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.

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).

What are Russia's grand designs in Central Asia?

By David Lewis, University of Exeter, originally published on The Conversation

While international attention has focused on Russian military operations in Ukraine and Syria, Moscow has also been involved in a flurry of diplomatic and security initiatives to address the growing instability in northern Afghanistan.

But its moves to bolster regional security are more than just a response to local security concerns. Russia has a broader strategy that could leave it as the dominant security actor across much of Eurasia.

Even before the shock of the Taliban occupation of Kunduz in late September, Russian officials were concerned about the fragile security situation in northern Afghanistan, including the rise of Islamic State in northern Afghanistan and its potential spread to Central Asia and thence to Russia’s large Muslim community. As if to emphasise the domestic threat, on October 12 Russian police announced that they had uncovered a terrorist plot in Moscow apparently involving a group of Central Asian militants.

Insecurity in Afghanistan may pose a potential security threat for Moscow, but it is being seized upon as a major geopolitical opportunity. Against a backdrop of failed Western policies across much of Russia’s southern flank, Moscow is moving quickly to fill a security vacuum in the region. It is strengthening existing alliances to consolidate its hold over former Soviet republics in Central Asia and reshaping the security dynamics of the region around its own favoured security groupings – the Collective Security Treaty Organisation (CSTO) and the Shanghai Cooperation Organisation (SCO).

The first step has been a series of meeting with Central Asian leaders, all on the front line in case of renewed Afghan insecurity. A meeting between Russian president Vladimir Putin and Emomali Rakhmon, the president of Tajikistan, led to promises of more attack helicopters to bolster the existing Russian military based in the country, which has become the hub of a well-developed defence system against cross-border infiltration.

Crisis and opportunity

Putin also took time out of his birthday celebrations in Sochi to meet Almazbek Atambayev, the president of Kyrgyzstan, a country that has become the linchpin of Russia’s security strategy in the region. Until 2014 Kyrgyzstan hosted a US airbase, but as I explored in a recent paper, Russia has been remarkably successful in ousting the Americans and turning Kyrgyzstan into a dependable ally in the region.

If Tajikistan and Kyrgyzstan are relatively relaxed about an enhanced Russian military presence, the Uzbek president, Islam Karimov, is instinctively allergic to talk of renewed Russian influence and pulled out of the Russian-led CSTO in 2012.

Now the northern Afghan crisis offers an opportunity to bring Uzbekistan back into Moscow’s embrace. A delegation from the Russian MOD, led by deputy minister Anatoly Antonov, has recently paid the country its first high-level visit since 2007.

There was no coverage of the Russian visit in Uzbekistan’s heavily censored press. Instead, the newpapers led on a summit with neighbouring Turkmen president, Gurmanguly Berdymukhamedov. The two presidents both have serious security concerns about Afghanistan, but both want to manage them without Russian assistance. Both states have appalling human rights records, limiting the potential for Western aid, and it may be hard to refuse Russian offers of help if unrest grows along their borders with Afghanistan.

Friends reunited

Afghan officials have also been in Moscow, seeking assistance. Vice-president and Uzbek warlord, Abdul Rashid Dostum, has sought to revive old ties during a recent visit, also paying a side visit to the influential Chechen strongman Ramzan Kadyrov, to share experiences of “fighting terrorism”. If the Afghan situation worsens significantly, Dostum offers the potential for Moscow to build up a further band of loyal forces in the north of Afghanistan, in an effective re-run of its Taliban-era support for the Northern Alliance.

Other Afghan government officials attended a conference of SCO members and observers on Afghanistan in Moscow. The chief of Russia’s general staff, first deputy defence minister, Valery Gerasimov, took time out to give a speech that highlighted the failure of US policy in the Middle East, leaving little doubt that Moscow now sees Afghanistan through the same geopolitical prism as it frames Syria. Russian intelligence officials regularly claim that IS is part of a broader US plot to destabilise Central Asia and Russia from the south.

Still, there is no appetite for Russia to get involved in Afghanistan in the way it has in Syria. There are still bitter memories of the humiliating Soviet withdrawal from Afghanistan. But an anti-IS stance in the region provides Russia with the opportunity to consolidate its presence in Central Asia and become the centre of new alliances in the region – with SCO partners such as China, and with Iran – and to sponsor anti-Taliban and anti-IS forces in northern Afghanistan.

More intriguingly, some Russian officials see Moscow’s new strategic initiatives in Syria and Afghanistan as a chance to carve out a significant role in a wider region. State Duma speaker, Sergei Naryshkin, has been talking of a “Greater Eurasia”, linking Russia not only to former Soviet republics, but more widely to a range of allies in Syria, Iran, India and China.

This may be just another of Russia’s historical spatial fantasies for now, but in a rapidly changing international environment, Moscow will try to use its dominance in Central Asia as a first step towards shaping a new regional security order.

David Lewis, Senior Lecturer, Politics, University of Exeter

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

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.

What influences the returns to innovation policies in Rising Power economies?

By Yanchao Li, Maria Karaulova, Oliver Shackleton and Philip Shapira

In the arenas of science, technology and innovation, two of the world’s largest emerging economies – China and Russia – have placed great emphasis on seizing early opportunities to develop and exploit strategic emerging technologies. These technology and innovation policies are being implemented in the context of, and are indeed part of, the transformations of economic structures and other innovation system aspects in these two countries, including changes in institutional frameworks, governance approaches and actor roles. In our ESRC project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia we are building a conceptual framework to investigate the factors that influence the returns to technology and innovation policies in each of these countries.

There are multiple points of comparison between China and Russia, including a shared legacy of centrally planned regimes and more recently economic reforms and market orientations. Three decades ago, there were many similarities between the two countries in science and innovation. National economic shares of investment in science and outputs of scientific papers were comparable. In both countries, the Academies of Sciences dominated the institutional research landscape, while universities focused mostly on teaching. Large state companies occupied most of the major economic sectors, driven by goals of production. Particularly since the 1990s, both China and Russia have sought economic transformation with greater use of market incentives, and each has developed policies to modernize and reform science and innovation. Today, there are similarities in the strategic goals of their respective innovation policies – and both countries engage in active innovation policy learning from US and European models.

Nevertheless, it is evident that present day China and Russia now diverge significantly from each other in science and innovation system performance. China has undergone a striking transformation in R&D capabilities, greatly expanding the share of its economy spent on research, rising to one of the world’s leading source of scientific publications, developing a number of globally-recognized research universities, and seeing the emergence of innovation as a source of growth among larger companies and new entrepreneurial start-ups alike. In contrast, Russia has struggled to maintain its research infrastructure, particularly since the decline of the oil-fuelled economic growth of the early 2000s and the economic consequences associated with recent geo-political tensions. Overall, by almost all innovation indicators, Russia now lags. Yet, these differences between the two countries cannot be explained only by macro-level events. We also identify the importance of institutional and micro-level factors within innovation systems themselves. Our research frames the problem of micro-macro systemic interactions in an iterative way through which actor expectations and subsequent strategies shape innovation policy implementation processes in an institutional context – which, in turn, influences the next round of an expectations cycle and bears on whether trajectories follow path dependency or open up path plasticity (see Figure).



Our research draws on interviews with a wide range of innovation actors in China and Russia including established firms, new start-up enterprises, central and regional government officials, scientists, think tanks, and managers of science parks and incubators. We have used focus groups and workshop and conference engagements alongside individual and group interviews. We also draw on secondary data, such as organisational documentation, bibliometric sources, and other available statistical data. We have focused research on emerging technologies, such as nanotechnology and synthetic biology, so as to track developments through the lens of a leading-edge, high priority new technology.

While our research is ongoing, we do have some initial findings. Evident in both countries are factors of path dependency – including deep-rooted legacies of administrative behaviour and hierarchical top-down oversight that carry over from prior phases of central state planning. At the same time, path plasticity – where actors stretch institutional boundaries and more flexibly overcome constraints – is stronger in China. For example, while one Chinese research university we visited does not officially encourage faculty to form companies notwithstanding central government guidance to allow this, faculty are informally associated with start-up-companies, at times through their graduate students. Indeed, actor perception of plasticity (as seen in China) is conducive to entrepreneurship, while actor conformance to path dependencies can stifle such activities (in Russia).

The importance of plasticity is also seen in differences in openness to internationalization and mobility of scientific and entrepreneurial talent. While maintaining strategies of “innovation with Chinese characteristics,” science and technology in China has become much more open to international knowledge exchange. An example is the prominent role of returnees in the innovation process in China, bringing with them transnational experience and active linkages with international innovation and business communities. “Over the years, the government has invested a lot in education and sending students abroad,” commented one interviewee. “These graduates and returnees are gradually showing their contribution to the society.” Russia is more circumspect when it comes to internationalization. While many Russian scientists have moved to other countries, relatively few move back – in part because of differences in the availability of resources but also because it is often hard for returnees to be re-accepted, notwithstanding government policies to encourage return migration. Instead, the Russian approach has been to promote internationalisation through established collaborations with compatriot scientists abroad – this has been a feature of many international cooperation programmes in recent years, although one consequence is that Russia captures fewer domestic innovation spillover benefits from these international linkages.

There are differences in perceptions of the roles of respective government in innovation processes. Maintaining good relationships with government officials at all levels is de rigueur in China. Government linkages often lead to special status designations, tax incentives, and support for research and facilities for high technology enterprises. This can be the case too in Russia, but we also see the increased importance of intermediaries in facilitating communication, trust building, and access to resources. However, as trust in government institutions is low, private companies tend to abstain from government initiatives and policies, even eschewing available tax breaks for science-based enterprises. Quasi-governmental brokers serve as a buffer between the aggressive state and mistrustful companies. “We prefer to work with foundations rather than with the government,” one Russian small enterprise told us. Interestingly, some of these foundations are funded by government itself. Others are privately funded, although the status of some foundations established by private donors has now become uncertain in Russia. A current case involves the Dynasty Foundation – a sponsor of research, education, scientific prizes and exchanges founded by a wealthy Russian business philanthropist – which has fallen into difficulty with the Russian government. Here, a seemingly flexible initiative designed to overcome problems in state science support has encountered the limits of government tolerance in the current Russian system.

Overall, the innovation actors in these countries now have different expectations, as well as differences in access to resources and capabilities. In some cases, similar weaknesses are evident in both countries, for example in encouraging innovation-based collaborations between large and small firms. Yet, while combinations of flexibilities and rigidities are present in the institutional and governance frameworks of both China and Russia, the greater opportunities for path plasticity now available in China have helped significantly to improve its innovation performance outcomes.

Further work is continuing in our project through to September 2016 both to elaborate the conceptual framework and to develop evidence and insights from our field work and other analyses.

All authors are associated with the Manchester Institute of Innovation Research, Manchester Business School, The University of Manchester, UK, and the Project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia (ES/J012785/1). Yanchao Li is a Research Fellow, Maria Karaulova and Oliver Shackleton are doctoral students, and Philip Shapira is Professor of Innovation, Management and Policy. For further information, contact: yanchao.li@mbs.ac.uk

Law and finance in Russia: interview with Rilka Dragneva-Lewers, Larry King, and Sveta Borodina

At a workshop on Law and Finance in Rising Powers, held at the Centre for Business Research, University of Cambridge, Rilka Dragneva-Lewers (University of Birmingham), Larry King (University of Cambridge), and Sveta Borodina (University of Cambridge) presented their work on law and finance in Russia. In this podcast interview, they summarize their findings.

Rilka Dragneva-Lewers presented on the EUs influence on Company Law Reform in the Eastern Neighbourhood: 
“My main area of interest is the Ukraine, which stands out amongst the rest of the eastern European states in that it was probably the last country to reform its law on the books and it is of course in a state of very serious turmoil at the moment.

“The main approach of the EU has been to insist on legal approximation so it has pursued both integration and stimulating economic development through reform of the laws. But as we have seen this is definitely not enough and this external pressure has not been a critical factor, for legal change. Businesses manage to protect their property rights through various extra-legal ways through access to political power for example and protection.

“The difficultly with large businesses in Ukraine is that there are often run by holding companies and they are owned by oligarchs. This has meant that there has been a very strong business effort to keep transparency low and maintain the privacy of dealings. Transparency remains a critical issue in business dealings.

“At the EU level the economics is quite complex. The EU despite having had a very strong response to Russia’s policy in Ukraine with sanctions still suffers from a lot of disagreement with its member states because Russia’s approach of subsequently imposing its own sanctions against the EU has been divisive.”

Larry King, Professor of Sociology and Political Economy University of Cambridge spoke about 'The Governance Grenade, the Effect of Mass privatisation on Corporate Governance in Russia':
“There are many different ways to privatise and we looked whether how you privatise makes a big difference, for example how do you allow state owned enterprises to compete with other private firms? How do you allow domestic owners to emerge which then go on to privatise firms and which will probably have much better outcomes? This happened in Poland and much of Central and Eastern Europe, and here there is a big role for foreign investors. However, when you try to privatise everything at once, without waiting for domestic owners to emerge, or without inviting in competitive auctions involving foreigners, you have to embark on artificial privatisation.

“Rather than that being a corrupt process in itself, my argument was that it created corruption. It led to firm failure. Creating owners who had no capital, who had no expertise, who had no connections, and who couldn’t monitor firm insiders, created a perfect storm for firms to fail. Once they started to fail it created a fiscal crisis for the state as nobody was paying taxes.

“This led to a situation where firms were retreating from the market as state bureaucrats, who were already demoralised from the transition and were not being paid, were now ripe for corruption. What emerged in many of these countries, Russia or Ukraine, is a system of social property relations that were based on client type ties between political officers and captured businessmen who were what we call Oligarchs.

“Clearly these systems needed to change but Russia for example could have done what Poland did and it could have protected its domestic market and allowed competition to drive enterprise restructuring and reforms of the state but they tried to do everything at once and that led to disaster.

“In summary, you can’t really describe these countries as in transition from socialism to a market society, what you have is a new type of market society developing, one in which the relative separation of the political and the economic spheres is different. There is much less separation and to be in big business you also have to be in a political community in these countries.”

Sveta Borodina outlines her findings on law and finance in Russia:
“In Russia people tend to do business with their friends and acquaintances and there is also the concept of reputation so people know each other. They rely on law to formalise what they have agreed informally previously. Trust used to be the way of making deals but nowadays lawyers are getting involved at earlier stages and they look at the letter of the law before the signatures are put on the paper.

“People are starting to understand that if you lead your business according to the rules you are more secure you are safer and you will have more chances of keeping your business in case there is an attack from a hostile acquirer.

“I was very pleased to find that the micro side of the business is improving and that it has improved considerably and the technocrats are moving the country in the right direction but the trouble is that the political set up is in conflict with this forward movement. “

Listen to the full interview with Rilka Dragneva-Lewers, Larry King and Sveta Borodina

More podcasts from the workshop on Law and Finance in Rising Powers,
Centre for Business Research, University of Cambridge, December 9th 2014

China-Russia cross-border trade: podcast with Caroline Humphrey and Sayana Namsaraeva

At a workshop on Law and Finance in Rising Powers, held at the Centre for Business Research, University of Cambridge, Caroline Humphrey, Emeritus Professor of Social Anthropology, University of Cambridge, and Sayana Namsaraeva, Research Associate Department of Anthropology, University of Cambridge, presented their insights into trade across the Chinese-Russian border. In a podcast interview following the presentation, they give an overview of their research findings.

Summarising her research on 'Cross-Border E-trade and is Vicissitudes', Humphrey said: 
 “My paper was called e-trade between China and Russia and it was about the objective facts of how e-trade is taking place these days. One the one hand it is greatly encouraged and the relationships between China and Russia are getting much closer and this is a lovely high tech thing that could develop but on the other, in practice it has all sorts of problems.

“The problem is the big Chinese internet firms don’t accept payment from Russian banks and cards, and also the cheapest and best sites are in the Chinese language so they need interpreters to find out what the information is on those sites. They use mediators, middle men firms that have mushroomed up in Russia, and that helps them get access to the goods but it means that it is much more expensive for them and rather slow and cumbersome.

“I think there are some perils of trading. There are perils that the goods may be incorrectly described or that they arrive in the wrong quantity, that kind of thing, but there isn’t much come-back for the Russian consumer, the legal situation is not good at all. Deliveries from China to Russia have to go through several complicated ways of crossing the border and they have to pay big customs duties.

“You can send goods back if they are absolutely wrong in relation to what you ordered but if it is a minor issue, or it doesn’t look like it did in the catalogue, you certainly couldn’t. There is a certain amount of muddle, particularly in the Russian postal service that is coping with a gigantic numbers of parcels from all over the place, and things do often seem to get lost in there. Bribery is absolutely very common indeed particularly when crossing the borders.

“At the moment it is a punt if you want to buy something online and whether and how fast that will change is very difficult to say. But it is also exciting, because with the internet you have access to this huge range of goods and almost all of it produced in China.”

Namsaraeva described her work on 'The Effect of Exchange Rate Changes Post-Ukraine on Trans-border Trade between China and Russia':
“My research is on women border traders who do regular shuttle trade between Russia and China to buy things cheap and to sell dear on the Russian side.

“I think this kind of shuttle trade is very important for the local economies both for Russia and for China but at the same time, the border economy exists in the shadow economy of both countries.

“Border traders work in the professions in the week, they may be nurses, doctors, teachers but at the weekend they go to China and become shuttle traders to resell it. This is how they survive and how they support their families.

“The younger generation can go online and do this click and delivery thing but the elder generation that is not familiar with the internet still prefer to go to the real shop and touch and feel the real thing.
“Until recently border trade was also associated with tourism from Asia because as well as buying things they also spent quite a lot of time enjoying life in China, going shopping, eating out, visiting parks and saloons, and learning more about Chinese culture.

“Now there is a growing economic disparity between Russia and China, because once the Soviet Union was a very powerful regional super power State, but recently with China’s economic growth, the power balance has changed, and Russia has moved from being an older brother to the position of the younger sister.

“Nowadays people are really in an uncertain financial situation and with the devaluation of the Ruble they can’t plan their futures and because of this 40 per cent devaluation crossing border points are half empty. People need to save money in order to survive.“

Listen to the full interview with Caroline Humphrey and Sayana Namsaraeva


More podcasts from the workshop on Law and Finance in Rising Powers,
Centre for Business Research, University of Cambridge, December 9th 2014

Shareholder rights in Rising Powers: podcast interview with Gregory James and Mathias Siems

At a workshop on Law and Finance in Rising Powers, held at the Centre for Business Research, University of Cambridge, Gregory James, Senior Lecturer in Economics at Loughborough University, and Mathias Siems, Professor of Commercial Law at Durham University, presented work on shareholder rights in developed and developing countries. In a podcast interview following the presentation, they summarize their findings.

James said: “We looked at 30 Countries, both developed and developing economies, and the convergence of legal rights in these economies. Does convergence in company law lead to some convergence in legal systems, towards best practice?

“Interestingly, we found that in countries where you wouldn’t really expect it like Russia and China shareholder protection is good, at least on the books, compared to somewhere like Germany.

“We are using the CBR shareholder protection index and other research methods, and the interesting finding we have from the legal data was that all the countries were keen on improvement for shareholder protection. There seems to be a global trend in terms of fads and fashions for global rules protecting shareholders – that is interesting from a political economy perspective. We also found that while similar legal rules may flow across borders the operation of those rules is often quite different in practice. “

Siems said: “Rather than shareholder protection always being a good thing, it could be the other way round, it could be that legal systems that are less protective maybe advantageous - because you don’t need to be bothered by too much red tape. We could ask, do we really need to protect shareholders to the maximum? Is shareholder protection always good or may it be counter-productive in some circumstances?

“We don’t have a global law maker, we don’t have the UN regulating corporate governance or company law so we have to look to country level. Do we need global rules or will we see national standards becoming more uniform?”

Listen to the full interview with Gregory James and Mathias Siems

More podcasts from the workshop on Law and Finance in Rising Powers,
Centre for Business Research, University of Cambridge, December 9th 2014