link to an article at The Diplomat on Chinese politics in the lead up to next year’s Party congress.
Race to China’s 19th Party Congress
link to an article at The Diplomat on Chinese politics in the lead up to next year’s Party congress.
Race to China’s 19th Party Congress
Where will the vehicle that replaces today’s gasoline/diesel powered automobile come from?
One way to think about this question is to evaluate possible replacement technologies, pick a favorite, and figure out which countries around the world seem to be making the most progress effectively developing the technology. There’s nothing wrong with such an approach. In fact, it seems pretty sensible.
That said, this essay takes a slightly different approach to gaze into the future. Instead of trying to understand specific technologies, this note tries to consider some institutional constraints that may make it more challenging for certain economies to become the location of such dramatic innovation.
What kinds of economies seem like they may be fertile environments for vehicle innovation? What kinds of economies seem less likely to be locations for dramatic vehicle innovation?
This note suggests the following:
(1) economies that are known for being innovative are more likely to be the location of dramatic vehicle innovation than those that are not known for their innovation.
(2) all other things being equal, larger countries are more likely to be the site of a particular innovation than smaller countries.
(3) already having some vehicle production in the country is a plus, because the advantage of having some familiarity with the non-engine aspects of vehicles outweighs the potential disadvantage of having current producers slow down the adoption of a new vehicle platform.
(4) having some degree of a car culture is helpful
(5) to the degree that the development of a new vehicle to replace current gasoline/diesel powered automobiles requires a concerted national effort, then countries that have no oil production are less likely to be conflicted (and so, more likely to be the site of such vehicle innovation) than those that are oil producers.
If one is willing, at least for a moment, to entertain the above notions, what countries look most promising?
To answer this question, it is helpful to have some data. This note considers the five points above as follows:
To measure a country’s general degree of innovativeness (point #1), this essay uses the World Economic Forum’s innovation index as found in its 2015-2016 Global Competitiveness Report.
To measure a country’s size (point #2), this essay uses July 2015 population estimates from the World Factbook.
To determine the amount of vehicle production in a country (point #3), this essay uses 2015 statistics from OICA (the Organisation Internationale des Constructeurs d’Automobiles).
To proxy the depth of a country’s car culture (point #4), this essay looks at the number of motor vehicles per 1000 people in different countries around the world based on data found in the Wikipedia entry “List of countries by vehicles per capita”, much of which appears to come from 2010-2011 World Bank data.
To determine the relative importance of oil production to a country (point #5), this essay looks at the ratio of a country’s production of crude oil, NGPL (natural gas plant liquids), and other liquids divided by its total petroleum consumption based on 2013 data from the U.S. Energy Information Agency (EIA).
Looking at the twenty most innovative countries in the world as per the Global Competitiveness Report along with all major vehicle producing countries (those producing at least a million vehicles in 2015), we find the following (please see Table 1. Country Information).
Using the criteria noted above, the most promising locations for the development of a vehicle that will replace today’s gasoline/diesel powered automobiles appear to be Japan and Germany. After that, France and South Korea also look like possibilities.
Japan and Germany are both innovative (the 5th and 6th most innovative economies in the world according to the WEF’s Global Competitiveness Report), large (populations of more than 120 million and 80 million respectively), are already substantial vehicle producers (having made over 9 million and 6 million vehicles respectively in 2015), have reasonable consumer appreciation for cars (roughly 588 motor vehicles per 1000 individuals), and very modest oil production (0.4% and 4.1% of total petroleum consumption respectively).
France and South Korea are similar in many respects, just not as large (with populations of 66 million and 49 million respectively) and perhaps not quite as innovative (the 18th and 19th most innovative economies). They also produce fewer vehicles (1.97 million and 4.56 million vehicles respectively) and have slightly lower vehicle densities (578 and 450 vehicles per 1000 individuals). That said, oil production is similarly modest (with domestic production meeting 1.5% of France’s total consumption and 0.9% of South Korea’s total consumption).
While Switzerland is ranked as the world’s most innovative country, it is ultimately small (population of only 8 million) and does not produce motor vehicles. Israel (the Global Competitiveness Report’s 3rd most innovative economy) shares a similar profile.
Now, if it turns out that the existence of a sizable domestic motor vehicle industry is, in fact, a hindrance to developing a replacement for today’s vehicles, then Switzerland and Israel look pretty good (as long as size is not so important). That said, if the truth is somewhere in between (i.e. it’s helpful to have some motor vehicle production, as long as the domestic industry is not too big), then Finland may be a reasonable bet (2nd most innovative economy, 69,000 vehicles produced in 2015, population of 5.4 million), or if Finland is just too small, then perhaps the Netherlands (8th most innovative country, 44,000 vehicles produced in 2015, population of 16.9 million) or Taiwan (11th most innovative country, 351,000 vehicles produced, population of 23.4 million).
While, in many ways, the United States (4th most innovative country, population of more than 320 million, more than 12 million vehicles produced in 2015, roughly 809 motor vehicles per 1000 individuals) looks at least as promising as Germany or Japan – in fact its scores on all of the measures just noted are higher than those of both Germany and Japan – the United States has a potential problem in terms of unity of effort. If the development of a replacement for today’s gasoline/diesel powered vehicles requires a concerted national effort, then the existence of a pretty substantial domestic oil industry (in 2013, domestic production represented about 59% of total consumption) may present a challenge.
That said, one shouldn’t count the U.S. out. There is a lot of wealth in the United States, and if a solution is amenable to individual effort and all that is needed is an eccentric billionaire with a vision, then the U.S. may just be the site of such innovation. Heck, if Elon Musk is right, the future may already be here.
On January 16th, 2016, voters across Taiwan went to the polls to elect a new President, and by the end, the Democratic Progressive Party’s candidate, Tsai Ing-wen, had emerged victorious, capturing over 56% of the vote (Eric Chu, the Kuomintang’s candidate, came in second with 31% of the vote). On that day, voters also elected a new legislature, and for the first time ever, the Democratic Progressive Party (DPP) also obtained a majority of seats there as well (68 out of 113).
With the election having been nearly two months ago, this may seem like an odd time to be writing about Taiwanese politics. That said, by a quirk in Taiwan’s political calendar, Tsai Ing-wen will not take over as President until May 20th (in contrast, the new legislature was sworn in on February 1st). Politically speaking, then, we appear to be in a period of unusual calm (where Ma Ying-jeou, Taiwan’s incumbent President, has almost no mandate to act, while Tsai Ing-wen, Taiwan’s President-elect, has no ability to do). As a period of calmness can often be a good environment for reflection, it seems like this then may be a good time to consider Taiwan and its political development.
In thinking about Taiwan, a prominent notion has been that of a Taiwan miracle. For many, the Taiwan miracle consists of two parts, an economic miracle and a political miracle. The economic aspect of Taiwan’s miracle is often understood in terms of “growth with equity.” Not only has Taiwan’s economy seen a sustained period of fast growth over multiple decades, but the economy has grown without seeing a substantial uptick in economic inequality. On the political side, Taiwan has undergone a remarkably peaceful transition from what was essentially an authoritarian, one party dictatorship to a vibrant multiparty democracy.
Over the years, there has been no shortage of those proclaiming a Taiwanese miracle in political and economic spheres (Fei, Ranis, and Kuo, 1979; Kuo, Ranis, and Fei, 1981; Gold, 1986; Copper, 1997), and on the political side, we can find something distinctive about nearly every presidential election in Taiwan since the island’s first direct, popular election in 1996.
Not only was the 1996 election the first, but Lee’s win was also the most lopsided to date (the gap between Lee and Peng Ming-min, the next largest vote getter, was over 32 percentage points). His victory was also the most broad based (he won 24 of 25 regions).
While voter turnout was good in 1996 (76% voter turnout rate), it was even better in the 2000 election (voter turnout rate of 82.7%), with the 2000 number seemingly representing a high water mark for voter turnout for Taiwanese elections. Similarly, if the 1996 election represents Taiwan’s most lopsided presidential election, the 2004 election represents Taiwan’s closest presidential election to date, with just 29,000 votes (about 0.2 percentage points) separating the winner and runner up.
In comparison, the 2008 election presents a stark contrast to the 2004 event. In 2008, not only did KMT candidate Ma Ying-jeou receive more votes (7,659,014) than any other candidate before or since, he also received the highest percentage of votes (58.4%) of any candidate ever.
Relative to that, the 2012 election was a somewhat sedate affair, most notable perhaps in that it represented the worst showing by third parties in any election in which there were candidates from more than two parties running (James Soong received a mere 2.8% of all votes cast). While there have been times when third party candidates have done even worse (e.g. Li Ao and Hsu Hsin-liang in 2000), looking across all elections where voters have had a non-KMT, non-DPP choice, 2012 represents a low mark in the election performance of non-KMT, non-DPP candidates.
Finally, while it is undoubtedly true that Tsai Ing-wen did well in the most recent election – second highest percent of votes received (56.1%), second most broad based victory (18 of 22 regions) – it is also true that, coming in at 66.3%, voter turnout was the lowest to date, continuing a slide that began in 2004 (80.3% voter turnout versus a turnout of 82.7% in 2000) and has yet to reverse itself (turnout was 76.3% in 2008 and 74.4% in 2012 respectively).
Of course, not all significant events in a country’s democratic evolution are observable in election results. The founding of the DPP on September 28, 1986, and Chiang Ching-kuo’s willingness to let it persist, the rise of Lee Teng-hui as leader of country and Kuomintang (KMT) after the death of Chiang Ching-kuo – none of these events were related to broad based elections, but they were fundamental to Taiwan’s political development.
That being said, several elections do seem to have served as markers of Taiwan’s political maturity. In particular, as the first direct election of a President, Lee Teng-hui’s victory in Taiwan’s 1996 election was a watershed moment. Similarly, in bringing an opposition candidate in as President for the first time, Chen Shui-bian’s victory in 2000 was also notable.
Of course, it has been said that all good things must come to an end. With many of the conditions that gave rise to Taiwan’s economic miracle having played themselves out and Taiwan’s economic growth having become increasingly erratic, use of the miracle narrative for understanding Taiwan’s economic circumstances today is misleading.
It is therefore tempting – from the perspective of symmetry, if nothing else – to want to call an end to Taiwan’s political miracle as well (or, if that seems too severe, then to decide that, with Taiwan’s political system having arrived, there is nothing more to observe – “Yes, it’s a democracy. Nothing to see here. Move along…”) On top of that, with the Taiwan miracle having been proclaimed so often, there seems to be little force in announcing it once again.
When the traditional ruling party of a country finds itself completely out of power and wandering in the wilderness, yet still manages to conduct itself with grace and dignity, and in so doing, allows the country to prosper – that truly is a miracle! Taiwan’s economic miracle may be over, and as a result, Taiwan may have to grope forward into an uncertain future just as most other developed economies do. Taiwan’s political miracle, however, is about to enter a new phase. There is no guarantee that all will go smoothly, but still, we can hope. The miracle is over. Long live the miracle!
Copper, John Franklin (1997) The Taiwan political miracle: essays on political development, elections, and foreign relations. Lanham: East Asia Research Institute, University Press of America.
Fei, John C. H., Gustav Ranis, and Shirley W. Y. Kuo. (1979) Growth with Equity: The Taiwan Case. New York: Oxford University Press.
Gold, Thomas B. (1986) State and Society in the Taiwan Miracle. Armonk, NY: M. E. Sharpe.
Kuo, Shirley W. Y., Gustav Ranis, and John C. H. Fei (1981) The Taiwan Success Story: Rapid Growth with Improved Distribution in the Republic of China, 1952-1979. Boulder, CO: Westview Press.
Contemplating a New Era in Taiwan
On October 14, 2014, I wrote a note considering some developments in Chinese politics that had occurred in the preceding year (since an earlier post on September 26, 2013). This is a continuation of that effort, updating things since the October 2014 post.
In my 2014 post, I suggested that “Xi’s intention to move quickly to consolidate his leadership position seems increasingly clear, and politically, he seems to be operating with an increasingly deft hand.” I also wrote that “with the property sector cooling off and economic growth in the PRC coming in on the low side of expectations, all of Xi’s political skills are likely to be put to the test as economic constraints begin to tighten.” As far as Zhou Yongkang (former Politburo Standing Committee member, PRC security czar, and chairman of CNPC) and Ling Jihua (former director of the General Office of the CCP Central Committee and one of Hu Jintao’s key lieutenants) were concerned, I suggested “official confirmation of Zhou’s dramatic fall seems to be only a matter of timing, and the pieces seem to be falling into place for another run at Ling Jihua.” Finally, I also speculated that “if the two stories [of Xu Caihou, former Poliburo member and vice-chairman of the Central Military Commission, being expelled from the Communist Party and turned over to military prosecutors for a court martial and of Wang Jiankang, Ling Jihua’s broter-in-law, re-emerging in public] represent a slowing of Xi’s efforts to go after Hu and a ratcheting up of pressure on Jiang, that would be news indeed.”
Well, a year later, how do things stand?
The observation that Xi is moving quickly to consolidate his leadership position seems increasingly validated by events over the past year. Whether or not he has operated with a deft hand may be debated, but his anti-corruption efforts have now bagged five “tigers”: Zhou Yongkang (周永康), Ling Jihua (令计划), Xu Caihou (徐才厚), Guo Boxiong (郭伯雄), and Su Rong (苏荣) – not an insignificant haul.
As evidenced by recent declines in PRC equity markets and the dollar value of the yuan, China’s economy also seems increasingly constrained. For the majority of July, 2014, the Shanghai Composite Index was running around 2,000. By the end of the year, it was 50% higher, and on June 5, 2015, it passed 5,000. A couple days later, the market did a quick U-turn, and by the end of the summer, it had lost roughly 2,000 points (equal to a decline of 40% from its high). After treading water for much of the fall, the beginning of 2016 has also been dismal, with the market having fallen from roughly 3,500 to 2,700 over the course of the first month of the year. While the dollar value of the renminbi has been more stable, the trend there has also been down. On July 30th, 2015, the RMB fell 1.85% against the U.S. dollar, and over a three day period between August 10th and August 13th, the renminbi fell another 3%. All told, between May 17th, 2015, and January 31st, 2016, the RMB has fallen about 8% against the USD.
As far as Zhou Yongkang is concerned, on December 5, 2014, it was officially announced that Zhou Yongkang had been expelled from the Communist Party and arrested (BBC, 12/06/2014). On April 3, 2015, he was charged with bribery, abuse of power and intentional disclosure of state secrets (Xinhua, 04/03/2015). On June 11, 2015, it was announced that Zhou had been found guilty of all three charges, receiving life imprisonment for bribery, seven years for abusing power, and four years for deliberately revealing state secrets (CNN, 06/11/2015).
As for Ling Jihua, it was officially announced that he had been placed under investigation by the party’s anti-graft unit on December 22, 2014 (BBC, 12/22/2014), and on December 31, 2014, it was reported that Ling Jihua had been dismissed as head of the United Front Work Department (Bloomberg, 12/31/2014). Subsequently, it was reported that, on July 20, 2015, Ling had been expelled from the Communist party and would likely be prosecuted for criminal charges (Xinhua, 07/20/2015).
In short, nearly all observations in the post seem to have been bolstered by events of the past year.
The one red herring may have been the conjecture that reports regarding Wang Jiankang and Xu Caihou represented a slowing of efforts to go after Hu and a ratcheting up of pressure on Jiang. In August, 2015, Ling Zhengce, elder brother of Ling Jihua, was expelled from the CCP, paving the way for his prosecution (VoA, 08/21/2015). In addition, in September, 2015, it was reported that Wang Jiankang, Ling Jihua’s brother-in-law, had been removed as deputy mayor of Yuncheng in Shanxi Province (Reuters, 09/15/2015). On top of this, while a February 25th, 2015, article criticizing the evil deeds of Prince Qing (慶親王), a Qing dynasty noble, was interpreted by some as an attack on Jiang Zemin by way of Zeng Qinghong, one of Jiang’s close allies in the 1990s (Financial Times, 02/26/2015), according to Willy Lam at the Jamestown Foundation, nothing seems to have come of this.
All that being said, on April 9, 2015, information that Guo Boxiong had been placed under investigation was disseminated (SCMP, 04/20/2015), and on July 30, 2015, he was expelled from the CCP and his case moved to military prosecutors for processing (Xinhua, 07/30/2015). With two previous vice chairmen of the CMC (Xu Caihou and Guo Boxiong) having now been put on ice – both of whom received promotions under Jiang – one might see this as a real attack on the former leader (Bo Zhiye, The Diplomat, 07/31/2015). Then again, they were also promoted under Hu, and according to Alice Miller, determining the ultimate loyalty of PLA leaders cannot be ascertained merely from a simple analysis of military promotions.
Overall, events of the past year seem to indicate continuing pressure on both Jiang and Hu. Of course, given that planning for the 19th Party Congress in 2017 appears to have begun, Lam suggests we may well see a moratorium on corruption investigations against China’s top leaders (“tigers”) in order to assure a relatively smooth period of pre-Congress planning and political horse-trading. Looking over the past year, only one thing seems clear – Chinese politics is rarely boring.
Chinese Politics: A Review