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As U.S. President Donald Trump prepares to visit Beijing on May 14-15, 2026, for a highly anticipated summit with President Xi Jinping, the world is watching to see if the two leaders can stabilize a U.S.-China relationship strained by disputes over trade, technological race, the future of Taiwan, and the rippling effects of the conflict with Iran.

Trump’s trip to Beijing – already rescheduled once due to the conflict in the Middle East – has been described as having tremendous symbolic significance. Yet, expectations for a breakthrough on specific deliverables should remain low, according to Susan Thornton, a China expert and former U.S. diplomat. Thornton joined APARC Director Kiyoteru Tsutsui on the latest episode of the APARC Briefing video series to analyze the potential outcomes of the Trump-Xi summit and the high-stakes dynamics shaping U.S.-China relations.
 

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Kiyoteru Tsutsui interviews Susan Thornton.


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Symbols Over Deliverables


Thornton’s nearly three-decade career with the U.S. State Department in Eurasia and East Asia culminated in her role as Acting Assistant Secretary of State for East Asian and Pacific Affairs during the first Trump administration. She offered a pragmatic forecast for the Trump-Xi summit, arguing that its primary value lies in the act of meeting itself.

While both President Trump and President Xi are committed to keeping their dialogue, the expectations for concrete outcomes on pivotal issues in the U.S.-China bilateral relationship should be tempered, argued Thornton, who is currently a senior fellow at Yale Law School’s Paul Tsai China Center, the director of the Forum on Asia-Pacific Security at the National Committee on American Foreign Policy, and a nonresident senior fellow at the Brookings Institution. 

Whether on Taiwan or other pressing matters, China has made it clear it is not interested in a “G2 or a grand bargain” and has relatively low expectations for the list of substantive disputes between the two powers.

The Shadow of the Iran War


The ongoing conflict with Iran has added a new layer of complexity to the tense bilateral relationship. President Trump heads to Beijing after unsuccessful efforts to pressure China into helping reopen the Strait of Hormuz, while Beijing continues backing Tehran politically and potentially militarily. 

Thornton assessed that China will not allow the conflict to derail its high-level engagement with Washington, even as it officially disapproves of the U.S. intervention in the Middle East. “Keeping the U.S.-China relationship on track is much more important than having some kind of a protest signal like that,” she stated.

She suggested that Beijing may see a strategic advantage in America’s renewed focus on the Middle East. While China has made nominal peace proposals, it has not stepped up as a mediator. “It seems like they are kind of hanging back and waiting to see what will happen,” Thornton observed. She posited that, from Beijing’s perspective, a U.S. entanglement in the Middle East may serve as a useful distraction, diverting Washington’s attention and pressure away from China.

At the same time, China is hedging its bets by securing alternative energy supplies and gaining influence in regions where the conflict in the Middle East has damaged U.S. credibility.

The biggest problem for U.S. negotiators is focusing on two or three enduring and major asks of the Chinese in the trade and economic market-opening space. We've really had a hard time deciding what it is that we want from China.
Susan Thornton

Trade and Tech: A Call for a Paradigm Shift


On the economic front, Thornton drew on her deep experience in trade negotiations to critique the lack of focus in U.S. policy.

"The biggest problem for U.S. negotiators is deciding what it is that we want from China," she said. "We tend to give them a long list of revolving priorities, which [makes it easy for the] other side of the negotiating table to just fob them off and not actually commit to anything over years of negotiations.”

On the technology rivalry between the two powers, Thornton urged a shift in strategy. Rather than pursuing sweeping export controls that are often unilateral and incomplete, she advocated for a narrower, multilateral approach focused on the most sensitive technologies, combined with a greater emphasis on American innovation. AI governance is one of the areas Thornton believes could be a common ground for Washington and Beijing to align their policies.

“It's going to be very hard for the United States to contain China's technological ambitions and growth,” she said. “I don't think that we're exactly competing on the same metrics. I question how it is that we're going to be able to keep China from getting technologies that are dual-use but might be useful in some military application when these things are basically economy-wide products.”

When it comes to technological competition, "We need to try to run faster than China, not be constantly trying to trip China up and looking in the rearview mirror," Thornton urged. "I don't think that's going to bode well for the long-term development of the U.S. tech sector."

The Taiwan Flashpoint: A Longer-Term Challenge


While Taiwan remains the most dangerous flashpoint that could trigger a kinetic warfare between the United States and China, Thornton believes that the immediate risk of conflict has receded, in accordance with recent U.S. threat assessments that no longer see 2027 as a likely target date for a potential Chinese takeover of the island.

Beijing, she argued, is closely watching the domestic political situation in Taiwan and how the leadership in Taipei views U.S. reliability and support. “I think the Chinese have determined, based on both of those things they've been watching, that they can afford to wait a bit longer, see what happens.”

Thornton cautioned, however, that, even as a conflict over Taiwan may no longer pose an immediate-term threat, “it is a problem that is going to develop over the coming decade.”

Diplomacy in a Multipolar World Order 


When asked about the future of the global order, Thornton described a trend toward fragmentation. If the United States steps back from its global leadership role, it is difficult to see who else would be willing or able to shoulder the cost of providing global public goods, she said. A “thinner world order,” with the United Nations at its center, may eventually find favor with countries that can afford to pay for some of those goods, she reflected.

In a closing advice for aspiring foreign service officers, Thornton argued that the emergence of a multipolar world reinforces the need for skilled diplomacy. “As the global order changes and more countries come into the mix of the councils of politics in the world, the United States will have to lean back toward diplomacy more,” she predicted.

“We're going to need very good diplomats,” she concluded, because it will be significantly harder to be an American diplomat in a fragmented world order in which the United States is no longer the single overwhelmingly dominant power.

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Speaking on the latest episode of the APARC Briefing series, China expert and veteran diplomat Susan Thornton argues for managing expectations of the summit between the two presidents, rethinking the U.S.-China technology competition, and understanding Beijing’s long game on Taiwan.

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Japan’s semiconductor industry, once globally dominant in DRAM during the 1980s, declined through the 1990s and 2000s due to trade friction with the United States, the rise of Korean competitors, and a failure to adapt to the fabless/foundry model. Today, Japan’s logic IC process technology lags at the 40nm node. 

The 2020 global semiconductor shortage prompted Japan to launch two major revitalization projects under the banner of economic security: TSMC Kumamoto, a joint venture producing 12–28nm logic ICs for Japan’s automotive, industrial, and consumer electronics sectors; and Rapidus, an ambitious startup targeting 2nm logic IC manufacturing by 2027. 

The paper argues that while TSMC Kumamoto meaningfully strengthens Japan’s domestic supply chain — connecting Japanese equipment and materials suppliers with downstream industries — Rapidus tells a different story. Because Japan has virtually no domestic industrial base currently using 2nm chips, Rapidus’s primary market will likely be the United States. Rather than enhancing Japan’s supply chain resilience, Rapidus effectively inserts Japan into a global advanced logic IC supply chain running from the Netherlands through Japan to the United States. Unless Japan develops industries using these chips, the Rapidus project will not directly address Japan’s economic security strategy.

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The Validity of the Revitalization Strategy

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Jun Akabane
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  • Total DALYs increased across all five Asian societies between 2000 and 2019.
  • Population aging was identified as the primary driver of total DALY increases.
  • However, substantial decreases in DALYs per disease case were observed.
  • These trends were especially pronounced for non-communicable diseases.

 

Background

Rapid population aging in Asia has significantly increased the disease burden. However, there is limited research on the drivers of such changes in disability-adjusted life years (DALYs).

 

Objective

To examine the factors contributing to changes in DALYs in China, Japan, Singapore, South Korea, and Taiwan in 2000 and 2019.

 

Methods

We conducted a cross-sectional analysis using data from the Global Burden of Disease Study 2021. Changes in DALYs between 2010 and 2019 were decomposed into four factors: population size, age-sex structure, disease cases per person, and DALYs per disease case.

 

Results

From 2000 to 2019, total DALYs increased across all locations. While DALYs from injuries, communicable, maternal and neonatal conditions, and nutritional deficiencies decreased, DALYs from non-communicable diseases increased. Decomposition analysis identified population aging (changes in age-sex structure) as the primary driver of increases in total DALYs, contributing an average of 33.6%. Population growth accounted for 15.3% on average. However, these increases were partially offset by decreases in DALYs per disease case, which fell by an average of -29.4%. Contributions from disease cases per person were relatively modest, averaging -3.4%. Notably, the decline in DALYs per disease case was more pronounced for non-communicable diseases, despite an overall increase in disease cases per person.

 

Conclusions

The increase in DALYs across these Asian societies was primarily driven by population aging and growth. However, DALYs per disease case decreased, suggesting improvements in disease management. Given the growing burden of non-communicable diseases in these societies, maintaining a focus on effective interventions remains crucial.

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How did Taiwan transform itself from an impoverished economy into a titan of computer and semiconductor chip manufacturing, home to industry giants such as Acer, Foxconn, and TSMC?

The history presented in Honghong Tinn's recent book, Island Tinkerers: Innovation and Transformation in the Making of Taiwan’s Computing Industry (MIT Press), demonstrates that Taiwan's successful computing enterprises and manufacturing sectors arose from Taiwanese technologists' engagement in a process of technology transfer involving overlapping acts of imitation, emulation, experimentation, and innovation.

Tinn, a historian of information technology based at the University of Minnesota Twin Cities, discussed her book at a recent seminar hosted by APARC's Taiwan Program. Watch the session recording:

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Challenging the stereotype of "The West innovates, and the East imitates," Tinn traces the development of Taiwan’s computer and semiconductor industry to efforts by Taiwanese hobbyists and enthusiasts who leveraged Cold War-era U.S. technical assistance while simultaneously adapting and modifying imported technology. Through such hands-on tinkering, they deepened their technical understanding, made computing accessible across the island, and built the foundation for domestic manufacturing.

In her seminar presentation, Tinn focused on Chapter 8 of her book, which describes the technological achievements of Acer's founder, Stan Shih, and his engineers, and critiques their portrayal as counterfeiters by U.S. stakeholders. She recounts how, in 1983, Shih's company, originally named Multitech, realized the dream of manufacturing computers domestically and shipped a thousand microcomputers to the United States, only to have them intercepted by U.S. Customs in San Francisco. The computers, called Micro-Professor II, were deemed Apple II counterfeits despite being independently designed with unique features. Although Apple did not file suit against Multitech in Taiwan, it worked intensely to prevent Multitech from exporting its products to the United States.

What followed, Tinn argues, revealed deep misunderstandings, sometimes deliberate, about Taiwan's technological capabilities. U.S. media and analysts failed to make sense of Shih’s success in the microcomputer market, and Congressional hearings in 1983 portrayed Taiwanese computer manufacturers as counterfeiters and invaders threatening American industry.

This misrepresentation, she says, reflected Orientalist assumptions that Taiwanese lacked the capacity to innovate. Tinn writes:

"The Orientalist representations of Taiwanese computer manufacturers can be selfcontradictory. On the one hand, when it comes to the manufacturing capacity of Taiwanese computer makers, participants in the congressional hearings exaggerated the numbers of counterfeit computers Taiwanese companies dumped in the United States. On the other hand, more and more US computer manufacturers gradually recognized the manufacturing capacity of Taiwanese companies and subcontracted them to make computers at lower cost for the expanding US and global personal computer market."

 

Island Tinkerers is available from MIT Press, including in an open-access edition. 

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At a seminar hosted by APARC's Taiwan Program, University of Minnesota scholar Honghong Tinn, a historian of information technology, discussed her recent book, which explores how Taiwanese technologists turned tinkering into world-class computer manufacturing.

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At a recent seminar hosted by APARCʼs China Program, Professor Jessica Chen Weiss, the David M. Lampton Professor of China Studies at the Johns Hopkins University's School of Advanced International Studies, presented findings from her forthcoming book, Faultlines: The Tensions Beneath China's Global Ambitions (under contract with Oxford University Press), which examines how domestic politics and regime insecurity shape China’s foreign policy ambitions, prospects for peaceful coexistence, and the future of international order. Drawing on research and fieldwork in China, Weiss argued that understanding Beijingʼs behavior on the world stage requires looking beyond ideology to the contested priorities and political calculations that drive decision-making within the Chinese Communist Party (CCP).

Weiss proposed a framework centered on three pillars that have sustained CCP legitimacy since the late 1970s: sovereignty (nationalism), security (civility), and development. Her analysis reveals that China's objectives are not static but moving targets shaped by competing domestic interests, leadership priorities, and international pressures.


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The Sovereignty-Security-Development Paradigm
 

At the heart of Weissʼs argument is the recognition that the CCPʼs foremost concern is domestic survival. In the face of the collapse of most communist regimes, the Party has remained vigilant against what it calls “peaceful evolution” and democratic contagion.

On issues touching core sovereignty concerns – Taiwan, Hong Kong, and maritime territorial claims – China has been “hyperactive” in making demands, even when doing so invites international censure. Weiss explained that the more central an issue is to CCP domestic legitimacy, the harder it becomes to make concessions, and the more likely international pressure is to backfire.

Yet tensions exist between competing priorities. China has compromised on certain border disputes to shore up domestic security, while its evolving stance on climate change reflects a shift from viewing carbon limits as threats to growth to recognizing the greater threat environmental catastrophes present to the nation’s stability.

Beyond the Monolith: China's Internal Contestation
 

Weissʼs research demonstrates that authoritarian China is far from monolithic. Different geographic, economic, institutional, and even ideological interests shape policy debates, even if most actors lack formal veto power. Local governments can resist central directives, as evidenced during the COVID-19 outbreak, when local officials initially withheld information about human-to-human transmission from the central government to prevent panic from disrupting important political meetings.

This pattern of center-local tension extends to China's international commitments. Local officials often game environmental regulations to juice growth and secure promotions, undermining Beijingʼs pledges on carbon emissions. On issues ranging from Belt and Road investments to export controls, implementation frequently diverges from stated policy as local actors pursue their own interests.

Weiss’s framework distinguishes among issues that are both central and uncontested (such as Taiwan), those that are central but contested (like climate change and trade policy), and peripheral issues where Beijing has shown greater flexibility (such as demonstrated by many UN peacekeeping initiatives). This helps explain why international pressure succeeds in some domains but fails spectacularly in others.

"The more central an issue is domestically, the more pressure the government faces to perform, and the harder it is to defy these domestic expectations," Weiss said. As a result, international pressure on these central issues is more likely to backfire, forcing the government to be seen as defending its core interests. She underscored that "even on these central issues, there's often tension with other central priorities, and managing these trade-offs comes with a number of different risks. It also means that sometimes an issue that touches on one pillar of regime support can yield to another."

Nationalism as Constraint and Tool
 

Weiss described nationalism as both a pillar of the CCPʼs legitimacy and a potential vulnerability when the government’s response appears weak. While large-scale anti-foreign protests have become rare, nationalist sentiment remains active online and shapes diplomatic calculations.

During Speaker Nancy Pelosiʼs 2022 visit to Taiwan, Chinese social media erupted with calls for the PLA to shoot down her plane. One interlocutor told Weiss his 14-year-old son and friends had stayed up past bedtime to watch Pelosiʼs plane land, illustrating nationalismʼs penetration into Chinese society.

Survey research reveals Chinese public opinion is quite hawkish, with majorities supporting military spending and viewing the U.S. presence in Asia as a threat. The government often refrains from suppressing nationalist sentiment to avoid backlash, even when doing so creates diplomatic complications. Weissʼs public opinion survey experiments, however, reveal that tough but vague threats can provide the government with wiggle room for de-escalation, although disapproval emerges when action is not sufficiently tough.

China's activities are making autocracy more viable and, to the extent that China is succeeding, making China's example more appealing as a consequence. But its strategy doesn't hinge on defeating democracy around the world.
Jessica Chen Weiss

Regime Security Without Ideological Crusade
 

Weiss pushed back against arguments that China is bent on global domination or that ideology drives conflict with the West. While the CCP seeks a less ideologically threatening environment, it must balance this against development and market access.

This pragmatic calculus explains China's constrained support for Russiaʼs war in Ukraine — Beijing fears secondary sanctions more than it values autocratic solidarity. Rather than exporting revolution, China has worked with incumbents of all political stripes in the service of its national interests.

Chinaʼs strategy focuses on making autocracy viable at home, not on defeating democracy globally. This suggests room for coexistence if both sides can reach a détente on interference in internal affairs.

“China's activities are making autocracy more viable and, to the extent that China is succeeding, making China's example more appealing as a consequence. But its strategy doesn't hinge on defeating democracy around the world,” argued Weiss. This implies, to her view, that “there is more room for coexistence between autocracies and democracies if these different systems can find or reach a potential détente in the realm of ideas about how countries govern themselves, and importantly, they need to pull back their efforts in other societies across boundaries.”

Interdependence and Future Trajectories
 

Weiss concluded by outlining how her framework suggests different engagement strategies depending on where issues fall within the centrality-contestation matrix. On central but uncontested issues like Taiwan, pressure proves counterproductive, and reciprocal restraint may be most promising. On central but contested issues like currency, multilateral pressure can influence certain Chinese constituencies against others. On peripheral issues, such pressure is most effective unless powerful domestic constituencies subvert implementation.

Addressing questions about U.S.-China decoupling, Weiss noted that both sides recognize there are interdependencies that don’t have quick solutions. Even in a critical area like minerals, diversification will take at least a decade, and Chinese processing will still dominate globally. The goal of diversification should be to preempt coercion, not to achieve true decoupling.

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Chinese President Xi Jinping is applauded by senior members of the government and delegates as he walks to the podium before his speech during the Opening Ceremony of the 20th National Congress of the Communist Party of China at The Great Hall of People on October 16, 2022 in Beijing, China.
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China studies expert Jessica Chen Weiss of the Johns Hopkins School of Advanced International Studies reveals how the Chinese Communist Partyʼs pursuit of domestic survival, which balances three core pillars, drives Beijingʼs assertive yet pragmatic foreign policy in an evolving international order.

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  • Chinaʼs foreign policy is driven by three domestic pillars: The CCPʼs pursuit of sovereignty, security, and development creates competing priorities that shape Beijingʼs assertiveness on core issues like Taiwan, while allowing flexibility on peripheral concerns such as UN peacekeeping.
  • International pressure often backfires on central issues: The more important an issue is to CCP domestic legitimacy, the harder it becomes to make concessions, meaning external pressure regarding Taiwan or territorial disputes tends to strengthen rather than moderate Beijingʼs position.
  • China is not monolithic: Local governments, industries, and different Party factions contest policy implementation, creating gaps between Beijingʼs stated commitments and actual behavior on issues ranging from environmental regulations to trade.
     
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The January 3, 2026, U.S. “Operation Absolute Resolve” in Venezuela to capture and remove President Nicolás Maduro has raised urgent questions about its repercussions for the U.S.-China competition, Taiwan Strait security, American strategic priorities in the Indo-Pacific region, and U.S. allies and partners.

In two new episodes of the APARC Briefing series, Stanford scholars Larry Diamond, the Mosbacher Senior Fellow in Democracy at the Freeman Spogli Institute for International Studies (FSI) and William L. Clayton Senior Fellow at the Hoover Institution, and APARC faculty affiliate Oriana Skylar Mastro, a center fellow at FSI, join host Kiyoteru Tsutsui, the director of APARC, to unravel what happened in Venezuela and the implications of the U.S. actions in Latin America for Taiwan, security and alliances in the Indo-Pacific, and U.S. relations with stakeholders in the region.

Both scholars agree that the U.S. mission in Venezuela is a precedent that likely emboldens rather than deters China in its Taiwan calculus, warning that the shift it represents in U.S. national security policy might detract from American capabilities in the Indo-Pacific region at a crucial moment. They also provide sobering advice for U.S. allies struggling to adjust to rapidly shifting geopolitical realities under the second Trump administration.

A Shocking Action in World Affairs


There is no dispute that the Maduro government has been deeply authoritarian, deeply corrupt, and deeply illegitimate, says Diamond, author of Ill Winds: Saving Democracy from Russian Rage, Chinese Ambition, and American Complacency. Yet the United States “has probably violated international law to intervene forcibly in the internal affairs of Venezuela and remove its political leader," creating enormous implications for the international community. If it does not pursue a strategy of systemic democratic change in Venezuela, “all of this will have been for naught, and it will have paid a tragic price in terms of international precedent and international legitimacy,” Diamond argues.

Beijing is already using the operation as a "discourse power win," depicting the United States as crushing sovereignty and international law, Mastro notes. Moreover, in addition to Venezuela, President Trump continues to make statements about Greenland, reiterating its importance for U.S. national security and his interest in acquiring the territory, which has alarmed European partners and exacerbated strains with NATO.

“For the first time since WWII, some European countries have declared the United States to be a security threat,” Mastro says. “So I am curious to see if the Chinese try to bring along the Venezuela case as well, to convince U.S. allies and partners to distance themselves from the United States, which would have significant repercussions for the global order and for the United States' role in it.”

There is no situation in which we 'neutralize' Chinese air defenses and then somehow do some sort of infiltration.
Oriana Skylar Mastro

A Risky Strategic Reorientation


By unilaterally bypassing international norms to wield power in its own "backyard," the United States may have set a precedent that China can now exploit to justify its own ambitions in Taiwan as a legitimate exercise of regional dominance.

Diamond remarks on this line of thought: “If the United States, as a hegemon, can just do what it wants to arrest and remove a leader, in its kind of declared sphere of influence, what's to stop Xi Jinping from doing the same in his sphere of influence, and with a democratic system in Taiwan, whose sovereignty he does not recognize?” 

On the other hand, many commentators have argued that Operation Absolute Resolve serves as a deterrent to Chinese aggression. Granted, there is no doubt that the operation was a remarkably successful military attack showcasing the capabilities of U.S. special forces, notes Mastro, who, alongside her academic career, also serves in the United States Air Force Reserve, for which she currently works at the Pentagon as deputy director of research for Global China Strategy. Nevertheless, she emphasizes that the United States cannot carry out a similar attack in Asia.

“There is no situation in which we ‘neutralize’ Chinese air defenses and then somehow do some sort of infiltration,” says Mastro, author of Upstart: How China Became a Great Power. The U.S. intervention in Venezuela, therefore, “does not tell us a lot, operationally, about what the United States is capable of in a contingency via China.”

More troubling, Mastro identifies the Venezuela operation as demonstrating a fundamental shift in U.S. strategic priorities, with the raid conducted just weeks after the Trump administration released its 2025 National Security Strategy, which prioritizes restoring “American preeminence in the Western Hemisphere.” Mastro characterizes it as “the one region where U.S. dominance faces no serious challenge.” Thus, Venezuela suggests “the Trump administration means business about the renewed focus on the Western Hemisphere, and, unfortunately, that makes me concerned that there might be strategic neglect of the Indo-Pacific moving forward,” she points out.

Diamond stresses that, virtually throughout the entire presidency of Xi Jinping, dating back to 2012, China has been rapidly building up its military capabilities, prioritizing those specifically suited for coercing, isolating, or potentially seizing Taiwan. Against this backdrop, “I am much more fearful about the future of Taiwan in the week following U.S. military action on January 3 in Venezuela than I was before that action.” 

Mastro agrees with this assessment about the ripple effects of the operation in Venezuela. “I would say that it probably emboldens China.”

[M]y advice to the leaderships [of our allies is]: Find a way to get to the fundamental interests you need to pursue, defend, and preserve. And in the case of East Asia, that has to be number one, above all else, the preservation of our alliances.
Larry Diamond

Frank Advice for U.S. Allies


For U.S. allies in the Indo-Pacific, including Japan, South Korea, the Philippines, and Australia, as well as allies and partners in Europe, both scholars offer pragmatic counsel for coping with the Trump administration.

Diamond urges U.S. allies to manage Trump diplomatically while staying focused on core interests, namely, prioritizing the preservation of the alliances and strengthening autonomous defense capabilities to demonstrate commitment and hedge against potential U.S. retrenchment.

“It takes constant, energetic, proactive, imaginative, relentless, and in some ways deferential working of the relationship, including the personal relationship between these leaders and Donald Trump [...] The future will be better if the leaders of these countries internalize that fundamental lesson about Trump.”

Mastro is equally direct about the limited alternatives ahead of U.S. allies: "You don't really have an option. That Chinese military – if it gives the United States problems, it definitely gives you problems. There's no hope for a country like Taiwan without the United States. There's no hope for Australia without the United States."

Counterintuitively, U.S. assertiveness may indicate its insecurity about the balance of power with China. “It seems to me that the United States also needs to be reassured that our allies and partners support us [...] And if we had that confidence, maybe the United States would be less aggressive in its use of military force.”

Watch the two APARC Briefing episodes:

🔸 What the U.S. Raid in Venezuela Means for Taiwan and Asia - with Larry Diamond >

🔸 Does Venezuela Provide China a Roadmap for Taiwan? – with Oriana Skylar Mastro >

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Speaking on the APARC Briefing video series, Larry Diamond and Oriana Skylar Mastro analyze the strategic implications of the U.S. operation in Venezuela for the balance of power in the Taiwan Strait, Indo-Pacific security, America’s alliances, and the liberal international order.

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At a seminar hosted by APARC’s Taiwan Program, National Chengchi University’s Hsiao-Hui Lee, a professor of management information systems, dissected how global trade shocks propagate not only through trade flows of physical goods but also through financial flows, particularly trade credit, within supply chain networks. Against the backdrop of shifting U.S. trade policies and geopolitical upheavals, Lee's research offers insights for policymakers and businesses navigating the complex landscape of global trade and supply chain resilience. Through a Taiwan lens, her analysis underscores the importance of managing not just the logistical but also the financial linkages of global supply chain networks.

Global trade is interconnected through global supply chains via direct and indirect trade. Geopolitical events, natural disasters, and unexpected shocks disrupt these connections, creating ripple effects across global supply chain networks. Events ranging from the 2008 financial crisis to the 2011 East Japan earthquake and tsunami, the COVID-19 pandemic, and, more recently, U.S.-China trade tensions, the Russia-Ukraine war, and the Trump administration’s executive orders all accentuated vulnerabilities within these interconnected frameworks.

Lee’s main point is that shocks in an industry or a region can propagate across supply chains not only through transactions but also via the movement of trade credit, which allows firms to buy inventory and delay payments. For suppliers, this mechanism provides a financial buffer that helps maintain liquidity and manage cash flows. Indeed, trade finance supports 80 to 90 percent of global trade, according to the World Trade Organization.

Yet, trade credit comes with its own set of risks that may amplify financial stress across supply chain networks and propagate shocks. And if one firm defaults, then the impact can cascade through the supply chain, affecting multiple sectors. Trade creditors experience substantial losses when debtors fail, and these losses can increase the bankruptcy risk for suppliers, demonstrating how financial stress can spread through trade credit links. For example, during the 2008 financial crisis, a significant contraction in trade finance availability led to a 12% decline in international trade. This shortage of financing disrupted global supply chains, causing widespread economic contraction. 

Supply chain resilience requires managing financing networks — credit insurance, supplier finance, and transparency — not just logistics.
Hsiao-Hui Lee

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Political leaders aiming to secure supply chains have touted risk-mitigating strategies such as reshoring (repatriating raw material production and manufacturing), nearshoring (moving far-flung sourcing points to closer countries and regions), and friendshoring (relocating supply chains to allied countries where the risk of disruption from political chaos is low). Each strategy offers unique potential benefits, like reduced transportation costs or enhanced political stability. For instance, the U.S. CHIPS Act aims to bolster domestic semiconductor manufacturing, while the United States-Mexico-Canada Agreement (USMCA) helped facilitate duty-free access to U.S. markets.

Lee’s research, however, is a cautionary examination of the trade credit interdependence inherent in these common outsourcing strategies and their influence on shock propagation. She argues that, while relocating production closer to home or to friendly nations is beneficial, the politics of relocation often overlook the financial linkage risks introduced by extensive trade credit networks. Taiwan’s manufacturing ecosystem – concentrated around semiconductors, electronics, and precision components – is particularly illustrative of this complexity, with high levels of inter-firm trade credit amplifying liquidity stresses during trade shocks.

Using empirical models, Lee’s analysis shows that in-country shock propagation tends to be stronger than cross-border transmission. Yet, the intricate web of cross-border trade credits means that even with reshoring or nearshoring strategies, Taiwanese suppliers, for example, remain financially interlinked with foreign customers, like Apple and Nvidia. Therefore, demand shocks in one region may still create repercussions in Taiwan's local cash flow chains.

Lee suggests that implementing robust risk management practices – such as credit insurance, diversification of credit sources, and realignment of supply chains – can help mitigate these risks.
 

Key Takeaways: Global Trade and Credit-Driven Co-Movement


For Global Stakeholders:
 

  1. The Importance of Credit Chain Interdependence: Trade credit chain linkage risks can propagate global trade shocks.
  2. Pros and Cons of Outsourcing Strategies: While reshoring, nearshoring, and friendshoring have clear benefits, each also presents unique challenges and risks, particularly due to trade-credit interdependencies.
  3. Complexity in Trade-Credit Networks: Extensive trade credit links represent an often-overlooked risk in corporate relocation decisions.
  4. Supply Chain Resilience Strategies: Supply chain resilience requires managing not only logistics but also financing networks.


For Taiwan:
 

  1. Taiwan’s Manufacturing Ecosystem Dynamics: The island nation’s manufacturing sectors heavily depend on inter-firm trade credit networks, which can amplify liquidity stresses during shocks.
  2. Financial Ties Remain Despite Reshoring Efforts: Even with U.S. reshoring or nearshoring efforts, Taiwanese suppliers remain financially tied to foreign customers, making them susceptible to demand shocks abroad.
  3. Financial Flexibility for Stability: Firms such as TSMC, Hon Hai, and Delta Electronics leverage factoring and receivables sales to stabilize working capital, indicating that financial flexibility is key to resilience.
  4. Enhancing Economic Fortitude: Expanding supply-chain finance platforms and trade-credit insurance could boost Taiwan’s resilience amid export bans or geopolitical disruptions.

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Taiwan’s experience reveals that trade credit linkages are a substantial transmission channel for global trade shocks, according to research by National Chengchi University’s Hsiao-Hui Lee, an expert in supply chain management. Her work highlights the need to include financial network management in strategies for supply chain resilience.

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This paper examines the “Korea discount,” the chronic undervaluation of South Korean stocks compared to other developed markets. Despite Korea ranking 13th globally in market capitalization, its stock market has grown only 25% over the past decade, while the S&P 500 grew 186%. The author attributes this poor performance to weak corporate governance, particularly the dominance of family-controlled conglomerates (chaebols) that prioritize the interests of founding families over those of minority shareholders. An analysis of successful reforms in Japan, Taiwan, and the United States shows that the Korea discount could be successfully resolved by strengthening corporate disclosure requirements, resolving conflicts of interest among institutional investors, and making South Korea’s voluntary stewardship code more enforceable to encourage active shareholder engagement and improve market valuations. 

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Institutional Investor–Driven Governance Reform and the Resolution of the Korea Discount

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We are pleased to share the publication of a new volume, Cold War Refugees: Connected Histories of Displacement and Migration across Postcolonial Asia, edited by the Korea Program's Yumi Moon, associate professor in Stanford's Department of History.

The book, now available from Stanford University Press, revisits Cold War history by examining the identities, cultures, and agendas of the many refugees forced to flee their homes across East, Southeast, and South Asia due to the great power conflict between the US and the USSR. Moon's book draws on multilingual archival sources and presents these displaced peoples as historical actors in their own right, not mere subjects of government actions. Exploring the local, regional, and global contexts of displacement through five cases —Taiwan, Vietnam, Korea, Afghanistan, and Pakistan — this volume sheds new light on understudied aspects of Cold War history.

This book is an important new contribution to our understanding of population flows on the Korean Peninsula across decades.
Paul Chang
Deputy Director, Korea Program

The book's chapters — written by Phi-Vân Nguyen, Dominic Meng-Hsuan Yang, Yumi Moon, Ijlal Muzaffar, Robert D. Crews, Sabauon Nasseri, and Aishwary Kumar — explore Vietnam's 1954 partition, refugees displaced from Zhejiang to Taiwan, North Korean refugees in South Korea from 1945–50, the Cold War legacy in Karachi, and Afghan refugees.

Purchase Cold War Refugees at www.sup.org and receive 20% off with the code MOON20.

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The new volume, edited by Stanford historian Yumi Moon, examines the experiences of Asian populations displaced by the conflict between the United States and the Soviet Union.

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The Taiwan Program at the Shorenstein Asia-Pacific Research Center (APARC) was pleased to join the North American Taiwan Studies Association (NATSA) as a co-host of NATSA’s 2025 annual conference, Toward an Otherwise in Taiwan and Beyond. Held at Stanford University from June 30 to July 2, the conference continued NATSA’s three-decade tradition of convening Taiwan scholars across disciplines. Stanford East Asia Library and the National Museum of Taiwan Literature were the event’s additional co-hosts.

Organizing the annual interdisciplinary academic forum is a core mission of NATSA, a nonprofit organization operated by North American and overseas Taiwanese doctoral students and recent graduates studying Taiwan. This year’s conference invited participants to engage with the “otherwise,” a framework adopted by fields tied to social movements, including Black, Indigenous, Latinx, Asian American, and gender and sexuality studies. Using this framework, the conference aimed to recenter marginalized aspects of Taiwan and challenge conventional methodologies and narratives in Taiwan studies.

The conference opened with welcome remarks by Stanford sociologist and APARC Director Gi-Wook Shin, who also serves as the director of the Taiwan Program. The ensuing agenda explored diverse topics and included roundtables, workshops, a mentoring session, a film screening, and a book display. The conversations underscored the need for scholarship rooted in solidarity, critical inquiry, and imagination. The following are highlights from selected roundtable discussions.


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Reflecting on Three Decades of Taiwan Studies

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The opening signature roundtable, Three Decades of Taiwan Studies, brought together four scholars from different programs to reflect on the historical development of Taiwan studies in North America. It featured Howard Chiang, a professor of history at the University of California, Santa Barbara; sociologist Ruo-Fan Liu, the 2024-26 Taiwan Program postdoctoral fellow at APARC; Richard J. Haddock, the assistant director of the Sigur Center for Asian Studies at the George Washington University, where he is also pursuing a doctorate in public policy and public administration; and University of Washington’s Ellen Y. Chang, a film scholar and art curator/practitioner.

The four speakers traced the transformation of Taiwan studies from its roots in traditional area studies into an interdisciplinary field. They emphasized that, despite growing academic interest in Taiwan and the field’s expansion in both content and relevance, institutional support remains precarious and long-term financial commitment is uncertain.

Taiwan’s Democratic Resilience in the Age of AI


The roundtable AI, Misinformation, and Global Security examined Taiwan’s leadership role in combating digital disinformation and defending democratic institutions. Mei-Chun Lee, an anthropologist at Academia Sinica, introduced Taiwan’s civil society responses to misinformation, including initiatives such as the Fake News Cleanser program, which helps older populations navigate misinformation. She emphasized a "security and care" framework combining fact-checking and civic education networks.

Thung-Hong Lin, a sociologist at Academia Sinica, examined Taiwan’s democratic resilience amid China’s sharp power tactics, sharing findings from a large dataset that tracks cross-Strait informational networks and their influence on voting patterns in Taiwan. 

Herbert Chang, a computational social scientist at Dartmouth College who studies social networks and online politics, analyzed the role of generative AI in misinformation during Taiwan’s 2024 elections. While memes (including AI-generated ones) spread rapidly, his study finds that AI did not significantly shift voting behavior due to entrenched political polarization. 

Yuan Hsiao, a Yale University sociologist studying the intersection of digital media, social networks, and collective action, discussed the emotional effects of misinformation on social media, focusing on how emotional manipulation drives identification with protest movements. He also raised methodological challenges in measuring misinformation.

Imagining Alternative Futures Across Asia

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The roundtable Toward Otherwise Futures in Asia brought together scholars focusing on the intersecting yet distinct cultural and political landscapes of China, Hong Kong, Taiwan, and Tibet. The conversation featured Harvard University’s political theorist Samuel Chan; Cornell University’s doctoral candidate in anthropology Yu Liang, also known as Leeve Palray; Stanford University’s political theorist and postdoctoral scholar Simon Sihang Luo; and Tenzing Wangdak, a doctoral student in anthropology at the University of California, Irvine.

Together, they explored how communities in the four distinct regions respond to cultural displacement, political repression, and transnational authoritarianism. The discussion centered on how each place navigates power asymmetries relative to China and whether there is any alternative path to democratization in China. The conversation raised questions about alternative political futures and relational frameworks for understanding different types of power dynamics in East Asia.
 

The Evolving Contours of Taiwan Studies

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The closing forum, Working Across Differences: NATSA and 30 Years of Community-Building, invited three scholars to reflect on the overall theme of the conference, drawing on their disciplinary perspectives and rich engagement with NATSA. The conversation featured anthropologist Mei-Chun Lee of Academia Sinica; legal and public health scholar Po-Han Lee of National Taiwan University; and I-Lin Liu, a doctoral candidate in media studies at Indiana University Bloomington.

The panelists considered NATSA’s unique position as a student-led network that fosters scholarly exchange across disciplines and generations. They discussed the importance of promoting flexibility and inclusiveness as the field of Taiwan studies responds to academic and political shifts. Looking ahead, the speakers called for incorporating marginalized voices from Taiwan.

As Taiwan increasingly gains visibility on the world stage, the conference affirmed the importance of advancing Taiwan studies as an interdisciplinary, justice-oriented, and globally connected field.

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Participants at the NATSA 2025 conference.
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The North American Taiwan Studies Association’s 2025 conference invited participants to embrace the “otherwise,” elevating overlooked aspects of Taiwan and reimagining the field of Taiwan studies to challenge dominant narratives and disciplinary methodologies.

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