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On January 13th of this year, President Trump abruptly ordered the termination of the U.S.-China EcoPartnership Program. Seven days before leaving office and without notice, Trump turned the lights off on this 10-year old program, pulling the rug out from under 36 committed and on-going bi-national projects to lower carbon-emissions at global scale.
The Biden Administration is assessing its options for re-vitalizing, in some shape or form, this model of innovative and impactful public-private collaboration to put a dent in global greenhouse gas emissions. This might involve replication of the program to India. ReGen250 is already in the starting gate with a U.S. Mid-Atlantic/State of Maharashtra candidate program should that take shape, as is described on pages 8-9 of our article published last month in the peer-reviewed science journal Environmental Progress and Sustainable Energy.
In the meanwhile, we are pressing forward with unofficial support from the two U.S. Government agencies which ran the EcoPartnership program for ten years — the U.S. Department of State and the U.S. Department of Energy — on a purely private and sub-national basis. Our goal in China looking forward is to explore the possibility of expanding from a regional effort (low-carbon collaboration between the U.S.-Mid-Atlantic and the Jing-Jin-Ji (京津冀) region of Beijing, Tianjin and Hebei Province to national scale.
How will we accomplish this without the direct support of the U.S. Government? The first step was to confirm the Biden Administration’s encouragement of trade with China in support of Paris Accord goals and then to renew our region-to-region BE Better program partnership with our primary partner in China, the TEDA EcoCenter. These steps were taken last quarter.
The next steps involve exploring prospects for the resumption of the Sino-U.S. Eco Park national-level opportunity with the Green Development League as outlined at the 2020 U.S.-China EcoPartnership Summit. (As described in detail in a prior post, the Green Development League comprises the 36 top-ranked NETDZs throughout China and the GDL Secretary-General is our original EcoPartnership partner (the TEDA EcoCenter and its Director Madame Yuyan Song).
As the exclusive U.S.-based working group member for the proposed Sino-U.S. Eco Park, China Partnership would leverage expertise and input from (1) our region-to-region BE Better program partners (experts in “energy-efficient, smart and healthy built environments” for industrial park users) as well as (2) our U.S.-China BEST Cities partners (with additional constituencies of support to include the U.S.-China Business Council, the U.S. Industry Advisory Board of the U.S.-China Clean Energy Research Center for Building Energy Efficiency (CERC-BEE), the National Governors Association, and the National League of Cities) in order to identify a comprehensive range of U.S. clean energy technologies and infrastructures from across eastern, central and western regions of the United States to be incorporated into the Sino-U.S. BE Better Eco Park model.

The primary impact of this milestone — CPGP’s formally joining the Green Development League’s working group for design of a Sino-U.S. Eco Park with scalability and replicability to multiple locations throughout China — is literally “to put the U.S. on the map” alongside eight other similar International Eco Parks already functioning in China under PRC Ministry of Commerce auspices. These eight other Eco Park projects represent mostly Sino-European collaborations (e.g., Sino-German Eco Park, Sino-Swiss Zhenjiang Eco Park, Sino-Austrian Eco Park, Sino-Finland Beijing Eco Park) and, to date, none represents a Sino-U.S. collaboration. The CPGP/U.S.-China BEST Cities model was selected, following the March 27, 2018 deadline for application, due to its unique structure of open collaboration designed to introduce U.S. urban clean energy infrastructures and technologies to TEDA and the 35 other top National Economic-technological Development Zones (NETDZ) in the Green Development League.
Using comparables drawn from the realized, real-world experience of the Sino-German Eco Park in Dalian but adjusted to account for the relatively greater GDP of the U.S., a Sino-U.S. BE Better Eco Park leveraging our EcoPartnership’s platform of energy-efficient, smart, healthy built environment and clean manufacturing for industrial park application should reasonably be expected to realize within its initial 5 years:
• As many as 300 signed project agreements (with nearly 60% of those either in production or under construction during that timeframe) representing total investment of 100 billion RMB (approx. USD 15 billion at today’s exchange rate)
• As many as 90 of these projects would be expected to fall in the high-end manufacturing and new energy field with total investment of 67.5 billion RMB (approx. USD 10 billion at today’s exchange rate)
• As many as 80 of these projects would be expected to fall in the advanced services sector with total investment of 35 billion RMB (approx. USD 5 billion at today’s exchange rate)
We are now actively exploring the most practical route for realizing this goal which would involve resumption, post-Trump Administration, of our primary partnership model with (a) TEDA, (b) the 36 GDLs and (c) the 219 NETDZs. Additionally, we have recourse to a secondary partnership model focused on the Jing-Jin-Ji/Xiongan New Area mega-development project.
With respect to the 35-year macroeconomic development effort ushered in by Deng Xiaoping and the Shenzhen and Pudong macro-development projects, Xiongan has both continuities and distinctive differences. One similarity is the size envisioned for the Xiongan New Area -– roughly 50% bigger than Pudong (east of Shanghai) and slightly larger than Shenzhen (to the north of Hong Kong). While Xiongan can be thought of as culminating the coastal progression of these macro-projects–- starting in the south with Shenzhen in the 1980s and moving to the central coast with Pudong in the 1990s -– the final, northern leg of this triad was wobbly at first. President Hu Jintao and Premier Wen Jiabao initially envisioned the third macro-project leg as being Binhai to the northeast of Tianjin. Post-2012, however, plans for Binhai lost most of their momentum and it was only with President Xi Jinping’s emergence in power that priority was shifted from Binhai to Xiongan. It is more in the discontinuities between Xiongan and the earlier Shenzhen and Pudong macro-projects that Xiongan’s significance can best be understood. The first 30 years of the PRC’s post-Cultural Revolution industrial development was based on a high-carbon model. (This is frequently referred to in China by the phrase 先污染后治理 meaning “pollute first, clean up (or remediate) later”). In contrast, the Xiongan industrial model championed by Xi Jinping focuses on a different set of values for the next 30-year-or-so phase of China’s development in the 21st century: the goals of (1) promoting and putting into practice low-carbon industrialization and sustainability innovations and (2) lessening social inequality and narrowing the gap between rich and poor in shared benefits of industrialization and economic development.
Among the few dozen officially-awarded U.S.-China EcoPartnerships, the PHL-TEDA EcoPartnership is unique in its design as an open platform to facilitate collaboration among businesses, local governments, universities and non-governmental organizations (NGO). On the U.S. side, the platform is anchored by China Partnership of Greater Philadelphia (CPGP, a 501c3 non- profit) and its public sector partner, the Commerce Department of the City of Philadelphia. The first stage of this collaboration has involved bringing sustainable-city-type BE Better technologies (built environment technologies that are more energy-effiient, smarter and healthier) to our EcoPartnership partner in Tianjin (TEDA). Our longer-term objective is to scale these BE Better technologies throughout China through the network of its national-level industrial parks. The initial stage of this scaling effort focuses on China’s northeastern Jing-Jin-Ji region (comprising Beijing, Tianjin and Hebei Province) through collaborations with Green Development League-member National Economic-Technological Development Zones (NETDZ) in Beijing, Tianjin and Langfang. The longer-term goal is to position for second-stage, nation-wide expansion of the BE Better model through the Green Development League’s 36 member- NETDZs nationwide and through the Ministry of Commerce’s national Eco Park program.

On January 13, 2021 — a scant week short of President-elect Biden’s inauguration — President Trump turned off the lights on this decade-old government-to-government program between the U.S. and China to advance climate change mitigation efforts in both countries. Nonetheless, the PHL-TEDA effort was always conceived as a private-sector driven effort and — with continuing legacy support from the U.S. Departments of Energy and State — we are advancing our BE Better program with our TEDA partner in China and exploring possible broadening of the program to the state of Maharashtra in India.

The complete story of where we have been and where we are going is presented in the attached peer-reviewed article published online earlier this month by the Wiley-owned journal Environmental Progress & Sustainable Energy. The print version of the article will be published in the next few weeks.
The full article can be read by clicking here or on the image below:
We encountered headwinds along the way — a fraudulent bid procurement, Trump’s announced intent to withdraw the U.S. from the Paris Accord, the Tariff War — but, by tacking and keeping our eye fixed on our destination, we have gotten to calmer waters and now have a following wind. Stay tuned for the next leg of the journey.
In July 1989, I was at my desk at the U.S. Consulate General Shanghai when I received a call notifying me that a small group of senior officials from the Shanghai Municipal Government would be coming for a meeting that afternoon. I was asked to make sure that the newly-arrived Consul General — Pat Wardlaw who had just replaced my first Consul General Charlie Sylvester earlier in the month — join the meeting.
A couple of things about this. First, you’ll note that a meeting wasn’t actually requested and that none of us were asked about our availability in the afternoon. We were instead informed that the group of government officials would be coming and we were simply expected to be available when they arrived. Second, anyone who has worked in China will notice something quite extraordinary about this phone call. We were not summoned, as is typically the case with Chinese government officials, to go meet with them at their offices. They were coming to us. This would be the only time in my working career in China when Chinese government officials came to us rather than vice versa.

A word of context. This phone call took place in the latter half of July, a month and a half after the June 4th Tiananmen incident. Roughly a week before June 4th, my wife Grace and I had left Shanghai on a one-month Home Leave, traveling first for one week vacation with my sister’s family on Kauai and then expecting to spend the remainder of our time in Philadelphia with family and with me traveling to Washington DC on consultations. As we transited San Francisco International Airport on June 4th to catch our onward flight to Philadelphia, there was a palpable tension in the air and we soon saw the near-identical banner headlines about Tiananmen in a row of vending machines along the terminal wall as we made our way to Passport Control.
I never got my homeleave or consultations in Washington. Secretary of State Jim Baker was determined to have his thumb on the pulse of decision-making by McDonnell-Douglas, 3M, Johnson & Johnson, Coca-cola and the other top U.S. investments in Shanghai. He knew it wouldn’t be reliable to just count on what he heard from the CEOs at U.S. headquarters. He wanted to know the calculus of decision-making that was taking place on the ground by the Shanghai-based executives in charge of the major U.S. investments in Shanghai. Having just landed in Philadelphia, I was given one-day to help Grace (early in her pregnancy with our older son Todd) get settled in and was instructed to then turn around and fly back to Shanghai to start providing anything I could learn from my business contacts in Shanghai in a series of classified cables.
So back to the July meeting. The Consulate guard (not a Marine because no U.S. military presence was allowed in China at that time) notified me that the government officials had arrived. I escorted the group of four or five officials into the ground-floor meeting room where a handful of my Consulate colleagues were waiting. One of the officials was just barely managing to carry a big armful of long paper rolls. They did not wait to be seated and didn’t begin with any pleasantries. The senior official simply took the first roll of paper handed to him, unrolled it on the conference room table and announced “This will be the new Pudong. We want you to report about Pudong to your government. We want Americans to invest and help develop it. They will make a lot of money.”
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Today’s post falls into the TEA Collaboratives’ A-Series of content dealing with PRC government planning Ambitions. Over the weeks and months ahead, I will have a chance to share insights developed through the Masters-level course (IMPA 608) which I taught at the University of Pennsylvania in the spring semester of 2019 and 2020. The focus of that course, based on Mandarin language research, is the forty-year trajectory of China’s macro-development planning vision and execution. Domestically, the trajectory of that storyline begins with Shenzhen in the early 1980s, continues smoothly through Pudong throughout the 1990s before encountering turbulence in Tianjin in the 2000s. Following 2012, the first stage of this macro-development model gets jettisoned and the second stage ignites with the twin megalopolis projects — the Consolidated Beijing-Tianjin-Hebei Project (‘Jing-Jin-Ji’ or 京津冀) in the northeast and the Guangdong-Hong-Kong-Macao Greater Bay Area Project in the southeast. Simultaneous with the unveiling and cranking up of this pair of Version 2 domestic macro-development projects over the last decade, China has also been systematically extending its macro-development model to its 139 international partners through the Belt & Road Initiative.
I look forward to sharing the insights gleaned from this multi-year, instructor-and-student knowledge co-creation effort in the TEA Collaborative’s A-series blogposts on Fridays over the remainder of the year. Understanding the vision and values driving the momentum of this forty-years macro-development effort helps chart where China is headed in the future. I hope this small, personal anecdote about Pudong’s emergence into China’s macro-development planning process serves as an apt way to kick off our Macro-Dev series.
On June 8th, the Biden Administration announced immediate actions it was taking to address near-term vulnerabilities in four critical supply chains as identified by a 100-day America’s Supply Chains assessment initiated in late February. The four critical supply chains included in this announcement are: semiconductor manufacturing and advanced packaging; large capacity batteries, like those for electric vehicles; critical minerals and materials (so-called “rare earths”) used in smart phones, electric vehicles, wind turbines and other advanced technologies; and pharmaceuticals and active pharmaceutical ingredients (APIs) used in vaccines and other applications.
Today’s post takes an initial high-level view of the critical supply chain for semiconductor manufacturing and examines the shifting fault-line of vulnerability. Subsequent posts in the Global TECHtonics series will take a much closer look at these and related issues.

Photo: barks/Adobe Stock
What is the Fault-line?
The semiconductor supply chain fault-line runs directly under Taiwan, whose chip foundries produce 92% of the world’s most advanced microchips (which have transistors less than one-thousandth the width of a human hair). The small island is caught between the tectonic forces of the China market (which accounts for 53% of global semiconductor consumption and the U.S. market (which accounts for the vast majority of the advanced designs on which Taiwan chip production is based). In addition to these market forces, political dynamics add to the stresses along this fault-line. While China claims Taiwan as an inalienable part of its territory, the U.S. has been serving as the guarantor of Taiwan’s de facto independence since 1949. In more recent years, the Trump Administration’s “Tariff War” against China has given impetus to a process of technology “de-coupling” which is forcing Taiwan companies – especially its preeminent foundry manufacturer Taiwan Semiconductor Manufacturing Company (TSMC) – to choose between the fast-growing China market (34% revenue growth since 2014) and its slower growing (4% growth) but highly strategic U.S. customers, including the U.S. military. The fact, for instance, that 14 of TSMC’s 17 foundries worldwide (and all of its foundries capable of higher-end production above the 16 nanometer level) are located in Taiwan at a distance of just 90 miles from the PRC mainland adds to the tectonic friction.
What is the Trend-line?
Subsequent posts in the Global TECHtonic series (approximately two per month) will examine a broad range of dynamics in detail to include the impact of the COVID-19 pandemic on global microchip supply chains, specific dynamics within microchip subproduct categories (logic chips, analog chips, memory chips, etc), TSMC’s strategic response to the increasing global pressure and detailed analysis of trends within the U.S. semiconductor industry. Today’s post will limit itself to two broad brush-strokes to suggest the general trend-line: (1) the twenty-year trend-line since 2001 and (2) the one-year trend-line since 2020.
- The accession of China and Taiwan to the World Trade Organization (WTO) in 2001 led to hopes that Information and Communications Technologies (ICT) supply chain tensions might start easing but, from 2008 at least, the opposite has proved true. Following the Global Financial Crisis, market forces and competitive tensions increased pressures on ICT supply chains markedly and these pressures further accelerated starting in 2012 following the 18th Chinese Communist Party Congress in 2012. (Readers interested in a deeper understanding of the ICT supply chain dynamics covering the period 2001-2008 can refer to Congressional Commission testimony I provided during the 107th, 108th and 109th Sessions of Congress as well as to my article in the edited volume Economic Integration, Democratization and National Security in East Asia (Peter Chow, Elgar Publishing) and my article in The Journal of Contemporary China (Volume 13, Number 40, 2006).
- The past year has shown some notable shifts along this fault-line. In Taiwan, policies instituted by President Tsai Ing-wen have led to a small shift in Taiwan’s trading dependence on China and to larger shifts in the pattern of outbound and inbound investment involving China. Specifically, the Tsai Administration’s New Southbound Policy has shifted a small portion of Taiwan’s trade in consumer electronics away from China in favor of Southeast Asian markets. More notably, the “Invest Taiwan” program has exceeded its targets and much of the reinvestment in Taiwan comes as a result of production being repatriated from the mainland. As for outbound investment from Taiwan in ICT sectors, recent trends favor the U.S. as a destination rather than China. In March 2020, TSMC announced that it would be building a $12 billion microchip production plant in Arizona. Meanwhile, tighter regulations by Taiwan’s Investment Commission has led to a 60% drop in outbound investment to the mainland since 2018.
It is for these and other reasons that the New York Times recently proclaimed “pound for pound, Taiwan is the most important place in the world.” The Strait of Hormuz may have been the world’s most dangerous fault-line in the 20th century oil economy. In the 21st century, the tectonic pressures of the global economy now converge on the Strait of Taiwan.
Henry “Hank” Paulson — former Chairman of Goldman Sachs, former Secretary of the U.S. Treasury and creator of the U.S.-China Strategic & Economic Dialogue — was in Philadelphia last Wednesday. He came to publicize his new book Dealing With China: An Insider Unmasks the New Economic Superpower.
The media frame for the talk and Q&A which he gave to the World Affairs Council of Greater Philadelphia was: ‘Hank, you’re a real patriot. Why are you helping China?”
In response, Hank Paulson was very clear that his interest in promoting a better understanding of China is rooted in his desire to do what is best for America.
You can read the full article here but, for the purposes of this post, I’m going to focus on one small, but important, piece of the big contemporary China puzzle: Is Xi’s ongoing crackdown (on corruption but also on foreign businesses, NGOs, press freedoms, social media, connectivity to the global knowledge-pool, etc) flashing green, yellow or red for China’s paramount challenge of rebooting its economy on a more sustainable basis?
China’s ‘old software version’ of infrastructure build-out, inbound investment and export of cheap stuff is clearly no longer operating smoothly on the new global hardware system. China’s future – and Xi Jinping’s for that matter – depends on a smooth updating to a ‘new software version’ of consumer-led spending, outbound investment and innovation up the product value-chain. Under any circumstances, that’s a tall-order to pull off in just a few years. For those of us who believe that helping China matters to America’s future, the key question is whether the crackdown on political thought in China is – or is not — inimical to the desperately needed surge of commercial innovation needed to upgrade China’s economy to version 2.0.
It is perhaps not entirely a coincidence that, in the same week that Hank Paulson was wrestling with this question in Philadelphia, so were two other leading experts on the trajectory of China’s globalization elsewhere: Shaun Rein and Tom Friedman in respective articles. If Hank Paulson occupies the pivot point as a U.S. patriot committed to helping China, Shaun Rein is a self-acknowledged China booster and Tom Friedman a “color me dubious” observer of China’s steep road ahead to globalization.
Here’s what each of them has had to say over the past week on the ‘sword of Damocles’ question facing Xi and China: crackdown or start-up? (Click on the name below in order to source the original publication from which the following excerpts are taken):
“Paulson believes the Communist Party has reached a simple accord with the Chinese people: prosperity in return for continued state control. The question, of course, is whether China can have it both ways – economic freedom without cultural freedom, a subject I raised with Paulson at the World Affairs Council.
‘In today’s information economy, I don’t know how economies can innovate and do the sorts of things they do to stay on top without having a free flow of ideas and information,” Paulson replied. “I’ve run a global company, and, boy, you need to be connected. You can’t have an Internet that’s not connected. You need to know what’s going on politically, regulatory systems, economically, in terms of ideas all over the world.’
He added: ‘But understand what’s going on right now. Xi Jinping . . . is focusing on the things that the people care about the most. So, corruption. He recognizes the party won’t survive unless he curbs corruption. So he’s focused on corruption, the environment, dirty air, and water.’
“So . . . managing China, just think what it’s like because they have to deal with the kinds of issues that afflict developed countries at the same time they have to deal with issues that developing countries are dealing with because a big part of the country is still poor. It would be like, . . . looking at Europe, Germany and Slovenia. They are both European, vastly different stages of development, they need different economic policies. So think about managing both of those in a single country under one party, and I mean that’s sort of the challenge.’”
“China´s much needed anti-corruption drive has now put the country into a lock-down mode, and new projects have halted,” tells business analyst Shaun Rein at CNBC. “The cut in the reserve ratio ratio (RRR) this weekend is one way for a kickstart, although nobody know what will really work.”
China Herald: “What does the Chinese market need to stimulate the economy and if this growth continues to disappoint then would you expect an additional benchmark rate cut in the next couple of quarters, something that many experts are now talking about?”
Rein: “I think what we need to look at is not gross domestic product (GDP) growth but we need to take a look at unemployment and the second reason why I am more concerned about the economy is in the last month urban unemployment has been hovering around 5 percent – that’s really a problem. So the unemployment rate in areas of manufacturing are still fairly strong and you can easily stimulate that by forcing state owned enterprises to do heavy investment; train construction, airport construction and you can get jobs there but the issue is urban unemployment is weak and there aren’t a lot of easy remedies. The government is trying to switch from manufacturing oriented economy more towards one of technology and innovation as I outlined in my new book ‘The End of Copycat China’ but it is not easy to do that. You cannot get companies that are producing things all a sudden to become innovators, so there is definitely going to be some weakness, some problems in the economy over the next three-four months and frankly there are no easy answers on how they stimulate the economy.”
“Americans … are asking of President Xi: “What’s up with you?” Xi’s anti-corruption campaign is clearly aimed at stifling the biggest threat to any one-party system: losing its legitimacy because of rampant corruption. But he also seems to be taking out potential political rivals as well. Xi has assumed more control over the military, economic and political levers of power in China than any leader since Mao. But to what end — to reform or to stay the same?
“Xi is “amassing power to maintain the Communist Party’s supremacy,” argued Willy Wo-Lap Lam, author of “Chinese Politics in the Era of Xi Jinping: Renaissance, Reform or Retrogression?” Xi “believes one reason behind the Soviet Union’s collapse is that the party lost control of the army and the economy.” But Xi seems to be more focused on how the Soviet Union collapsed than how America succeeded, and that is not good. His crackdown has not only been on corruption, which is freezing a lot of officials from making any big decisions, but on even the mildest forms of dissent. Foreign textbooks used by universities are being censored, and blogging and searching on China’s main Internet sites have never been more controlled. Don’t even think about using Google there or reading Western newspapers online.
“But, at the same time, Xi has begun a huge push for “innovation,” for transforming China’s economy from manufacturing and assembly to more knowledge-intensive work, so this one-child generation will be able to afford to take care of two retiring parents in a country with an inadequate social-safety net.
“Alas, crackdowns don’t tend to produce start-ups.
“As Antoine van Agtmael, the investor who coined the term “emerging markets,” said to me: China is making it harder to innovate in China precisely when rising labor costs in China and rising innovation in America are spurring more companies to build their next plant in the United States, not China. The combination of cheap energy in America and more flexible, open innovation — where universities and start-ups share brainpower with companies to spin off discoveries; where manufacturers use a new generation of robots and 3-D printers that allow more production to go local; and where new products integrate wirelessly connected sensors with new materials to become smarter, faster than ever — is making America, says van Agtmael, “the next great emerging market.”
“It’s a paradigm shift,” he added. “The last 25 years was all about who could make things cheapest, and the next 25 years will be about who can make things smartest.”
President Xi seems to be betting that China is big enough and smart enough to curb the Internet and political speech just enough to prevent dissent but not enough to choke off innovation. This is the biggest bet in the world today. And if he’s wrong (and color me dubious) we’re all going to feel it.”