective, respectively.</p><p>First, Meltzer points out that IPEF and US-EU TTC are not for trade negotiations but for aligning approaches to technological issues involving opportunities and challenges of emerging technologies. For instance, IPEF addresses cooperation on regulation and standards related to AI, whereas the TTC discusses trustworthy and innovative AI as its key priority. This is an important interpretation, given the existing criticism that IPEF does not offer any new (US) market access to member economies, and so its impact will be limited. However, it makes sense for the USA as it now perceives free trade agreements (FTA) having benefited not the USA but China. Whereas FTA have resulted in losses of manufacturing jobs in the USA, IPEF might not do so but rather contribute to securing future high-tech markets and global value chains (GVC).</p><p>Second, a Schumpeterian comment is about ChatGPT (generative pre-trained transformers), which is pointed out as GPT (general purpose technologies). Meltzer discusses the results of an interesting research that with the spread of ChatGPT, global gross domestic product (GDP) may increase by 14% by 2030, creating additional incomes of $US 16 trillion. Such positive impacts are possible because many job tasks can be finished faster with the same quality. In the literature, GPT are defined as technologies that are pervasive, exhibit strong complementary abilities, and thus can be used in a multitude of applications (Bresnahan & Trajtenberg, <span>1995</span>). Some argue that the 4th Industrial Revolution (4IR) technologies might be GPT given their transformative potential involving digitization and automation. A similar term in Schumpeterian economics is “key factor inputs” which exhibit low and falling relative costs, with availability of supply over long periods and the potential for the use or incorporation in various products and processes throughout the economic system. Such inputs, once they appear, may correspond to a techno-economic paradigm shift (Dosi, <span>1982</span>) and thus bring in a new long wave of boom in economies. Examples of key factor inputs were microelectronics since 1970, or electricity in the 20th century.</p><p>There are ways to verify whether or not some technologies are GPT. Lee and Lee (<span>2021</span>) use three criteria: (i) “generality” (e.g. technologies with wider applications and impacts and thus cited widely","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 1","pages":"150-151"},"PeriodicalIF":3.9,"publicationDate":"2023-12-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12455","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139004879","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>Meltzer (<span>2024</span>) does an admirable job of mapping recent technological developments in AI to the current institutions of the international trading system. This is a useful taxonomy.</p><p>I raise two concerns. First, AI's net effects on employment and output are inextricably linked to the pace of AI's adoption by industry. Meltzer notes that recent leaps in the capabilities of AI models have been accompanied by exponential increases for the “AI compute” needed to train these models. However, it is still very uncertain whether the cost of AI compute in the twenty-first century is going to decline over time at a rate resembling that of general-purpose computing in the twentieth century, and, therefore, whether twenty-first century AI comes into widespread industrial use quickly.</p><p>In the twentieth century, “Moore's Law” was code for a cadence of technological innovation in semiconductors that produced 20% to 30% annual declines in (quality-adjusted) computer hardware cost, and impressive declines in the energy needed for computing, lasting decades. Continuing price declines for computing created economic incentives to use computing in all kinds of new applications, across all sectors of the economy, substituting for labor, other forms of capital, and raw materials, and increasing productivity and living standards. (Jorgenson, <span>2001</span>).</p><p>By the second decade of the twenty-first century, however, while some Moore's Law-style miniaturization of semiconductors continued at a slower pace, quality-adjusted semiconductor prices were no longer falling at earlier double-digit rates. (Flamm, <span>2017</span>, <span>2021</span>; Sawyer & So, <span>2018</span>) Slackening technological improvement in chip manufacturing means that some new engine is needed to drive AI compute costs lower. Absent steady declines in AI compute costs, a rapid uptake of AI across broad sectors of the economy is unlikely to materialize.</p><p>Second, national security is tightly linked to AI, and, therefore, likely to drive national policies and investments relevant to cutting edge AI technology. This was the case when military investments first kickstarted the computer and semiconductor industries seventy-five years ago (Flamm, <span>1987</span>). Militaries the world over are currently investigating incorporation of AI into autonomous military weapons systems platforms, and into security and disinformation systems that conduct information warfare operations in cyberspace. Use of the most advanced available semiconductor manufacturing technology is required to produce specialized AI compute capability in its fastest, densest (lowest weight and smallest size), and least energy intensive form factor, which translates into greater potential capability for a “smart” weapons system or an edge-connected network device, for any given weight, energy, and size budget.</p><p>As a result, responding to rising global political tensions and following the US
{"title":"Comment on “The Impact of Foundational AI on International Trade, Services and Supply Chains in Asia”","authors":"Kenneth Flamm","doi":"10.1111/aepr.12456","DOIUrl":"10.1111/aepr.12456","url":null,"abstract":"<p>Meltzer (<span>2024</span>) does an admirable job of mapping recent technological developments in AI to the current institutions of the international trading system. This is a useful taxonomy.</p><p>I raise two concerns. First, AI's net effects on employment and output are inextricably linked to the pace of AI's adoption by industry. Meltzer notes that recent leaps in the capabilities of AI models have been accompanied by exponential increases for the “AI compute” needed to train these models. However, it is still very uncertain whether the cost of AI compute in the twenty-first century is going to decline over time at a rate resembling that of general-purpose computing in the twentieth century, and, therefore, whether twenty-first century AI comes into widespread industrial use quickly.</p><p>In the twentieth century, “Moore's Law” was code for a cadence of technological innovation in semiconductors that produced 20% to 30% annual declines in (quality-adjusted) computer hardware cost, and impressive declines in the energy needed for computing, lasting decades. Continuing price declines for computing created economic incentives to use computing in all kinds of new applications, across all sectors of the economy, substituting for labor, other forms of capital, and raw materials, and increasing productivity and living standards. (Jorgenson, <span>2001</span>).</p><p>By the second decade of the twenty-first century, however, while some Moore's Law-style miniaturization of semiconductors continued at a slower pace, quality-adjusted semiconductor prices were no longer falling at earlier double-digit rates. (Flamm, <span>2017</span>, <span>2021</span>; Sawyer & So, <span>2018</span>) Slackening technological improvement in chip manufacturing means that some new engine is needed to drive AI compute costs lower. Absent steady declines in AI compute costs, a rapid uptake of AI across broad sectors of the economy is unlikely to materialize.</p><p>Second, national security is tightly linked to AI, and, therefore, likely to drive national policies and investments relevant to cutting edge AI technology. This was the case when military investments first kickstarted the computer and semiconductor industries seventy-five years ago (Flamm, <span>1987</span>). Militaries the world over are currently investigating incorporation of AI into autonomous military weapons systems platforms, and into security and disinformation systems that conduct information warfare operations in cyberspace. Use of the most advanced available semiconductor manufacturing technology is required to produce specialized AI compute capability in its fastest, densest (lowest weight and smallest size), and least energy intensive form factor, which translates into greater potential capability for a “smart” weapons system or an edge-connected network device, for any given weight, energy, and size budget.</p><p>As a result, responding to rising global political tensions and following the US","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 1","pages":"148-149"},"PeriodicalIF":3.9,"publicationDate":"2023-12-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12456","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138599100","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>Arimura and Sugino (<span>2024</span>) explain well how the volatility and high prices of fossil fuels due to the Russian invasion of Ukraine have caused a global crisis. In fact, Dr. Fatih Birol, Executive Director of the International Energy Agency (IEA) called it “the first truly global energy crisis”. Energy security is the first priority for many if not all governments. Responses to this crisis by REPower EU as well as the US Inflation Reduction Act accelerate the decarbonization of industries everywhere. The EU's Carbon Border Adjustment Mechanism (CBAM) and the US decouple-China policy further complicate the situation. In this crisis, there are winners and losers: the EU and US are winners. China can be a renewable energy superpower, while India may increase its wind and solar dependency. Saudi Arabia may avoid stranded-assetization of its natural resources by using carbon capture and storage (CCS) to export blue hydrogen. Russia is the least prepared because of a lack of technology transfers due to sanctions, investment withdrawals, the increase of war expenses, and a brain drain. Can the ASEAN countries become winners? What about Japan and Korea?</p><p>For ASEAN countries, the key issue is if they can secure affordable finance for transition. As Arimura and Sugino say, natural gas has an important transitional role in replacing coal but its high and volatile prices due to geopolitical reasons may jeopardize a smooth transition. Japan has introduced the Asian Energy Transition Initiative with JPY 2 trillion, but international financial institutions must put more money into natural gas development to facilitate the transition. To provide a clear advantage for gas over coal, carbon pricing is essential. ASEAN countries must be prepared to introduce a region-wide carbon pricing mechanism as the EU has done with its emissions trading system (ETS). To phase out coal gradually, co-firing clean ammonia or hydrogen is a practical approach. Technology transfers and supply chain development for green/blue hydrogen and ammonia with CCS are needed.</p><p>The challenge for global carbon neutrality is providing affordable financing to developing countries. Renewable energy costs will decline further but its deployment needs investment. Inter-regional grid connection should be seriously considered for ASEAN countries which facilitates an expansion in the use of renewables while increasing energy security. The Joint Crediting Mechanism (JCM) is a useful tool to increase investment. There are gaps in regional CO<sub>2</sub> prices, high in the North and low in the South, which could facilitate carbon credit transfer from the South in return for investment from the North. A global framework for carbon credit trading is needed.</p><p>Another group of winners is the Megatech firms. Apple, for example, will force its whole supply chain to be carbon neutral by 2030. Device providers to Apple must consider relocating their production operations to low-carbon
{"title":"Comment on “Implications of Deglobalization on Energy and Carbon Neutrality in Asia and the Pacific Region”","authors":"Nobuo Tanaka","doi":"10.1111/aepr.12454","DOIUrl":"10.1111/aepr.12454","url":null,"abstract":"<p>Arimura and Sugino (<span>2024</span>) explain well how the volatility and high prices of fossil fuels due to the Russian invasion of Ukraine have caused a global crisis. In fact, Dr. Fatih Birol, Executive Director of the International Energy Agency (IEA) called it “the first truly global energy crisis”. Energy security is the first priority for many if not all governments. Responses to this crisis by REPower EU as well as the US Inflation Reduction Act accelerate the decarbonization of industries everywhere. The EU's Carbon Border Adjustment Mechanism (CBAM) and the US decouple-China policy further complicate the situation. In this crisis, there are winners and losers: the EU and US are winners. China can be a renewable energy superpower, while India may increase its wind and solar dependency. Saudi Arabia may avoid stranded-assetization of its natural resources by using carbon capture and storage (CCS) to export blue hydrogen. Russia is the least prepared because of a lack of technology transfers due to sanctions, investment withdrawals, the increase of war expenses, and a brain drain. Can the ASEAN countries become winners? What about Japan and Korea?</p><p>For ASEAN countries, the key issue is if they can secure affordable finance for transition. As Arimura and Sugino say, natural gas has an important transitional role in replacing coal but its high and volatile prices due to geopolitical reasons may jeopardize a smooth transition. Japan has introduced the Asian Energy Transition Initiative with JPY 2 trillion, but international financial institutions must put more money into natural gas development to facilitate the transition. To provide a clear advantage for gas over coal, carbon pricing is essential. ASEAN countries must be prepared to introduce a region-wide carbon pricing mechanism as the EU has done with its emissions trading system (ETS). To phase out coal gradually, co-firing clean ammonia or hydrogen is a practical approach. Technology transfers and supply chain development for green/blue hydrogen and ammonia with CCS are needed.</p><p>The challenge for global carbon neutrality is providing affordable financing to developing countries. Renewable energy costs will decline further but its deployment needs investment. Inter-regional grid connection should be seriously considered for ASEAN countries which facilitates an expansion in the use of renewables while increasing energy security. The Joint Crediting Mechanism (JCM) is a useful tool to increase investment. There are gaps in regional CO<sub>2</sub> prices, high in the North and low in the South, which could facilitate carbon credit transfer from the South in return for investment from the North. A global framework for carbon credit trading is needed.</p><p>Another group of winners is the Megatech firms. Apple, for example, will force its whole supply chain to be carbon neutral by 2030. Device providers to Apple must consider relocating their production operations to low-carbon","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 1","pages":"127-128"},"PeriodicalIF":3.9,"publicationDate":"2023-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12454","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139258755","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Foundational artificial intelligence (AI) is a general purpose technology that will affect economic activity across industries, with potentially significant impacts on jobs and international trade. This could include automation of routine and nonroutine white-collar jobs, which reduces international trade where these jobs are on-shored. However, where AI compliments existing jobs and leads to higher productivity, this could open up new opportunities for international trade in services. How foundational AI affects international trade will also depend on how it is regulated. Governments are moving to regulate AI, which could become a barrier to international trade. Geopolitics could also undermine opportunities for AI to deepen globalization and trade in AI as the USA and China restrict trade in the technology needed to build and run foundational AI systems. Regulating the impact of AI on international trade is an increasing focus in free trade agreements (FTAs) and digital economy agreements (DEAs). The World Trade Organization (WTO) Joint Statement Initiative (JSI) e-commerce negotiations could also support trade in AI. Yet, there is much more that trade policy could do to minimize barriers to trade in AI.
{"title":"The Impact of Foundational AI on International Trade, Services and Supply Chains in Asia","authors":"Joshua P. Meltzer","doi":"10.1111/aepr.12451","DOIUrl":"10.1111/aepr.12451","url":null,"abstract":"<div>\u0000 \u0000 <p>Foundational artificial intelligence (AI) is a general purpose technology that will affect economic activity across industries, with potentially significant impacts on jobs and international trade. This could include automation of routine and nonroutine white-collar jobs, which reduces international trade where these jobs are on-shored. However, where AI compliments existing jobs and leads to higher productivity, this could open up new opportunities for international trade in services. How foundational AI affects international trade will also depend on how it is regulated. Governments are moving to regulate AI, which could become a barrier to international trade. Geopolitics could also undermine opportunities for AI to deepen globalization and trade in AI as the USA and China restrict trade in the technology needed to build and run foundational AI systems. Regulating the impact of AI on international trade is an increasing focus in free trade agreements (FTAs) and digital economy agreements (DEAs). The World Trade Organization (WTO) Joint Statement Initiative (JSI) e-commerce negotiations could also support trade in AI. Yet, there is much more that trade policy could do to minimize barriers to trade in AI.</p>\u0000 </div>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 1","pages":"129-147"},"PeriodicalIF":3.9,"publicationDate":"2023-11-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135725929","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>The international monetary system crossed an important turning point at the end of February 2022, as the USA and its allies imposed financial sanctions on Russia. The greatest controversy was not whether the sanctions were right or wrong in a geopolitical sense, but what does weaponization of the US dollar mean for international monetary system. When China and the USA were in the middle of the trade war, many Chinese investors worried that the US government might freeze or even forfeit China's investments in the US treasury markets. My assessment then was that this was highly unlikely, as it could backfire on the USA by significantly weakening the role of the US dollar. The freezing of Russia's foreign exchange reserves by the USA and its allies in early 2022 suggest that my earlier assessment was incorrect.</p><p>But as Eichengreen (<span>2024</span>) argues, there is no credible alternative to the existing system in the perceivable future. Regardless, the US dollar will remain as the most important global reserve currency.</p><p>However, important changes have already taken place. For more than half a century, the US dollar has been the global reserve currency. After China started its reform and open-door policy in 1978, it immediately participated in the international division of labor. And for much of the past four decades, exports and foreign direct investment (FDI) have been two important driving forces for China's rapid economic growth. In that globalized world, the US dollar was the global financial public good. Questions about the international roles of the US dollar were raised after the 2008 global financial crisis (Zhou, <span>2009</span>). The main concern then was that a sovereign currency, that is, the US dollar, serving as the global reserve currency is unsustainable in the long run. This concern was later compounded by the huge spillover effects of the Federal Reserve Bank's monetary policy easing and tightening on other countries.</p><p>But now the worries have been escalated to new levels, as the risk premiums on using the US dollar in international financial transactions by other countries are much higher. Although most countries will probably not be directly targeted by such financial sanctions, they could still be caught in the middle when such an unfortunate event happens, especially when the two sides of the conflict are, respectively, the number one and the number two economies of the world. This is probably why many countries, especially developing countries, have been exploring alternative means of payments, units of accounting, and vehicles for investment since early last year.</p><p>The real question is not whether the US dollar as the global reserve currency will come to an end. The answer is clear negative. Eichengreen (<span>2024</span>) paints two scenarios for the international monetary system, one the status quo and the other financial rupture, built on different trajectories of the geopolitical tensions betw
{"title":"Comment on “International Finance and Geopolitics”","authors":"Yiping Huang","doi":"10.1111/aepr.12452","DOIUrl":"10.1111/aepr.12452","url":null,"abstract":"<p>The international monetary system crossed an important turning point at the end of February 2022, as the USA and its allies imposed financial sanctions on Russia. The greatest controversy was not whether the sanctions were right or wrong in a geopolitical sense, but what does weaponization of the US dollar mean for international monetary system. When China and the USA were in the middle of the trade war, many Chinese investors worried that the US government might freeze or even forfeit China's investments in the US treasury markets. My assessment then was that this was highly unlikely, as it could backfire on the USA by significantly weakening the role of the US dollar. The freezing of Russia's foreign exchange reserves by the USA and its allies in early 2022 suggest that my earlier assessment was incorrect.</p><p>But as Eichengreen (<span>2024</span>) argues, there is no credible alternative to the existing system in the perceivable future. Regardless, the US dollar will remain as the most important global reserve currency.</p><p>However, important changes have already taken place. For more than half a century, the US dollar has been the global reserve currency. After China started its reform and open-door policy in 1978, it immediately participated in the international division of labor. And for much of the past four decades, exports and foreign direct investment (FDI) have been two important driving forces for China's rapid economic growth. In that globalized world, the US dollar was the global financial public good. Questions about the international roles of the US dollar were raised after the 2008 global financial crisis (Zhou, <span>2009</span>). The main concern then was that a sovereign currency, that is, the US dollar, serving as the global reserve currency is unsustainable in the long run. This concern was later compounded by the huge spillover effects of the Federal Reserve Bank's monetary policy easing and tightening on other countries.</p><p>But now the worries have been escalated to new levels, as the risk premiums on using the US dollar in international financial transactions by other countries are much higher. Although most countries will probably not be directly targeted by such financial sanctions, they could still be caught in the middle when such an unfortunate event happens, especially when the two sides of the conflict are, respectively, the number one and the number two economies of the world. This is probably why many countries, especially developing countries, have been exploring alternative means of payments, units of accounting, and vehicles for investment since early last year.</p><p>The real question is not whether the US dollar as the global reserve currency will come to an end. The answer is clear negative. Eichengreen (<span>2024</span>) paints two scenarios for the international monetary system, one the status quo and the other financial rupture, built on different trajectories of the geopolitical tensions betw","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 1","pages":"103-104"},"PeriodicalIF":3.9,"publicationDate":"2023-10-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12452","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136317569","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>The Chinese Yuan (RMB) has emerged as a potentially serious challenger to the US Dollar as a reserve currency in the international monetary system. Although the status of the RMB as an international currency currently is much lower on every measure than the $US, the recent upward trend in the cross-border and offshore usage of the RMB is remarkable. Eichengreen (<span>2024</span>) presents two scenarios going forward: First, the status-quo scenario. The US and China continue to trade, despite high tariffs, high tech exports control, and other measures, with China maintaining retaliatory tariffs and other actions. The second scenario is that economic and financial ties are ruptured. This scenario may occur when the US determines China is aiding Russia militarily or when China invades Taiwan.</p><p>I have three comments: First, why China is pursuing RMB internationalization, and since when; second, whether there may be a third scenario between the status quo and rupture; and third, the Russian invasion and the western sanctions on Russia may turn out to be a turning point to accelerate RMB internationalization.</p><p>First, I would date the starting point in the process of the RMB internationalization at the 2008–2009 global financial crisis. China carefully observed collapses of large financial institutions in the United States and in Europe. The Federal Reserve had to provide $US liquidity quickly to the rest of the world using central bank bilateral swaps. China must have concluded that the US financial system was not a model to follow and having the $US as the sole international reserve currency was dangerous for China and the rest of the world.</p><p>In 2009, then Governor of the People's Bank of China (PBOC), Xiaochuan Zhou, wrote an essay entitled “Reform the international monetary system” (Zhou, <span>2009</span>), in which he argued that when a national currency plays the role of an international reserve currency, domestic considerations and constraints at times make it difficult to provide liquidity to the international monetary system when needed. He went on to propose establishing a super-sovereign reserve currency. Alternatively, he proposed expanding the role of the International Monetary Fund's (IMF's) Special Drawing Rights (SDR) to include payment and settlement of international trade and finance. He also added that “[T]he basket of currencies forming the basis for SDR valuation should be expanded to include currencies of all major economies, and the GDP may also be included as a weight.” This was a thinly veiled demand to include the RMB in the SDR composition, which was realized 7 years later, in 2016.</p><p>In the spring of 2009, the PBOC signed bilateral swap arrangements with Hong Kong, Malaysia, Indonesia, Argentina, and Korea. At the time, this looked like a response to the 2008 crisis, very much in parallel with, if not imitating, the Federal Reserve extending bilateral swaps to many advanced countries, as an expansion o
{"title":"Comment on “International Finance and Geopolitics”","authors":"Takatoshi Ito","doi":"10.1111/aepr.12453","DOIUrl":"10.1111/aepr.12453","url":null,"abstract":"<p>The Chinese Yuan (RMB) has emerged as a potentially serious challenger to the US Dollar as a reserve currency in the international monetary system. Although the status of the RMB as an international currency currently is much lower on every measure than the $US, the recent upward trend in the cross-border and offshore usage of the RMB is remarkable. Eichengreen (<span>2024</span>) presents two scenarios going forward: First, the status-quo scenario. The US and China continue to trade, despite high tariffs, high tech exports control, and other measures, with China maintaining retaliatory tariffs and other actions. The second scenario is that economic and financial ties are ruptured. This scenario may occur when the US determines China is aiding Russia militarily or when China invades Taiwan.</p><p>I have three comments: First, why China is pursuing RMB internationalization, and since when; second, whether there may be a third scenario between the status quo and rupture; and third, the Russian invasion and the western sanctions on Russia may turn out to be a turning point to accelerate RMB internationalization.</p><p>First, I would date the starting point in the process of the RMB internationalization at the 2008–2009 global financial crisis. China carefully observed collapses of large financial institutions in the United States and in Europe. The Federal Reserve had to provide $US liquidity quickly to the rest of the world using central bank bilateral swaps. China must have concluded that the US financial system was not a model to follow and having the $US as the sole international reserve currency was dangerous for China and the rest of the world.</p><p>In 2009, then Governor of the People's Bank of China (PBOC), Xiaochuan Zhou, wrote an essay entitled “Reform the international monetary system” (Zhou, <span>2009</span>), in which he argued that when a national currency plays the role of an international reserve currency, domestic considerations and constraints at times make it difficult to provide liquidity to the international monetary system when needed. He went on to propose establishing a super-sovereign reserve currency. Alternatively, he proposed expanding the role of the International Monetary Fund's (IMF's) Special Drawing Rights (SDR) to include payment and settlement of international trade and finance. He also added that “[T]he basket of currencies forming the basis for SDR valuation should be expanded to include currencies of all major economies, and the GDP may also be included as a weight.” This was a thinly veiled demand to include the RMB in the SDR composition, which was realized 7 years later, in 2016.</p><p>In the spring of 2009, the PBOC signed bilateral swap arrangements with Hong Kong, Malaysia, Indonesia, Argentina, and Korea. At the time, this looked like a response to the 2008 crisis, very much in parallel with, if not imitating, the Federal Reserve extending bilateral swaps to many advanced countries, as an expansion o","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 1","pages":"101-102"},"PeriodicalIF":3.9,"publicationDate":"2023-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12453","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135888021","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Richard Baldwin, Rebecca Freeman, Angelos Theodorakopoulos
This article contests the idea that the world has entered a post-globalization era. It argues that rapid globalization has evolved rather than ended. Even though the global goods trade-to-GDP ratio reached its zenith 15 years ago, the rapid rise of services trade has persisted and now accounts for one-fifth of international commerce. The paper makes a statistical and logical case that the future of trade lies in services trade—especially trade in intermediate services.
{"title":"Deconstructing Deglobalization: The Future of Trade is in Intermediate Services","authors":"Richard Baldwin, Rebecca Freeman, Angelos Theodorakopoulos","doi":"10.1111/aepr.12440","DOIUrl":"10.1111/aepr.12440","url":null,"abstract":"<p>This article contests the idea that the world has entered a post-globalization era. It argues that rapid globalization has evolved rather than ended. Even though the global goods trade-to-GDP ratio reached its zenith 15 years ago, the rapid rise of services trade has persisted and now accounts for one-fifth of international commerce. The paper makes a statistical and logical case that the future of trade lies in services trade—especially trade in intermediate services.</p>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 1","pages":"18-37"},"PeriodicalIF":3.9,"publicationDate":"2023-10-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12440","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136255104","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>Arimura and Sugino (<span>2024</span>) highlight the shock to fossil fuel markets caused by Russia's expanded invasion of Ukraine in 2022 and the Western-led international response. While fossil fuel prices generally soared, some countries including China and India benefited from relatively cheap Russian fuels.</p><p>What happened in 2022 is certainly interesting. Data from the Energy Institute (<span>2023</span>) and BP (<span>2022</span>) suggest that Russian exports of oil, coal, and piped natural gas to the Asia-Pacific increased relative to the prior year, although exports of liquefied natural gas (LNG) fell. Nevertheless, Russia continued to play a relatively modest role in supplying the Asia-Pacific's energy needs, especially for non-oil products. In 2022, Russian exports supplied about 10% of the oil consumed in the Asia-Pacific, 3% of the region's coal use, and 2% of its natural gas use (via a pipeline to China). Russia was only the fifth-largest supplier of LNG to the region, after Australia, Qatar, Malaysia, and the United States (US).</p><p>Russia appears set to increasingly look East for its energy exports, with a new gas pipeline to China as part of the potential mix. Yet most Asia-Pacific countries are unlikely to wish to become overly dependent on Russian energy. The competitive nature of global energy markets, the economic and political benefits of diversification, and constraints on rapid ramp-up of Russian supply are instead likely to mean that Russia remains only one of a number of suppliers to the region. In 2023, fossil fuel prices were also already down from their 2022 levels, reducing the size of the price discounts available from Russia.</p><p>Arimura and Sugino (<span>2024</span>) highlight a division in emission reduction ambition between developed and developing countries. Fortunately, this is one that has generally declined over time, with the Kyoto-era distinction between Annex B countries and others now behind us. One of the major achievements of the Paris Agreement era has been the net zero emission commitments announced by countries from Vietnam (by 2050) to India (2070).</p><p>While energy security concerns spiked in 2022, climate ambition was not cast to the wayside. Indeed, the G20 declarations of 2022 and 2023 included strong climate statements. There has also been ongoing policy momentum, with Singapore announcing it will increase its carbon tax rate from 2024, for example.</p><p>Taking the long view, the energy sector has generally been globalizing over time, with the ratio of energy trade (imports plus exports) to energy use rising for both the world and the Asia-Pacific (IEA, <span>2023</span>). This has been aided by improvements in transport for products such as natural gas, among other factors. In recent developments, there have also been some moves toward cross-border integration. In 2023, China removed its restrictions on Australian coal, for example, while Singapore signed memoranda of understandi
{"title":"Comment on “Implications of Deglobalization on Energy and Carbon Neutrality in Asia and the Pacific Region”","authors":"Paul J. Burke","doi":"10.1111/aepr.12449","DOIUrl":"10.1111/aepr.12449","url":null,"abstract":"<p>Arimura and Sugino (<span>2024</span>) highlight the shock to fossil fuel markets caused by Russia's expanded invasion of Ukraine in 2022 and the Western-led international response. While fossil fuel prices generally soared, some countries including China and India benefited from relatively cheap Russian fuels.</p><p>What happened in 2022 is certainly interesting. Data from the Energy Institute (<span>2023</span>) and BP (<span>2022</span>) suggest that Russian exports of oil, coal, and piped natural gas to the Asia-Pacific increased relative to the prior year, although exports of liquefied natural gas (LNG) fell. Nevertheless, Russia continued to play a relatively modest role in supplying the Asia-Pacific's energy needs, especially for non-oil products. In 2022, Russian exports supplied about 10% of the oil consumed in the Asia-Pacific, 3% of the region's coal use, and 2% of its natural gas use (via a pipeline to China). Russia was only the fifth-largest supplier of LNG to the region, after Australia, Qatar, Malaysia, and the United States (US).</p><p>Russia appears set to increasingly look East for its energy exports, with a new gas pipeline to China as part of the potential mix. Yet most Asia-Pacific countries are unlikely to wish to become overly dependent on Russian energy. The competitive nature of global energy markets, the economic and political benefits of diversification, and constraints on rapid ramp-up of Russian supply are instead likely to mean that Russia remains only one of a number of suppliers to the region. In 2023, fossil fuel prices were also already down from their 2022 levels, reducing the size of the price discounts available from Russia.</p><p>Arimura and Sugino (<span>2024</span>) highlight a division in emission reduction ambition between developed and developing countries. Fortunately, this is one that has generally declined over time, with the Kyoto-era distinction between Annex B countries and others now behind us. One of the major achievements of the Paris Agreement era has been the net zero emission commitments announced by countries from Vietnam (by 2050) to India (2070).</p><p>While energy security concerns spiked in 2022, climate ambition was not cast to the wayside. Indeed, the G20 declarations of 2022 and 2023 included strong climate statements. There has also been ongoing policy momentum, with Singapore announcing it will increase its carbon tax rate from 2024, for example.</p><p>Taking the long view, the energy sector has generally been globalizing over time, with the ratio of energy trade (imports plus exports) to energy use rising for both the world and the Asia-Pacific (IEA, <span>2023</span>). This has been aided by improvements in transport for products such as natural gas, among other factors. In recent developments, there have also been some moves toward cross-border integration. In 2023, China removed its restrictions on Australian coal, for example, while Singapore signed memoranda of understandi","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 1","pages":"125-126"},"PeriodicalIF":3.9,"publicationDate":"2023-10-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12449","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135197480","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The IPCC (Intergovernmental Panel on Climate Change) special report on the impacts of global warming of 1.5°C urged the world to move toward carbon neutrality (CN). Following the announcement by European countries of their CN target by 2050, Japan, South Korea, and the USA announced their CN targets by 2050. However, the Russian invasion of Ukraine has divided the world and drastically changed energy markets, including natural gas. Moreover, the EU is now implementing controversial policies on carbon border adjustment mechanisms which may impose a heavier burden on developing countries. This study discusses how global divisions may influence energy strategies and climate policy for various Asian countries.
{"title":"Implications of Deglobalization on Energy and Carbon Neutrality in Asia and the Pacific Region","authors":"Toshi H. Arimura, Makoto Sugino","doi":"10.1111/aepr.12444","DOIUrl":"10.1111/aepr.12444","url":null,"abstract":"<div>\u0000 \u0000 <p>The IPCC (Intergovernmental Panel on Climate Change) special report on the impacts of global warming of 1.5°C urged the world to move toward carbon neutrality (CN). Following the announcement by European countries of their CN target by 2050, Japan, South Korea, and the USA announced their CN targets by 2050. However, the Russian invasion of Ukraine has divided the world and drastically changed energy markets, including natural gas. Moreover, the EU is now implementing controversial policies on carbon border adjustment mechanisms which may impose a heavier burden on developing countries. This study discusses how global divisions may influence energy strategies and climate policy for various Asian countries.</p>\u0000 </div>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 1","pages":"105-124"},"PeriodicalIF":3.9,"publicationDate":"2023-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135254994","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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