Sino-Japanese Relations: Issues for U.S. Policy

By Emma Chanlett-Avery, Kerry Dumbaugh, William H. Cooper on December 19, 2008

After a period of diplomatic rancor earlier this decade, Japan and China have demonstrably improved their bilateral relationship. The emerging detente includes breakthrough agreements on territorial disputes, various high-level exchanges, and reciprocal port calls by naval vessels. Over the past ten years, China-Japan economic interdependence has grown as trade and investment flows have surged. China-Japan economic ties serve as an anchor for the overall bilateral relationship and have become the center of a robust East Asian trade and investment network. On the other hand, military strategists on each side remain wary of each other’s motives. This report surveys the state of China-Japan relations and their potential impact on U.S. policy in East Asia.

Embed Code: 
View the PDF on Document Cloud
Peony Lui
Topics: 
Economy
History
Politics
Keywords: 
Trade
Foreign Direct Investment
Regional Politics
Organization: 
Congressional Research Service

An Asian Star Is Born

By Christian Caryl on December 18, 2008

Ian Buruma’s life would itself make a nice subject for a novel. His father was Dutch; his mother was British, from a family that emigrated from Germany in the nineteenth century; as an undergraduate in the Netherlands he focused on Chinese literature, then moved to Tokyo, where he turned himself into an expert on Japanese cinema. He went on to work in Hong Kong, London, Budapest, and Berlin. He has written about everything from yakuza tattoos to V.S. Naipaul to the ideological pedigree of Islamism.

Hong Kong SAR Economic Integration With the Pearl River Delta

By Hongyi Chen and Olaf Unteroberdoerster on December 1, 2008

Hong Kong SAR's economic integration with the Mainland has primarily taken place in the Pearl River Delta (PRD). Taking stock of integration trends, this paper discusses key implications for ensuring economic benefits of further integration are sustained and associated costs minimized. Besides further investments in infrastructure, Hong Kong SAR's role as a producers services and finance hub will depend on frictionless movements of goods, services, people and know-how, requiring policy coordination to further promote trade and investment and developing a common human skills base with the PRD. Regional cooperation will also be needed to minimize the costs of rising levels of cross-border pollution.

Embed Code: 
Topics: 
Economy
Keywords: 
Economic Integration
Pearl River Delta
Organization: 
International Monetary Fund (IMF)

The Impact of Introducing a Minimum Wage on Business Cycle Volatility: A Structural Analysis for Hong Kong SAR

By Nathan Porter and Francis Vitek on December 1, 2008

We study the impact of a minimum wage on business cycle volatility, depending upon its coverage and adjustment mechanism. As with other small open economies, Hong Kong SAR is vulnerable to external shocks, with its exchange rate regime precluding active monetary policy. Adjustment to past shocks has relied on flexible domestic prices. We find that a minimum wage affecting 20 percent of employees would amplify output volatility by 0.2 percent to 9.2 percent, and employment volatility by 1.2 percent to 7.8 percent. A fixed wage or indexation to consumption price inflation increases volatility most. Indexation to wage inflation or unit labor cost growth is preferable, largely preserving labor market flexibility.

Embed Code: 
Sara Segal-Williams
Topics: 
Business
Economy
Keywords: 
Labor
Wages
Organization: 
International Monetary Fund (IMF)

An Unbreakable Cycle: Drug Dependency, Mandatory Confinement, and HIV/AIDS in China's Guangxi Province

By on December 1, 2008

This paper focuses on issues of drug rehabilitation practices in China. Chinese law dictates mandatory rehabilitation for drug users. Every year tens of thousands of drug users are sent—without trial or due process of law—to mandatory drug treatment centers, where they often stay for years. The report claims that in these centers, patients are denied medical treatment and are put to hard labor without compensation. It concludes that Chinese government’s failure to provide effective treatment and medical treatment goes contrary to China’s stated goal of HIV/AIDS prevention, and violates drug users' human rights.

Embed Code: 
Topics: 
Health
Keywords: 
Drug Treatment
HIV/AIDS
Human Rights
Organization: 
Human Rights Watch

The Macroeconomic Impact of Healthcare Financing Alternatives: Reform Options for Hong Kong SAR

By Dennis Botman and Nathan Porter on December 1, 2008

With much healthcare publicly funded, Hong Kong's rapidly aging population will significantly raise fiscal pressure over coming decades. The authors ask what the implications are of meeting these costs by public funding, or private funding voluntarily or through mandates. Their simulations suggest that without early reform, these costs quickly become unsustainable. Prefunding is key. Whether this is done through the public system or through mandatory private provision is less important. Voluntary schemes are likely to result in insufficient savings without tax incentives. Even then, voluntary accounts are unlikely to yield better macroeconomic outcomes, while mandates tend to produce more equitable consumption.

Embed Code: 
Topics: 
Economy
Keywords: 
Aging Population
Health Care
Hong Kong
Organization: 
International Monetary Fund (IMF)