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Following the 2021 Taihe Civilizations Forum, the Taihe International Communications Center hosted an online discussion on October 8 that captures the candid and profound reflections of senior officials whose actions have shaped the course of ties between China and the United States.

Dr. Thomas Fingar, Shorenstein APARC Fellow in the Freeman Spogli Institute for International Studies at Stanford University, former Chairman of the National Intelligence Council, and former Assistant Secretary of State, and Senior Colonel Zhou Bo (ret.), Senior Fellow at Center for International Security and Strategy at Tsinghua University, China Forum Expert, and former Director of Center for Security Cooperation of the Office for International Military Cooperation of Ministry of National Defense, were invited to join this dialogue.

During their conversation, Dr. Fingar and Senior Colonel Zhou exchanged ideas on important topics such as the current state of China-U.S. relations, the future development of the two countries' bilateral ties, the rationale behind the US foreign policy and the American alliance system, as well as the "extreme competition" that China and the U.S. are trapped in. 

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A Dialogue between Dr. Thomas Fingar and Senior Colonel Zhou Bo (ret.) on the Current State of China-U.S. Relations
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Thomas Fingar
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Taiwan. Hypersonic missiles. The South China Sea. In the last few months, China’s activities have grabbed headlines and fueled speculation about its intentions. But how much of this action is posturing, and how much should U.S. policymakers and strategists take seriously?

To help explain what’s going on with our biggest competitor, FSI Center Fellow Oriana Skylar Mastro, a specialist on China’s military and an active member of the United States Air Force Reserves, joins Michael McFaul on World Class to debunk some of the myths that persist about China’s capabilities and reframe how the U.S. needs to think about strategic competition with Beijing. Listen to their full episode and read highlights from the conversation below.

Click here for a transcript of “We Need To Rethink Our Assumptions about China’s Strategic Goals”

Where China Was in the 1990s


Twenty years ago, the Chinese-Taiwan invasion plan was to take a couple of fishing vessels and paddle their way across the strait. In the 1990s, China had very limited, and often no ability to fly over water, or at night, or in weather, and their ships had no defenses.

For many, many years we knew that China was willing to fight if Taiwan declared independence. Fighting a war in any country that is big and resolved is problematic. But it was never the case that the United States was going to lose that war; it was always a matter of, “How many days?” How many days is it going to take us to win?

Where China Is Now


In the intervening years, China's military has changed both quantitatively and qualitatively. Now they have the largest navy in the world, and those ships are some of the most advanced surface ships that can be comparable to those of the United States. Same with their fighters; they have fifth generation airplanes and the largest airforce in the region. They’ve put all these capabilities online, and at the same time, they [have also] started developing capabilities to reach out and touch the United States with.

They developed the capability to hit moving ships at sea, which is something the United States doesn’t have the capability to do. They have a huge cruise and ballistic missile program that basically can take out a U.S. base like Kadena  in the region in a matter of hours, should they ever be willing to make a direct hit on the U.S.

This doesn't mean that China is more powerful than the United States; China still can’t project power outside the Indo-Pacific region, and even there it’s mostly through space, cyber, and nuclear weapons. But most of the contingencies we're talking about are really close to China, so it doesn’t really matter that they can’t project power. So, on the conventional side, I’m very concerned.

Why Taiwan Matters


The whole goal of the Communist Party, since its founding in 1949, has been to resolve this Taiwan issue.

Now they have the ships, the aircraft, and they’ve reorganized their whole military so that they can do joint operations, so that the navy and the air force can do an invasion of Taiwan. And a lot of those efforts came to a successful conclusion at the end of 2020. And that's why people like myself, not because of  the capabilities, but because when I was in Beijing and talked to the Chinese military and government officials, they said, “We could do this now, and maybe we should think about it.”

We know from behavioral economics that countries and people are much more willing to take risks to not lose something that they think is theirs, versus when they are trying to get something which they don't think is theirs. In the Chinese mindset, Taiwan, the South China Sea, East China Sea, etc. is already theirs, and the United States is trying to take it from them. That makes the situation even more problematic. 

What the United States Should Do


The Biden administration is doing a lot of political maneuvering to show that the United States is willing to defend Taiwan. And I think it’s just upsetting Beijing, because they think we’re changing the political status quo. It also does nothing to enhance our deterrence, because it doesn't signal anything about our capability to defend Taiwan.

The Chinese basically assume the United States will intervene. Their big question is, can they still win? We need to show China that they cannot win, and that’s about showing out capabilities in the region. It’s about aggressively negotiating new host arrangements, more access for the U.S. military, and new international institutions and treaties that constrain the ways China leverages power.

I'm a military person, but I'm totally on board with leading with diplomacy. But I don't see those types of efforts coming out of the Biden administration. They seem to want to double down and do the same things, just with more allies and partners.  I'm supportive of it, but I just don't think it's enough.

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The Taiwan Temptation

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Oriana Skylar Mastro testifies to the U.S.-China Economic and Security Review Commission on Taiwan deterrence.
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Oriana Skylar Mastro Testifies on Deterring PRC Aggression Toward Taiwan to Congressional Review Commission

China may now be able to prevail in cross-strait contingencies even if the United States intervenes in Taiwan’s defense, Chinese security expert Oriana Skylar Mastro tells the U.S.-China Economic and Security Review Commission. Changes must be made to U.S. military capabilities, not U.S. policy, she argues.
Oriana Skylar Mastro Testifies on Deterring PRC Aggression Toward Taiwan to Congressional Review Commission
Taiwan Wall
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Would the United States Come to Taiwan's Defense?

On CNN's GPS with Fareed Zakaria, APARC Center Fellow Oriana Skylar Mastro shares insights about China's aspirations to take Taiwan by force and the United States' role, should a forceful reunification come to pass.
Would the United States Come to Taiwan's Defense?
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Chinese military propaganda depicting the Second Taiwan Strait Crisis of 1958.
Chinese military propaganda depicting the Second Taiwan Strait Crisis of 1958. | Getty Images
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On the World Class podcast, Oriana Skylar Mastro argues that in order to set effective policy toward China, the United States needs to better understand how and why China is projecting power.

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Drawing on insights from recent economic theories of incomplete contracts, we develop a theoretical model on authority relationships in the Chinese bureaucracy by conceptualizing the allocation of control rights in goal setting, inspections, and provision of incentives among the principal, supervisor, and agents. Variations in the allocation of these control rights give rise to different modes of governance and entail distinct behavioral implications among the parties. The proposed model provides a unified framework and a set of analytical concepts to examine different governance structures, varying authority relationships, and the specific principal-agent problems entailed in a bureaucratic setting. We will illustrate this through a case study of authority relationships and ensuing behavioral patterns in the environmental protection arena over a five-year cycle of policy implementation.

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The China Journal
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Xueguang Zhou
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At the initial epicenter of the COVID-19 pandemic, the Chinese governments, both central and local, responded to the outbreak in Wuhan, with the drastic measure of the lockdown of the entire city of 11 million residents. The moment of organizational response to crisis crystallized the fundamentals of Chinese bureaucracy, its bureaucratic processes, dispositions, and mentalities, as it had to haphazardly patch together segments of formal and informal practice for mobilization. In this commentary, I reflect on what we have learned about Chinese bureaucracy in this dramatic episode.

As China and many other countries are now facing the aftermath of the pandemic and adapting to a significantly changed global environment, organizational resilience moves to the center of attention. Making sense of the characteristics of the Chinese government helps us better understand the potential for organizational resilience in the post-pandemic era. We look into the past in order to better understand what lies ahead.

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Management and Organization Review
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Xueguang Zhou
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Chinese bureaucracy, with its long history and distinctive characteristics, has provided the organizational basis of governance and played a pivotal role in the economic takeoff in recent decades. Chinese bureaucracy also shows intriguing dualism between entrepreneurial activism and bureaucratic inertia, between formal rules and informal institutions, and between high responsiveness and noticeable loose coupling.

This study explores these distinctive features of Chinese bureaucracy through three lenses: Weber's comparative-historical approach helps locate Chinese bureaucracy in a distinct mode of domination; the Confucian lens identifies the prevalence of informal institutions that underlie bureaucratic behaviors; and the Marchian lens sheds light on the organized anarchy and set of mechanisms that shape the key characteristics of Chinese bureaucracy.

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Management and Organization Review
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Xueguang Zhou
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Callista Wells
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On October 21, 2021, the APARC China Program had the opportunity to host Peter Martin, Defense Policy and Intelligence Reporter for Bloomberg News, for a program on Chinese displomacy. In honor of his recently released book, China's Civilian Army: The Making of Wolf Warrior Diplomacy, Mr. Martin gave us a deep dive into the origins of this contentious diplomatic style and what it tells us about domestic politics in China. The panel was moderated by Professor Jean Oi, William Haas Professor of Chinese Politics and director of the APARC China Program.

As many who follow Chinese politics will be aware, Chinese diplomacy in the past several years has become increasingly assertive and its diplomats have used sharper language. Based on Chinese action movies of the same name, this pointed style of communication has earned these diplomats the title "wolf warriors." Some of the more stand-out examples of wolf warrior diplomacy include China’s Ministry of Foreign Affairs spokesperson Zhao Lijian's claim that COVID-19 was actually created by the United States, or the uncomfortable exchange between American and Chinese diplomats at the US-China Alaska summit in March, 2021.

In this program, Mr. Martin traced the roots of China's approach to diplomacy back to the communist revolution of 1949 and told the story of how it has evolved through social upheaval, famine, capitalist reforms, and China's rise to superpower status. His book draws on dozens of interviews and--for the first time--on the memoirs of more than 100 retired Chinese diplomats. The program was followed by a robust Q&A session between Mr. Martin and the audience. Watch now: 

For more information about China's Civilian Army: The Making of Wolf Warrior Diplomacy or to purchase a copy, please click here.

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Engaging China: Fifty Years of Sino-American Relations

Was the strategy of engagement with China worthwhile? Experts Mary Bullock, Thomas Fingar, David M. Lampton, and Anne Thurston discuss their recent release, "Engaging China: Fifty Years of Sino-American Relations."
Engaging China: Fifty Years of Sino-American Relations
Xi and Biden
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Biden, Xi Will Want To Diminish Exaggerated Characterizations of Bilateral Friction, Stanford Scholar Says

In this Q&A, Stanford scholar Thomas Fingar discusses what to expect when President Biden meets with Chinese President Xi Jinping.
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America's Future in Taiwan

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Peter Martin discusses the advent of Wolf Warrior Diplomacy in Chinese politics — is it really such a new phenomenon after all?

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On October 6, 2021, the APARC China Program hosted the panel program, "Engaging China: Fifty Years of Sino-American Relations." In honor of her recently released book of the same title, Director of the Grassroots China Initiative Anne Thurston was joined by contributors Mary Bullock, President Emerita of Agnes Scott College; Thomas Fingar, Shorenstein APARC Fellow; and David M. Lampton, Professor Emeritus at Johns Hopkins School of Advanced International Studies (SAIS). Thomas Fingar also moderated the panel.

Recent years have seen the U.S.-China relationship rapidly deteriorate. Engaging China brings together leading China specialists—ranging from academics to NGO leaders to former government officials—to analyze the past, present, and future of U.S.-China relations.

During their panel, Bullock, Fingar, Lampton, and Thurston reflected upon the complex and multifaceted nature of American engagement with China since the waning days of Mao’s rule. What initially motivated U.S.’ rapprochement with China? Until recent years, what logic and processes have underpinned the U.S. foreign policy posture towards China? What were the gains and the missteps made during five decades of America’s engagement policy toward China? What is the significance of our rapidly deteriorating bilateral relations today? Watch now: 

For more information about Engaging China or to purchase a copy, please click here.

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Xi and Biden
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Taiwan
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USS Key West during during joint Australian-United States military exercises Talisman Sabre 2019 in the Coral Sea.
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Was the strategy of engagement with China worthwhile? Experts Mary Bullock, Thomas Fingar, David M. Lampton, and Anne Thurston discuss their recent release, "Engaging China: Fifty Years of Sino-American Relations."

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China has been making efforts to establish a universal health care coverage system through multiple social health insurance schemes. As these insurance schemes cover different populations with different financing and reimbursement levels, large disparities remain in health care access and health outcomes among people covered. The government has launched an urban-rural integration policy for social health insurance to reduce disparities in access and health outcomes. We adopt a difference-in-differences propensity score matching approach to estimate the effects of this integration policy on health care utilization, financial risk protection, and health status, using nationally representative Chinese household survey data.

The results show that the integration policy has significantly improved the financial risk protection and self-assessed health of rural residents in China, which could be attributed to a decline in out-of-pocket payment. The low-income rural residents benefit most from this policy. There is no evidence that it has pronounced effects among urban residents. Greater efforts to increase reimbursement rates and to expand beneficiary populations could help to mitigate remaining urban-rural disparities. The findings in this study would contribute to a better understanding of the impacts of health insurance expansion in low- and middle-income countries.

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Impact on Health Care Utilization, Financial Risk Protection, and Health Status
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Applied Economics
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Karen Eggleston
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Noa Ronkin
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While the coronavirus pandemic has captured the world’s attention, non-communicable chronic diseases (NCDs) such as hypertension, heart diseases, and diabetes continue to be the leading cause of mortality worldwide, accounting for about two-thirds of deaths globally. Their financial and social burden is also immense, as individuals with chronic diseases face high medical spending, limited ability to work, and financial insecurity. Primary health care (PHC) is a crucial avenue for managing and preventing chronic diseases, yet many health systems, especially in low- and middle-income countries (LMICs), lack robust primary health care settings. How can policymakers improve PHC to reduce illness and death from chronic diseases?

There is little rigorous evidence from LMICs about the effectiveness of programs seeking to improve the capacity of PHC for controlling chronic disease. Now a new study, published by the Journal of Health Economics, helps fill in this gap. It offers empirical evidence on China’s efforts to promote PHC management, showing that better PHC management of chronic diseases in rural areas can reduce spending while contributing to better health. We sat down with APARC’s Asia Health Policy Program Director Karen Eggleston, one of the study co-authors, to discuss the research and its implications beyond China. Watch:

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Challenges for Primary Health Care Services

China, a large and rapidly developing middle-income country with a hospital-based service delivery system for its aging population, makes a suitable case study of efforts to promote PHC management. Over the past several decades, PHC use in China has significantly decreased relative to hospital-based care. This trend is a natural consequence of the country’s unprecedented increases in living standards and improvements in financial risk protection, which increase patients’ demand for quality care and spur self-referral to providers with higher-perceived quality like hospital outpatient departments.

The performance differences between PHC and hospital-based care are especially stark in China’s rural areas, where management of chronic diseases relies heavily on grassroots physicians, who have limited medical education and training. That is why Eggleston and her colleagues set out to provide new empirical evidence about the effectiveness of a program that promotes PHC management of hypertension and diabetes for rural Chinese. Part of the National Basic Public Health Service Program for rural Chinese, it financially rewards PHC grassroots physicians for managing residents with chronic diseases.

Collaborative Research in the Era of Great Power Competition

Eggleston’s co-authors include her colleagues at the Zhejiang Provincial Center for Disease Control and Prevention (Zhejiang CDC). Their study is the culmination of Eggleston’s multiyear collaborative research project with the Zhejiang CDC team, "Addressing Health Disparities in China," which looks to Tongxiang county in Zhejiang as a case study of China's responses to healthcare inequalities and population aging challenges in rural and urban areas. The project also involved two Stanford doctoral students who worked with Eggleston.

The team worked together to develop the quantitative analysis even during a time of sometimes-tense bilateral relations. “We found it very important to be able to communicate directly and collaborate on an important question not only for rural China but for many other parts of the world,” says Eggleston.
Karen Eggleston speaking to staff at Zhejiang Provincial CDC, China
Eggleston with her colleagues at the Zhejiang CDC during a field visit in 2018.

“This kind of collaboration, where we utilize the data that's available to answer an important question while respecting the privacy of the individuals and hopefully delivering benefits to them through more effective or affordable programs in the future perhaps is a promising model for researchers here and elsewhere to undertake,” she notes.

Disentangling the Effect of Primary Health Care Management

To study the program’s effectiveness, the researchers assembled a unique dataset linking individual-level administrative and health information between 2011 and 2015 for rural Chinese diagnosed with hypertension or diabetes in Tongxiang, a mostly rural county of Zhejiang province in southeast China. Collected by the Tongxiang CDC and Zhejiang CDC, the compiled database links basic demographic information, health insurance claims, PHC service logs, and health check-up records — four sets of data that are rarely linked and analyzed in combination in China healthcare research.

Focusing on neighboring border-straddling villages allows us to use only variation in PHC management within pairs of neighboring villages to identify the effect.
Karen Eggleston

Targeting the program’s effects on healthcare utilization, spending, and health outcomes, Eggleston and her colleagues compare residents in neighboring villages that straddle township boundaries. These residents are similar in their individual and environmental characteristics that shape health care use but are subject to different PHC management practices. This “border sampling” allows the researchers to disentangle the effects of PHC management from other underlying spatial differences that impact health care utilization. For each township, the researchers use a management intensity index that reflects the cumulative efforts of PHC physicians to screen their communities and keep patients within the PHC management programs for controlling hypertension and diabetes. Each township’s experience with PHC management over the 5-year study period is thus a case study for rural China.

Net Value in Chronic Disease Management

The results are encouraging for China's investment in primary care management of chronic diseases. Eggleston and her colleagues find that patients residing in a village within a township with more intensive PHC management had a relative increase in PHC visits, fewer specialist visits, fewer hospital admissions, and lower spending compared to neighbors with less intensive management. They also tend to have better medication adherence and better health outcomes as measured by blood pressure control.

If we can gradually scale up these kinds of effective programs at primary care then we can build more resilient, cost-effective, affordable health care systems for populations in many different settings.
Karen Eggleston

The results suggest that PHC chronic disease management in rural China improves net value in multiple ways — increasing PHC utilization, reducing avoidable hospitalizations, decreasing medical spending, and improving intermediate- and long-run health outcomes — all while leveraging existing resources rather than restricting care.

The findings also help inform investments in primary health care in LMICs. They highlight the latent potential of frontline healthcare workers in such settings to be more productive and show that financially rewarding these grassroots workers for managing residents with chronic diseases helps improve health outcomes. Moreover, they offer empirical evidence that supports the effectiveness of chronic disease management programs as part of broader regional initiatives to address population health.

Read the study by Eggleston et al

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A parent holds a child waiting to be given an infusion at an area hospital in China.
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In China, Better Financial Coverage Increases Health Care Access and Utilization

Research evidence from China’s Tongxiang county by Karen Eggleston and colleagues indicates that enhanced financial coverage for catastrophic medical expenditures increased health care access and expenditures among resident insurance beneficiaries while decreasing out-of-pocket spending as a portion of total spending.
In China, Better Financial Coverage Increases Health Care Access and Utilization
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A New Validated Tool Helps Predict Lifetime Health Outcomes for Prediabetes and Type 2 Diabetes in Chinese Populations

A research team including APARC's Karen Eggleston developed a new simulation model that supports the economic evaluation of policy guidelines and clinical treatment pathways to tackle diabetes and prediabetes among Chinese and East Asian populations, for whom existing models may not be applicable.
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Robotics and the Future of Work: Lessons from Nursing Homes in Japan

On the Future Health podcast, Karen Eggleston discusses the findings and implications of her collaborative research into the effects of robot adoption on staffing in Japanese nursing homes.
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 A woman at a desk in a village medical clinic in China.
A village medical clinic in China. | Marie Anna Lee, University of the Pacific, CC BY-NC-ND
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Empirical evidence by Karen Eggleston and colleagues suggests that better primary health care management of chronic disease in rural China can reduce spending while contributing to better health.

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Health systems globally face increasing morbidity and mortality from chronic diseases, yet many — especially in low- and middle-income countries — lack strong chronic disease management in primary health care (PHC). We provide evidence on China’s efforts to promote PHC management using unique five-year panel data in a rural county, including health care utilization from medical claims and health outcomes from biomarkers. Utilizing plausibly exogenous variation in management intensity generated by administrative and geographic boundaries, we compare hypertension/diabetes patients in villages within two kilometers distance but managed by different townships. Results show that, compared to patients in townships with median management intensity, patients in high-intensity townships have 4.8% more PHC visits, 5.2% fewer specialist visits, 11.7% fewer inpatient admissions, and 3.6% lower medical spending. They also tend to have better medication adherence and better control of blood pressure. The resource savings from avoided inpatient admissions substantially outweigh the costs of the program. 

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