Call for papers: Early career researchers workshop 'From Rising Powers to Interdependent Futures', 21 June 2017, Manchester

The emergent economies, most notably China, India, Brazil, South Africa, and Russia are no longer ‘emergent’. They are at the centre of the global stage. As economic actors, these Rising Powers exercise large-scale influence on: global governance; global production, trade, labour and financial flows; the environment; the generation of new knowledge and innovation; and geo-political relationships. These changes have implications for other developing countries' engagement with the Rising Powers. They also have consequences for the developed world as it negotiates new relationships and partnerships with the Rising Powers. We are, thus, witnessing a key transformative moment in world history, with implications that will shape the global economy, and global economic and social relationships over the next few decades.

This early career researchers’ workshop is linked to a larger international conference on the same core themes, which concludes the ESRC ‘Rising Powers and Interdependent Futures’ research programme. The workshop aims to give early career researchers an opportunity to present and discuss their research related to the Rising Powers, and to exchange their ideas and findings with peers, senior academics and other experts on the subject.

We encourage proposals for papers from across the social sciences, including but not limited to anthropology, political science, development studies, geography, law, and economics.

Contributions are especially invited around the following themes:

• Innovation systems, emerging technologies, and the roles of the Rising Powers in shaping global innovation
• The roles of the Rising Powers in peace and security architectures at regional and global levels
• The roles played by the Rising Powers in cross-border relations and in shaping regional integration with neighbouring countries
• South-South cooperation and the emergence of Rising Powers as actors in international development
• Rising Powers, global partnerships and financing for development
• The impact of the Rising Powers on developing countries through changes in the global economy
• Social and environmental issues within the Rising Powers
• Impact of the Rising Powers on social and environmental issues beyond their borders, e.g. South-South cooperation and investment in low carbon technologies, engagement in global governance on social and environmental standards, climate change, etc
• Changing geographies of global development in the context of the Sustainable Development Goals
• Southern identities or the cultural dimension of ‘Southerness’ that is implicit in claims of affinities within the global South
• Rising Powers roles in changing geographies and governance of global value chains and global production networks
• Papers on any other areas that help understand the ways in which the Rising Powers shape our interdependent future

Deadlines:
- Abstract submission: 10 March 2017. Please send your abstract (max. 300 words) to natalie.langford@manchester.ac.uk and corinna.braun-munzinger@manchester.ac.uk indicating 'early career workshop' in the subject line

- Full paper submission: 12 May 2017 (max. 8,000 words excl. abstract, notes, references etc.) Papers will be circulated to discussants prior to the workshop.

There is no registration fee for the workshop. Refreshments and lunch will be provided. Unfortunately, we are unable to reimburse travel and accommodation expenses.

Call for papers: Workshop on ‘Rising Powers and Labour Standards in Global Production Networks’, 19-20 June 2017, Manchester

The ‘Rising Powers’, especially China, India and Brazil, have now become key players in the global economy. Yet, we still know too little about how these economies are engaging with and potentially shaping, the rules that govern international trade and global production, in particular global labour and social standards. For producers around the world, meeting international standards on social and environmental sustainability is increasingly critical. We are now more aware about the food we eat and how it came to our plates, or whether what we wear implied sweatshop labour. Nonetheless, gains from social compliance – especially for workers and poor producers – remain unclear. Expanding trade between the Rising Power economies, their growing domestic consumer markets and the emergence of leading firms from China, India and Brazil raise questions on how global standards will be shaped in the future, who the key drivers will be, and what implications arise for workers in both these emerging economies and throughout the global economy.

This workshop will present findings from work undertaken in Brazil, China, India and the EU, as part of an ESRC funded project on labour standards and the governance of global production networks. It also aims to bring together a wider community of academics and practitioners working on labour and sustainability standards in the global economy, but with a particular interest on the ‘Rising Powers’ and how they might sustain, challenge, or change the global discourse on labour and sustainability standards. Hence, we particularly invite proposals for papers around the following themes:

• The emergence of rising power MNCs, their engagement with CSR and social standards, and the implications for global labour and social standards in global value chains
• The role of innovation, CSR, and human rights in global value chains
• The engagement of civil society actors in the rising powers with local and/or global CSR initiatives and social standards
• Public labour regulation in Brazil, China and India and the engagement of these countries in the international institutions where trade rules on labour and social standards are defined
• The implications of the rise of Brazil, China and India for labour and social standards in OECD and developing economies

Deadlines:

• Abstract submission: 24 February 2017. Please send your abstract (max. 300 words) to khalid.nadvi@manchester.ac.uk and natalie.langford@manchester.ac.uk

• Full paper submission: 12 May 2017 (max. 8,000 words excl. abstract, notes, references etc.) Papers will be circulated to discussants prior to the workshop.

Accommodation costs in Manchester will be covered for authors of accepted papers.

Giving workers employment rights increases productivity and profitability

By Boni Sones, University of Cambridge

Image by Stuart Miles. FreeDigitalPhotos.net

We live in a globalised world and buy products produced by workers’ from all over the World. Increasingly consumers are demanding that those who produce our goods are employed on decent terms and conditions whether they work in Europe, Africa, India, Russia, China or South America. Sweatshop labour used in one continent is often named and shamed in another and these reputational effects can affect demand for goods. But as consumers ask for more fairtrade goods from the developing world, workers in the so called global North are finding that their employment is more insecure, as greater numbers are employed on zero hour contracts, while all workers are finding it harder to access employment tribunals to enforce their employment rights.

The Centre for Business Research at the University of Cambridge has turned conventional wisdom on its head, and through a series of quantitative research projects over a number of recent years, has constructed a new database that reveals how improvements in labour rights can lead to increased productivity and employment as well as greater equality in society. These datasets are now online for others to access and use.

International organisations are taking note of these findings and national governments would do well to consider them. Globalisation, rather than inducing a so called ‘race to the bottom’ as many commentators predicted, is making governments more aware of the need for improved protections for workers, and of the importance of enforcement. Better informed and discerning consumers who are switched on to the web and social media where they can check the sourcing of the products they buy, along with campaigning civil society groups and NGOs, are helping to enforce these values.

The statistical studies carried out by the CBR complement qualitative research carried out by the Global Development Institute at The University of Manchester.

In a recent CBR workshop held in Cambridge in September 2016 researchers from both Universities discussed the findings from ESRC-funded research on labour law reforms, labour standards and corporate social responsibility (CSR) practices in Rising Powers, including China, India, South Africa and Brazil.

Many commentators have doubted that worker-protective labour laws can be made effective in developing countries with high levels of informal work and weak states. This has led to interest in alternative modes of regulation including codes of practice and consumer boycotts focused on global supply chains. But this focus neglects important changes on the ground in low- and middle-income countries in Africa and Asia which over the past decade have been implementing systematic reforms to their labour laws and codes, sometimes after much publicised strikes.

Admittedly the aims of these reforms are diverse: they include promoting industrial peace, encouraging employers to invest in training, and cushioning the effects of labour migration. Often these interventions have had the effect of encouraging formalisation of work and building state capacity. They have also operated in conjunction with, rather than in opposition to, voluntary measures and soft-law initiatives aimed at improving labour governance in value chains.

Encouragingly, while there are still many difficulties associated with the operation of labour standards in emerging markets, empirical work is revealing a more complex and differentiated picture than that frequently presented. There is good reason to be optimistic about these trends.

The two day workshop presented findings of two main types:

• Results from quantitative research analysing a unique dataset of labour laws around the world, constructed at the CBR in Cambridge. 
• Research from fieldwork conducted in case study countries, including China, Brazil, India, and South Africa, by teams based respectively at the Universities of Cambridge (Simon Deakin and colleagues) and Manchester (Khalid Nadvi and colleagues). 

The research undertaken by the Cambridge team deploys a unique dataset, the CBR Labour Regulation Index, which codes for labour laws in 117 countries over the period 1970 to 2013 (43 years). It is the first time that the laws of so many countries have been coded in this way and the dataset will be of very considerable interest to research users and policy makers.

The fieldwork research also breaks new ground in offering in-depth analyses of the implementation of labour law reforms in such contexts as Guangdong province in China, and on the interaction of labour laws with private labour standards operating in global supply chains.

The qualitative case studies undertaken by the Manchester team explore how lead firms in the rising powers engage with labour standards and CSR practices in their now increasingly global supply chains, and investigate the influence of civil society actors as well as the state in the development of private regulatory initiatives and in framing the discourse on labour standards.

For more details:

Listen to our CBR podcast series that features interviews with speakers at the workshop on Labour Standards and Labour Law Reforms in the Rising Powers, held in Cambridge on 5-6 September 2016.

Publications from the two projects are also available here:

• output from the Manchester project on the Rising Powers website 
• output from the Cambridge project on the Rising Powers website and on the University of Cambridge website

Podcast: John Knight on China’s effective but flawed economic governance

by Global Development Institute (GDI), University of Manchester

Professor John Knight, The University of Oxford, recently spoke at the GDI on ‘the principal-agent problem, the developmental state, subjective well-being and social instability: China’s effective but flawed economic governance.’

Listen to the talk in full below:


This blog post was originally published on 21 June 2016 on development@manchester. Read the original post.

Reversing the international flow of innovation: Interview with Simone Corsi

Simone Corsi, Research Fellow, Dept. of Entrepreneurship, Strategy & Innovation,
Lancaster University Management School and Programme Manager, Lancaster China Catalyst programme, was interviewed after presenting at a seminar hosted by the Manchester Institute of Innovation Research (MIOIR) on 29 February 2016. Listen to his conversation with Dr. Yanchao Li here.




Stepping aside from the International Product Life Cycle Theory (Vernon, 1966) that considered advanced economies as the only loci of innovation, scholars are now looking at the growing role of emerging economies as potential sources of global innovation. Simone Corsi draws on the concept of reverse innovation (Immelt et al, 2009; Govindarajan & Ramamurti, 2011) in its common market-based definition and expands it by adding an R&D perspective, highlighting the importance of where the innovation was ideated (R) and developed (D) as determinants for a reverse innovation. A new typology of reverse innovation is then described, identifying multiple patterns of innovation where emerging economies play an important role and framing the new concept within a global innovation setting.

Recognizing China as one of the most prominent emerging economies, the seminar at MIOIR looked at how the Chinese market can influence the innovative activities of foreign MNCs and become a source for global innovation. Four case studies of foreign MNCs and R&D activities in China were presented and analyzed. These confirm an evolutionary path of foreign R&D activities in China from an exploitative to an explorative nature, although we move away from a framework where host countries affect MNCs’ subsidiaries innovation activity based on their technological richness and diversity (Almeida & Phene, 2004; Frost, 2001) stepping into a context where Chinese subsidiaries can be considered as interpreters of local market characteristics, whose inputs configure unique innovation sources. The results show how the Chinese competitive context can trigger global innovation if stimuli are properly received at both local and corporate levels.

Chinese engagement in African agriculture is not what it seems

Ian Scoones, University of Sussex

In December 2015, Chinese President Xi Jinping flew into South Africa for the Forum on China-Africa Co-operation with great fanfare. There were lots of announcements about prospective investments across Africa. Agriculture featured prominently. But what is the real story of China in Africa on the ground, beyond the hype?

As Deborah Brautigam’s investigative research has so effectively shown, the assumptions about China’s role in Africa are often not borne out in reality. The level of investment and linked aid flows are much lower than the high numbers sometimes touted; the numbers of imported Chinese workers are much lower than often suggested; the areas of land “grabbed” for investment are small compared to the vast areas identified by some.

And, as Brautigam’s recent book shows, Africa will not be feeding China or China feeding Africa anytime soon.

Reality on the ground

We set about finding out what was happening on the ground. Working with African, Chinese and European colleagues, our team investigated Chinese engagements in agriculture in four countries – Ethiopia, Ghana, Mozambique and Zimbabwe. All have featured prominently as priorities for Chinese investment and aid.

Our just-completed project is reported in a new open access special issue of the journal World Development. So what exactly has been going on?

This proved surprisingly difficult to find out. The data on land acquisition, investment flows and aid projects is limited and confusing. It often doesn’t add up. Ghost projects are listed that never happened, and others are missed out.

Our original idea of doing a simple geomapping exercise based on available data was quickly abandoned. Instead, we had to triangulate between multiple sources to find out what was happening where.

Certainly there is a great deal going on, and the Chinese presence in Africa is important. The Chinese role in agriculture – in terms of business investment, technology transfer, demonstration efforts, training and more – is growing, and shaping perceptions.

We chose cases across the four countries to investigate in more detail. The studies aimed to explore the detail of investments, technology projects, training and development encounters more generally.

The central question we asked was: is China reshaping African agriculture?

No singular ‘Chinese model’

The Chinese Agricultural Technology Development Centres are flagship investments. There are now 23 across Africa, funded in their first phase by the Chinese Ministry of Commerce under their aid program. They are run mostly by companies, and are linked to a commercial model for training and technology demonstration and sale.

As Xiuli Xu and colleagues show, the centres’ performance very much depends on who is running them. Different provincial companies have very different characteristics, demonstrating that there is no singular “Chinese model” of development, or state-business partnership.

We also explored a number of cases of business investments in agriculture, primarily led by Chinese state-owned enterprises. Chinese development efforts mix aid with commerce, linking both provincial and central state involvement with different businesses.

For example, as Jing Gu and colleagues explain, in Xai Xai in Mozambique, the Wanbao agricultural development company from Hubei province took over 20,000 hectares on a state farm to farm rice, and develop a contract farming arrangement with surrounding farms.

It has not been easy. There have been a number of changes in company leads, disputes with local communities, and shifting alliances with local elites, as Kojo Amanor and Sergio Chichava set out.

The training of government officials is an important aspect of the Chinese engagement in Africa. More than 10,000 are trained in numerous courses in China each year, many in agriculture. This far exceeds any training initiative of any western aid programme.

Henry Tugendhat and Dawit Alemu explored the impacts of these courses, participating in training in China, and interviewing officials who had returned home to Ghana and Zimbabwe. While there have not been many immediate impacts, the longer-term building of relationships and the exertion of “soft power” diplomacy is important.

The role of informal Chinese migrants

Chinese migrants supply specialist Chinese foods to burgeoning expatriate populations. Reuters/Noor Khamis

Perhaps the most far-reaching but least understood dimension of Chinese involvement in African agriculture is the growing number of informal migrants getting involved in the agri-food sector, from farming to processing to retail to restaurants.

Seth Cook and colleagues investigated this in Ethiopia and Ghana. They discovered a range of activities: relatively few farmers, but growing investment in supplying specialist Chinese foods to burgeoning expatriate Chinese populations.

Those involved are very often migrants who came as part of Chinese government contracts, and have since established business connections and stayed, encouraging others to join them from China.

Through our work, we were able to gain a snapshot of the early stages of Chinese engagement in African agriculture. Our results show successes as well as failures. But Chinese engagement is certainly not yet at the scale sometimes assumed.

In the longer term, activities may accelerate as more opportunities open up. But China is also changing. As its economy restructures to a “new normal”, there are different demands. Food will certainly remain one, but this is not likely to come from Africa.

As a new global power, China will want to maintain business, aid and diplomatic relations with Africa, and sustaining relationships will be important. China plays the long game, and our studies were observing just the opening stages.

Ian Scoones, Professorial Fellow, Institute of Development Studies, University of Sussex

This article was originally published on The Conversation. Read the original article.

Are China and Brazil transforming African agriculture?

By Ian Scoones

A new Open Access Special Issue in World Development based on our work on the changing role of China and Brazil in Africa’s agriculture is now available (links to individual articles are below, and also via here).

The work was developed under the ‘China and Brazil in African Agriculture’ project of the Future Agricultures Consortium. The project was supported by the UK Economic and Social Research Council (grant: ES/J013420/1) under the Rising Powers and Interdependent Futures programme.

The research involved studies in Ghana, Ethiopia, Mozambique and Zimbabwe, as well as China and Brazil. There were over 20 research collaborators involved, from Africa, China, Brazil and Europe, and it was a massively rich, if sometimes challenging, experience. Our research looked at 16 different case studies, involving a mix of agricultural investments by private and state owned enterprises, tri-lateral development cooperation efforts, technology demonstration initiatives, training programmes, as well as ‘under-the-radar’ involvement in agriculture by Chinese migrants.

There was no single story emerging, but a complex set of engagements, which contrast in important ways with existing patterns of western-led development and investment, and offer important opportunities for reflection and learning. These 8 papers (along with over 20 other Working Papers on the project website) are the result. Do download, read and send us feedback! It’s been a lot of work putting them together!

Ian Scoones, Kojo Amanor, Arilson Favareto and Gubo Qi: A new politics of development cooperation? Chinese and Brazilian engagements in African agriculture

Kojo Amanor and Sérgio Chichava: South-South cooperation, agribusiness and African agricultural development: Brazil and China in Ghana and Mozambique

Jing Gu, Zhang Chuanhong, Alcides Vaz and Langton Mukwereza: Chinese state capitalism? Rethinking the role of the state and business in Chinese development cooperation in Africa

Alex Shankland and Euclides Gonçalves: Imagining agricultural development in South-South Cooperation: the contestation and transformation of ProSAVANA

Lídia Cabral, Arilson Favareto, Langton Mukwereza and Kojo Amanor: Brazil’s agricultural politics in Africa: More Food International and the disputed meanings of ‘family farming’

Seth Cook, Jixia Lu, Henry Tugendhat and Dawit Alemu: Chinese migrants in Africa: Facts and fictions from the agri-food sector in Ethiopia and Ghana

Henry Tugendhat and Dawit Alemu: Chinese agricultural training courses for African officials: between power and partnerships

Xiuli Xu, Xiaoyun Li, Gubo Qi, Lixia Tang and Langton Mukwereza: Science, technology and the politics of knowledge: the case of China’s Agricultural Technology Demonstration Centres in Africa

The papers examine how agricultural technologies, practices and policies travel across the world as part of investment and development cooperation. Technologies and policies always have histories, and emerge in particular social and political contexts. Yet China and Brazil both argue that theirs are perhaps especially relevant to Africa, given common agroecological conditions, and similar histories of agricultural development. We were interested in finding out how things travelled, and what happened during the journey.

Of course the transfer of technologies and policies, as we’ve long known, is not simple or linear. Assumptions are often deeply embedded (such as what a farmer is, what scale is appropriate, and how different sorts of technology are important), but they do not always translate into new contexts. Not surprisingly, despite the claims, not everything generated in Brazil and China has landed easily in Africa. There have been rejections, resistances, and so revisions and recastings; all of which highlight the importance of ‘development encounters’ and the negotiations about knowledge (and technology, practice, policy) that must go on during development cooperation – whether with a western aid agency or with Brazilian and Chinese actors.

Together, the papers show how historical experiences in Brazil and China, as well as domestic political and economic debates, affect how interventions are framed, and by whom, and so influence what technologies are chosen, which investments are funded, and who gets trained. The papers argue for a focus on the encounters on the ground, moving beyond the broader rhetoric and generic policy statements about South-South cooperation. For example, a key feature of Brazilian and Chinese engagements in African agriculture is the role of state-business relations in shaping and steering development; something that other agencies such as DFID interested in the role of the private sector, and public-private partnerships, might usefully learn from.

The special issue asks if a new paradigm for development cooperation is emerging, and argues that we must move beyond the simplistic narratives of either mutual benefit and ‘South-South’ collaboration or ‘neo-imperial’ expansion of ‘rising powers’. As the introductory paper argues, we need a more sophisticated account than this simplistic binary, and to “look at the dynamic and contested politics of engagement, as new forms of capital and technology enter African contexts”.

Do read, share and comment on the papers. We hope they will generate a debate about the role of the ‘rising powers’ in African development, and help us move towards a more nuanced appreciation and away from the rather simplistic frames that have dominated the debate to date.

This post was written by Ian Scoones and first appeared on Zimbabweland

A new economic geography of trade and development?

By Rory Horner

In a new article published via Territory, Politics, Governance, Rory Horner reviews emerging evidence of the growth of South-South trade and argues for the need to move beyond win-win notions from development cooperation to highlight the commercial realities and very uneven geographies and development outcomes associated with this new economic landscape. 

The new geography of trade
More than a decade ago, UNCTAD declared that “a new geography of trade is emerging and reshaping the global economic landscape”. In 2012, a milestone was passed with the value of trade between developing countries (South-South trade) overtaking developing country exports to the global North.

Various indicators confirm this shifting geography as demonstrated in the below table. Claims such as those outlined in the UNDP’s The Rise of the South or the increasingly widespread notion of an “Africa Rising” are reflected in the growing share of global GDP generated in the global South. South-South trade is growing significantly, while the geography of demand is also changing – with import demand increasing rapidly within the global South. Notably, these trends are led by the rising power economies of Brazil, India, China and South Africa.

Summary indicators of the shifting geography of income and trade in the world economy:

	Then	2012
South % of global GDP	21.7 (1980)	35.8
Export as % of GDP for Southern countries	16.7 (1981)	29.5
South % of world exports	29.6 (1980)	44.7
South-South % of global trade	11.7 (1995)	25.5
North-North % of global trade	51.2 (1995)	33.9

Source: Horner (2015, 7)

South-South trade raises the exciting prospect of moving beyond the more unequal and hierarchical North-South trade relationship. Specifically, South-South trade has been heralded as “vital for development” (OECD, 2006) and such trade integration viewed as “key to rebalancing the global economy” (UNCTAD, 2011). Much of the excitement in relation to South-South trade draws on “win-win” ideas of horizontal, more equal interaction drawn from the arena of development cooperation. Given that North-South trade has been characterised by high levels of inequality and hierarchy, the implicit suggestion is that South-South may offer at least some better opportunities.

Many of these optimistic viewpoints are somewhat speculative, however. It is questionable whether and how the intended “win-win” notions of South-South development cooperation translate into the commercial realities of South-South trade. The now quite significant body of research on China, and to a lesser extent India, in Africa suggests that while trading relationships may overlap with some of the intended aims of South-South cooperation, the associated impacts are not necessarily win-win. New hierarchies can characterise these relationships, leading to some suggestions of forms of neo-colonialism.

An emerging agenda on South-South value chains and production networks
Research on global value chains (GVCs) and global production networks (GPNs) can move beyond some more macro-scale, geopolitical interpretations to take an actor-centric approach to understand the variegated, region and industry-specific development implications of trade. However, such research has, to date, largely had a North-South orientation, focussing on those firms and farms in the global South participating in chains and networks mostly governed by lead firms from the global North.

Emerging evidence on South-South value chains also highlights two competing possibilities. As summarised in the table below, nascent empirical evidence has charted the potential for easier access to South-South markets in comparison to those of the global North, but also the new competition and unevenness within the South.

Emerging evidence on South-South value chains and production networks:

	Pros: More accessible markets	Cons: Greater competition
Volume/price	Greater volumes	Lower prices, more competitors
Standards	Lower requirements	Lower requirements may be short-lived
Upgrading	Learning and functional upgrading opportunity	Uneven capabilities among firms to benefit
Dependency	Diversification of end-market risk	Potential new dependency

Source: Author’s construction

Governance of, and upgrading within, South-South value chains and production networks are two issues which deserve particular attention. In relation to private governance, new lead firms from the global South are playing increasingly prominent roles in coordinating trade. With firms from outside the global North comprising an increasing share of the world’s largest firms, it is necessary to understand the forms of governance these firms exert, including through private standards requirements. Public governance, a less focussed-on topic within GVC and GPN research, is also crucial to understand in terms of the varying capacity of state policymakers to shape South-South GVCs and GPNs. Upgrading opportunities deserves attention, including in relation to the possibilities arising from different end markets and the associated strategies required. With increasing heterogeneity within the South, the differential possibilities for upgrading, but also the possibilities for downgrading and negative outcomes from South-South trade warrant attention.

In June 2015, I organised an early career conference on this theme of “Global production networks and new contours of development” at the University of Manchester. We had 20 presentations from early career scholars moving beyond the North-South orientation of much research on GVCs and GPNs.

In two ongoing projects, I am now researching more deeply the nature of South-South production networks and their development implications, through an investigation of the economic, social and political relationships that constitute India’s “pharmacy to the developing world”. In South Africa, funded by a British Academy small research grant, I am exploring the various engagements of Indian firms and their local development implications. In East Africa (specifically, Uganda, Kenya and Tanzania and with the support of a Regional Studies Association early career grant), I am investigating the challenges for local pharmaceutical production and its viability vis-à-vis competition from Indian supply. The initial stages of these projects confirm comparatively lower entry barriers in such production networks, and find quite diverse implications for local stakeholders – with key differences, for example, between local industrial and consumer interests. Such outcomes fall in various positions along the spectrum between the two polar extremes of the discourse on South-South relations – as “win-win” development cooperation or neocolonialism.

Ultimately, new research can move beyond the win-win notions often drawn from an earlier era of South-South cooperation to unveil the commercial realities, varied outcomes and very uneven geographies of expanding South-South trade.

This blog post was originally published on Development@Manchester on 10 November 2015.

Rising Power multinationals and global development

Image by jscreationzs, FreeDigitalPhotos.net

By Mo Yamin and Rudolf Sinkovics

Mo Yamin and Rudolf Sinkovics introduce a special issue of critical perspectives on international business, Vol 11, No.3/4 on the developmental impact of Rising Power firms.

Huawei phones, Nando’s chicken, Tata cars – brands from Rising Power countries are present in more and more countries across the globe. The new multinationals that produce these brands are increasingly competing with established Western multinationals, in the Europe and America as well as in Africa and Asia. But what impact do these Rising Power multinationals have on global development? As they expand their global operations, how do they influence the economy, people and the environment? These questions are at the core of a special issue in Critical Perspectives on International Business.

The developmental promises and challenges of Chinese, Indian, or Brazilian companies’ international operations are controversial. One argument in favour of South-South FDI is that firms from emerging economies might adapt more easily to local realities in a developing country than multinationals from the US or Europe. So, do they better understand the needs of low-income consumers, and can they provide these with goods and services that used to be available only for the rich? Or, on the other hand, should we believe media reports on land grabbing and giant infrastructure projects by Chinese or Indian investors that destroy the environment and harm local communities?

Against this debate, the special issue takes a closer look at the nature and strategies of these Rising Power firms. Four articles in the collection look at how capabilities of these firms differ from those of Western multinationals. First, Peter J. Williamson finds that Rising Power firms have distinctive capabilities of innovation and reconfiguration that can give them an edge over competitors. Peter Konijn and Rob van Tulder examine “Resources-for-infrastructure (R4I) Swaps” as a specific market entry strategy of Chinese firms in African countries.  Taking a different angle, Jaya Prakash Pradhan and Keshab Das highlight regional differences within Rising Power countries and their effects on export performance of local SMEs. Further, Rory Horner shows how the emergence of Rising Power firms in the pharmaceutical sector has led established multinationals to increase pressure around intellectual property rights in India and South Africa.

Three further articles examine how the concept of global value chains (GVCs) can help to understand Rising Power firms’ developmental impact. Zaheer Khan, Yong Kyu Lew and Rudolf R. Sinkovics show why Pakistani automobile suppliers have benefited relatively little from their integration into GVCs. Joonkoo Lee and Gary Gereffi  point out that new markets in emerging economies and new regional value chains can be an opportunity for developing country firms to upgrade economically. However, they warn of a risk that this economic upgrading may be accompanied by negative social effects. Finally, contributing to the debate about the social impact of Rising Power firms, Noemi Sinkovics, Rudolf R. Sinkovics, Samia Ferdous Hoque and Laszlo Czaban propose a reconceptualization of social value creation, focusing on the “root causes” of constraints to creating social value.

Overall, the special issue contributes both conceptual thinking and empirical insights to the debate around the developmental impact of Rising Power firms. In sum, the articles show that there is no easy answer to the question of whether these new Chinese, Indian or Brazilian multinationals are good or bad for global development. But one thing is sure: We should keep an eye on them.

For more details, please refer to:

Mo Yamin , Rudolf R. Sinkovics , (2015) "Rising power firms – the developmental promises and challenges: an introduction", critical perspectives on international business, Vol. 11 Iss: 3/4. http://dx.doi.org/10.1108/cpoib-04-2015-0016

Read the full special issue of critical perspectives on international business, Vol 11, No. 3/4.

Debating China in Central Asia

Will China continue to defer to Russia in Central Asia’s international security relations?

By John Heathershaw (Text and photocredits)

What kind of great power is China in Central Asia?  It was this question that animated our discussions in October as colleagues and new contacts of ExCAS gathered in Shanghai and London to discuss China’s emerging role in the region.  Prompted by ongoing research and the recent report by our partner Saferworld (who wrote their own summary here), we asked whether Chinese power will remain primarily economic and whether China will continue to be a singular actor in the region.

On 14 October, several of us associated with the ESRC Rising Powers and Conflict Management in Central Asia research project met in Shanghai to discuss conflict and security questions in Central Asia and China’s current role as the region’s main trading partner and foreign investor.  This event was co-organised between the Shanghai Institutes of International Studies (SIIS) and Saferworld. Participants included: Chen Dongxiao, President,  SIIS; Aisher Khamidov, Independent researcher, Kyrgyzstan; Li Lifan, Shanghai Academy of Social Sciences; Bernardo Mariani, Saferworld; Anna Matveeva, Kings College London; Yang Cheng, East China Normal University.

The following week, on 23 October, a few of the participants – including Yang Cheng, Anna Matveeva and myself -reconvened in London to consider China relations with Russia including in both Central Asia and the Russian Far East.  We were joined by Bobo Lo of Chatham House, Caroline Humphrey of the University of Cambridge, Alexei Maslov of the Higher School of Economics in Moscow and Marcin Kaczmarski of the Centre for Eastern Studies, Warsaw.  The event was co-organised between the universities of Cambridge and Exeter and hosted by the Royal Institute of International Affairs Chatham House.

Several core questions reoccurred across the two events.  These included:

1.  Is China’s role in Central Asia similar to its role in its other neighbouring regions, including the somewhat comparable Russian borderlands, or is qualitatively different?

2. How does China’s relations with other great powers, especially Russia, affect its role in Central Asia?  Are these relations shifting from formally ‘equal partners’ to subservience of Russia to China?

3. How will the One Belt, One Road (OBOR) strategy with an estimated $50 Billion of investment and associated strategic engagements transform Central Asia?

4. Is China a singular actor in Central Asia where all Chinese governmental, state-owned enterprise (SOE) and private business in the region act consistently according to a single policy from Beijing (or is something more complicated afoot)?

5. How can China remain an overwhelmingly economic power in the region (as its own rhetoric claims) when history suggests that rising powers always seek wider political and security roles in their neighbouring region?

6. Will China continue to defer to Russia as the security guarantor for Central Asia?  Will China continue to play a passive or very indirect role in the management of minor armed conflicts in the region, particularly with the recurrent political violence surrounding the increasingly authoritarian regime in Tajikistan?

With a variety of views expressed in the workshops, I was struck by the sense of flux in China’s current position in the region.  Central Asia remains of less importance to China than any other region.  This is reflected in the knowledge and understanding of the region in Chinese academia and the  think-tank world.  We were fortunate to have two of the most knowledgeable Chinese experts in Li and Yang with us in Shanghai and London but such researchers with field experience of Central Asia are few and far between.  Our workshop in Shanghai also included experts on the Americas, Europe, South Asia and the Middle East echoing the reality that Central Asian is often seen through the prism of these regions – where China has estbalished political and security roles.

How far will this change under OBOR and the ‘drive West’?  In other regions, as the research of Lee Jones and Shahar Hameiri shows, China becomes not just a political and security player but a decentred one as SOEs and private businesses begin to pursue agendas distinct from that of Beijing.  Tensions between ministries may emerge.  Lack of knowledge and interest, along with the relativeness newness of Chinese engagement, means that most Chinese investors presently follow Beijing’s lead in infrastructure and trade agreements.  As Central Asia is considered a ‘frontier’ region this may continue for some time.  An added complexity is the ‘Sinophobia’ apparent in Central Asia.  It is unlikely that this suspicion of China will change rapidly even as more Central Asians go to China as students and traders.  One important factor will be whether Chinese companies become significant employers of the local labour force.  The current impression – not entirely unjustified – is that Chinese businesses employ their own, pay their workers poorly, and keep themselves to themselves.   This may soon change as Chinese and Central Asian governments seek to generate real economic growth in the region to meet the ambitions of OBOR.  But impressions often last long.

In this dim light, China’s potential security role in the Central Asian republics seems distant indeed.  However, a glance across the border to China’s emerging role in Afghanistan suggests that a more activist foreign and security policy make just be a matters of the eventfulness of international politics.  History and logic also suggest that China is unlikely to allow Russia gate-keeping rights over security cooperation in Central Asia for perpetuity.  It is China which borders Kazakhstan, Kyrgyzstan and Tajikistan after all, despite Russia’s claim to its ‘near abroad’.  Such deference would be rather like early 20th century America allowing a foreign power to be the security hegemon for Mexico or the Caribbean states (something which had already ruled out with the Monroe Doctrine of 1823, of course).   This is a problematic historical analogy – as the US was reacting to European colonialism, not a post-colonial world, and the America were its primary neighbour - but at a certain level it is telling.  Geopolitics is a constructed phenomenon not a pattern which emerges from simple physical and political geography.  It may be constructed in a manner which belies the supposed eternal truths of political realist thought.  But it would be surprising, perhaps unprecedented, if China did not internalise classical geopolitical discourse and play a more assertive role in all its borderlands, even the most distant from the populous East.

The question is made the more urgent by the multiple incidents of minor armed conflict which have taken place in one of China’s Central Asian neighbours since 2008.  Tajikistan has experienced no fewer than six serious incidents of political violence over that time, largely involving senior officials or former officials and mid-ranking security officers.  In addition, it saw the head of its special forces Gulmurod Halimov defect to ISIS/ISIL in March 2015. Losing both Halimov and the recently promoted deputy defence minister Abdulhalim Nazarzoda to rebellion in the same years must say something about the (in)stability of the Tajik state.  More particularly, it tells us that it is the regime which is producing these rebellions as it seeks to narrow its circle and expel all those whose absolute loyalty it doubts.  Will China stand by if a future rebellion causes wider instability?  Its notable 8 September statement in support of political stability, following the violence associated with Nazarzoda on 4 September, suggests it is watching closely.

A greater security role for China in Central Asia – beyond its formal cooperation within the Shanghai Cooperation Organization – may be far off.  But rather than strategy dictating we may expect events beyond Beijing’s control to play a profound role.

This blog post was originally published by the Exeter Central Asian Studies Network on 30 October 2015 (revised on 2 November 2015).

Bioinformatics in the UK, India and China

By Brian Salter, Yinhua Zhou and Saheli Datta

Bioinformatics has recently been recognised in the UK as a ‘huge priority for government’ with the ‘potential to drive research and development, increase productivity and innovation and ultimately transform lives.’ (UK Medical Research Council, 2014). While there is wide agreement among nations regarding the importance of bioinformatics, there is little consensus over possible pathways for maximising its contribution to the life sciences. A recent paper by Salter, Zhou and Datta (2015) explores the extent to which bioinformatics have become a strategic priority for India, China and the UK, and how these efforts are shaping or are in turn being shaped by the existing norms, rules and institutions in the global lifesciences.

Bioinformatics is the combination of knowledge, skills and techniques of biology made 'readable' with computer science, statistics and mathematics. The traditional view of the role of mathematics and computer science in bioinformatics was that of a 'means' to the end of capturing and understanding increasingly data-intensive biological knowledge production e.g. as with genomic data. However, in the last few years a more balanced view has emerged that considers computer science and mathematical tools as both the object and instrument of knowledge production. Leonelli’s (2012: 2) comment that ‘data-intensive methods are changing what counts as good science’- is perhaps nowhere more relevant today than in bioinformatics where the tug-of-war for primacy between two disparate branches of science (mathematics and biology) has become increasingly polarized.

For nations, in particular emerging economies, these spaces of rapidly advancing technology, uncertainty and political tensions that sit uncomfortably within the hegemonic norms, rules and institutions in the global lifesciences increasingly represent spaces of future growth and opportunities for catching up with the west. For emerging economies, the ensuing shift from ‘developmental state’ into what has been described as the ‘adaptive state’ and the ‘transformative state’ signals the opportunity to shape global lifesciences according to their national interests (Kim, 1999; Salter, 2009a; Wu, 2004; Wong, 2005). For the west, the changing nature of ‘science’ and simultaneously the changing role of emerging economies’ participation in global sciences, questions the established mutually beneficial relationship between ‘state and science’ – where science supplies the state with a flow of knowledge, and the state supplies science with the resources to pursue research interests – the fundamental question being how to accommodate transnational science with national interest?

Yet, it would be mistake to presume that the changing nature of science presents only opportunities and few challenges for emerging economies. From a political perspective, the mutually beneficial state-science relationship at the heart of western domination of global lifesciences since WWII never really developed in India, China or Brazil. Simply put, science in the BRICS lacked political value – until now; thus today, for science to progress the key need is to forge and nurture the ‘science and state’ relationship. Furthermore, while a scientific elite is emerging in the BRICS, their experience in negotiating the key science-state relationship to take the national scientific ambition forward is lacking - although the reverse influx of seasoned diaspora (to the BRICS) from elite western scientific communities is helpful. Similarly, the institutional tools generated by more than sixty years of western domination of global lifesciences is reflected in the hegemonic dynamic of today's global bioinformatics governance and in turn disadvantages new entrants like the BRICS whose establishment of similar institutional strengths is still in its nascent stages. For instance, the Bermuda rules of 1996 enabled the development of bioinformatics self-regulation in western nations, but at the exclusion of China and India.

In the case of China, a top-down style of innovation governance has been adopted with the State Council setting the 'science' agenda with its Five Year Plans. Similarly, India’s Planning Commission’s (recently dissolved) has so far used a similar mechanism of Five Year Plans to set the agenda for the Ministry of Science and Technology (MOST) and the Department of Technology (DIT). In contrast the UK's bottom-up approach with funding from both public and private sources is strengthened by a state apparatus that collaborates closely with a science-led (and scientific elite led) agenda. Neverthless, the Chinese or Indian state's committment to becoming global players cannot be doubted. For instance, between 2005 and 2014, China invested a whopping £303 million in bioinformatics compared to India’s £18 million and UK’s £163.9 million. However, a close study reveals that the bulk of China’s funding of £216 million while earmarked under the broad category of ‘bioinformatics’ was further earmarked under the sub-category ‘New Drug Creation and Development (2009-2010)’ – implying that states differ in their interpretation of what constitutes or differentiates bioinformatics from biomedical innovation.

That western hegemonic domination of global lifesciences has extended into bioinformatics is an accepted fact. However, the extent to which this status quo will be retained given the changing nature of science and the spaces of opportunity it has created for the BRICS to climb ever higher in the global lifesciences value chain, is worth questioning.

This blog post originally appeared on the Global Biopolitics Research Centre blog on 15 July 2015.

Cooperation or competition? China and Russia in Central Asia

By Ivan Campbell

The recent launch of the Asian Infrastructure Investment Bank highlights China's economic and strategic ambitions, and will accelerate its economic expansion into Central Asia. As geopolitical dynamics shift, Ivan Campbell considers whether relations between China and the traditional regional hegemon, Russia, are likely to be characterised by continuing pragmatic cooperation or growing competition.

On June 29 delegates from 50 countries gathered in Beijing for the signing ceremony of the Asian Infrastructure Investment Bank (AIIB). The Chinese-led initiative is being seen as a diplomatic and strategic success for China, with this new multilateral financial institution set to provide an alternative to the World Bank and Asian Development Bank. Its creation was motivated in part by Chinese frustration at its under-representation and lack of influence in the existing international financial architecture, which remains dominated by Organisation for Economic Co-operation and Development (OECD) countries. However, despite opposition from the US, several of its allies – including the UK, Germany and Australia – have joined the AIIB as founding members.

The establishment of the AIIB reflects the shifting balance of global economic power from west to east, and it is expected to advance China's broader economic expansion. Intended to fund Asian energy, transport and infrastructure projects, the AIIB will support the reorientation of China's economic policy from domestic infrastructure development to infrastructure development beyond its borders. In addition, it ties in with China's periphery diplomacy and will enable China to engage more proactively, and to develop closer relationships, with other Asian countries – or as President Xi put it, to “turn China's neighbourhood areas into a community of common destiny”.

The launch of the Chinese-led AIIB is particularly significant when viewed from the perspective of Central Asia. It is likely to reinforce Chinese trade and investment in the region, which has already expanded massively in recent years. In 2013 President Xi signed deals worth a reported US$100 billion with four Central Asian states, and this came on top of a one hundred-fold increase in trade between China and Central Asia since the break-up of the Soviet Union. The AIIB supports China's vision of inclusive trade and transport integration in Eurasia, embodied in the concept of the Silk Road Economic Belt. The vision includes rail, road and air links, as well as energy pipelines. Financing will come from China's Silk Road Fund, as well as the AIIB and the Shanghai-based BRICS New Development Bank.

What are the implications of these developments for the five Central Asian states: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan? For much of the time since the break-up of the Soviet Union, the international community has viewed Central Asia as a region of risk and potential instability. This has been compounded by the chronic violence and insecurity affecting neighbouring Afghanistan. As a consequence, international engagement in the region over recent decades has been underpinned by a concern to contain conflict risks and to shore up state stability, despite significant concerns about governance and human rights.

One view is that having regarded Central Asia primarily through the lens of security – especially in relation to Afghanistan – the major powers are increasingly shifting their focus to the region's economic potential. Henceforth international engagement will be driven as much by the desire to tap the markets and resources of Central Asia as by concerns about conflict risks and instability. China has led this reorientation of approach through the Silk Road Economic Belt, AIIB and similar instruments, but it can be seen also in terms of the Russian-led Eurasian Economic Union (EEU), the US New Silk Road Initiative, and India's Connect Central Asia policy.

The potential benefits for Central Asian states, in terms of increased trade, investment and connectivity are clear – but equally there are risks arising from increased economic intervention when one considers conflict dynamics within the region and broader geopolitical trends. There is a range of threats to peace and stability both within and between the five Central Asian states. These include poor governance, weak rule of law, ethnic divisions, competition over water and land resources, drug-trafficking, and widespread poverty. There are particular concerns that conflict could be triggered by the eventual presidential successions in Kazakhstan and Uzbekistan when those changes come. Add in the threat of violent spill-over from Afghanistan, especially following the withdrawal of the International Security Assistance Force (ISAF), and the fragility of peace and stability in the region is all too apparent.

The geopolitical significance and abundant resources of the Central Asian region have long made it attractive to great powers, and thus the locus of strategic competition. China and Russia will increasingly be the principal players on this stage, especially after the final ISAF drawdown. As China steps up its engagement in Central Asia, it will inevitably affect local conflict dynamics. It may well create great opportunities for economic development in the region, but it also risks exacerbating existing inequalities or provoking local tensions. China's growing presence and influence in the region – despite being outwardly benign and focused on economic integration – has created unease about its longer-term intentions. Chinese attempts to lease tracts of land in Tajikistan and Kazakhstan, for instance, have generated considerable antipathy towards China among local populations.

Russia is the traditional regional power in Central Asia and, despite its diminished influence in the post-Soviet era, it remains the pre-eminent military and political actor. Thus far, Russia and China have co-existed relatively harmoniously in the Central Asian space, and appear keen to maintain a show of good relations – for example, President Xi's seat next to President Putin at the Victory Day parade in Moscow in May 2015. And China has appeared content to cede pre-eminence to Russia when it comes to matters of direct involvement in the politics or security of Central Asian states. However, Russia is inevitably apprehensive about China's economic expansion, especially given that China overtook Russia as Central Asia's number one trading partner in 2010. Furthermore, Russia is likely to be watching China's military modernisation programme with concern, as this will allow it to develop and project new capabilities in its border areas, including Central Asia.

Another important consideration is Russia's increasingly assertive stance in the former Soviet space. Recent events in Ukraine, and before that in Georgia, have been viewed by many as Russia seeking to reassert a dominant role in its former sphere of influence. The significance of Ukraine events for Central Asia should not be over-stated, but the repercussions may be far-reaching. Russia could potentially apply the same intervention logic – to protect ethnic Russians or identified Russian interests – to other states in its neighbourhood. This has caused unease in neighbouring regions, including Central Asia. Taken together with Russian attempts to engage the region in a closer economic embrace through the EEU, there are concerns that Russia will seek to reassert itself here too.

The AIIB represents a significant new element in the geopolitics around Central Asia. In some quarters, there are concerns about a new superpower axis between China and Russia – based on flourishing trade, growing military cooperation and shared geo-strategic interests. But equally their respective aspirations may set these two powers on an eventual collision course. Central Asia represents an important test-case. How the dynamics of China's economic expansion on one side of this fragile region and an increasingly assertive Russia on the other play out will shape the future of Central Asia and prospects for peace and stability.

In 2013-14 Saferworld undertook research into China's growing engagement in Central Asia, as well as the changing role of Russia. We analysed how this affects – and may affect in the future – the regional economic and security context. In a new report we consider how the relationship between Russia and China in Central Asia is likely to evolve – whether one of continued pragmatic cooperation or of increasing rivalry and possible conflict. The report launched today, in Chinese, Russian and English language versions, summarises the findings of Saferworld's research and the implications for peace and stability in Central Asia.

Read Central Asia at a crossroads

Ivan Campbell is Senior Conflict and Security Adviser at Saferworld. This blog post was originally published on the Saferworld website on 13 July 2015.