International Relations

FSI researchers strive to understand how countries relate to one another, and what policies are needed to achieve global stability and prosperity. International relations experts focus on the challenging U.S.-Russian relationship, the alliance between the U.S. and Japan and the limitations of America’s counterinsurgency strategy in Afghanistan.

Foreign aid is also examined by scholars trying to understand whether money earmarked for health improvements reaches those who need it most. And FSI’s Walter H. Shorenstein Asia-Pacific Research Center has published on the need for strong South Korean leadership in dealing with its northern neighbor.

FSI researchers also look at the citizens who drive international relations, studying the effects of migration and how borders shape people’s lives. Meanwhile FSI students are very much involved in this area, working with the United Nations in Ethiopia to rethink refugee communities.

Trade is also a key component of international relations, with FSI approaching the topic from a slew of angles and states. The economy of trade is rife for study, with an APARC event on the implications of more open trade policies in Japan, and FSI researchers making sense of who would benefit from a free trade zone between the European Union and the United States.

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China's integrated circuit market is the fastest growing in the world, increasing from 7 percent of the world in 2000 to 20 percent in 2004. China's State Council has set the ambitious goal of having domestic production satisfy most of this demand, while closing the technology gap with developed countries.

Mr. Yu, President of the China Semiconductor Industry Association and former chief engineer of the Ministry of Electronics, is uniquely positioned to review the past decade's transition of the Chinese semiconductor industry from state controlled enterprises to growing companies responding to market forces. Mr. Yu will also provide his insights on the future of China's high tech development and its ramifications for trade relations with the U.S.

Mr. Yu Zhongyu has been engaged in semiconductor research and management for many years and is one of the leaders of China's integrated circuit (IC) industry. He has engaged in research and design of IC products and was honored with the National Science and Technology Award. Having joined the government in 1988, he was responsible for organizing and leading the IC project during "7th five-year plan" and "8th five-year plan"; he acted as a member of the leading group for the National "908" project and headed the construction leading group of the Huahong factory in the "909" project. These projects made important contributions to China's IC industry development. Mr. Yu has been the President of the China Semiconductor Industry Association since 2001.

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Yu Zhongyu Speaker President of the China Semiconductor Industry Association (CSIA)
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Mr. Schriver will address China's military modernization program, its growing economic clout, and its increased willingness to exercise pro-active diplomacy to further its interests. He will examine how this widening "tool box" of capabilities impacts China's approach to security challenges in Asia including its long-standing differences with Taiwan, more recent renewed tensions withJapan, the Korean nuclear challenge, and energy security. And he will assess what all these developments mean for the security interests of the United States and what policy options are under consideration in Washington in response to the China challenge.

Mr. Schriver is Partner with Armitage International, is the former Deputy

Assistant Secretary of State for East Asia with specific responsibilities for China, and the former Senior Director for China in the Office of the Secretary of Defense.

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Randall Schriver former Deputy Assistant Secretary of State for East Asian Affairs Speaker
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George Krompacky
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On October 18, 2005, SPRIE presented the next seminar in its 2005-2006 series on "Greater China and the Globalization of R&D" with speaker Dr. Doug Fuller, current SPRIE Fellow. Dr. Fuller, speaking on "From California Dreaming to Silicon Success: The Rise of China's Semiconductor Industry," presented both industry-wide data and case studies of individual firms to explain how the politics of finance in China shape which Chinese chip firms become fast learners able to compete in world markets and which ones remain technological laggards.

Over the last several decades, there has been a strenuous debate about policies for economic development between the Washington Consensus promoted by the major international financial institutions and the revisionist political economists . Followers of the former view advocate free and unfettered markets buttressed by institutions to protect property rights. The revisionists argue that development involves social and political processes not adequately captured by the narrow prescriptive focus of the Washington Consensus.

In confronting globalization, there is also a new split among the revisionists themselves. Whereas the Washington Consensus welcomes globalization as a boon to developing countries through expanding the scope of market forces, the revisionists divide over the prospects for developing countries under globalization. The optimists, such as Ernst and Saxenian, see transnational networks as providing opportunities for developing countries to continue to learn the skills and competencies necessary to further their progress. The pessimists of the revisionist camp, such as Stiglitz and Strange, see globalization eroding the capabilities of the state or state-societal alliances necessary for development.

Using the case of technological upgrading (one aspect of economic development) in China's information technology (IT) industry, I demonstrate that opportunities for development exist under globalization. These paths to development are not simply the result of picking the right international networks to join nor are they due to the continued efficacy of state action. They also do not arise from well-developed market institutions within China. China's development success in spite of low levels of state industrial policymaking capacity and very incomplete market institutions tells us that other developing countries similarly unequipped can develop even in this globalized world.

In China's IT industry, two local institutional variables, firm operational strategies and state-firm relations, have interacted with the technology flows present in global networks to create opportunities for certain types of firms to upgrade. A firm's operational strategy (OS) determines its motivation to upgrade in China as opposed to doing so elsewhere. The relationship of firms to the state determines their sources of finance i.e. whether or not they can access functioning financial institutions.

The relationship of firms to the state determines their sources of finance and these sources of finance in turn impact their ability to upgrade. Sources of finance that provide credit with hard budget constraints give firms incentives to upgrade. Firms have hard budget constraints when they do not receive free help in covering their own financial obligations. With hard budget constraints forcing firms to meet their financial obligations, firms have to remain competitive to survive. For technology firms, a critical part of their competitiveness is their technology so they have every incentive to improve their technologies to keep pace with competitors. Finance that provides credit with soft budget constraints deprives firms of the incentives and even the capabilities to upgrade. Firms have soft budget constraints when they do not have to pay for some or all of their financial obligations themselves. These firms can rationally expect to survive even if not competitive because others are willing to bail them out. A third possibility is no source of finance. Firms without financing will not be able to invest in technological development.

 

There are four types of firms in China: the favored domestic firms, the neglected domestic firms, the hybrid foreign-invested enterprises (FIEs) and the regular FIEs. Financing and motivation have varied across firm categories. Due to different state-firm relations, FIEs rely on foreign finance and domestic firms do not. Hybrid FIEs differ from regular FIEs because the hybrids have a China-based operational strategy. This operational strategy (OS) is a mix of interests and ideational factors that causes these firms to perceive China either as the vital center of their operations (the China-based OS) or as just another location among many (the non-China-based OS). Thus, variation in firm-state relations (finance) and operational strategy (motivation) determine the variation in technological upgrading.

This thesis finds that the two types of FIEs are more likely to contribute to upgrading in China than the two types of domestic firms. Among the FIEs, the hybrid FIEs are more likely to contribute than the regular FIEs though the discrepancy is not as large as it is between the FIEs and domestic firms.

The hybrids are the most successful upgraders because they have both disciplined finance (i.e. credit with relatively hard budget constraints) from foreign financial institutions and the motivation to upgrade in China due to their China-based OS. The unsuccessful domestic upgraders lack finance (neglected domestic firms) or financial discipline (the favored domestic firms) due to their particular relationships to the state. The regular FIEs have the capabilities to upgrade due to their financial discipline and access to transnational technology networks, but undertake less upgrading in China than the hybrids because they lack the China-based operational strategy.

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The US-India corridor for services outsourcing, now over three decades old, has moved from providing software programming to a wide range of lines of work, encompassing business processes, call-centers and analytical work, and going beyond its original focus on the banking industry to cover other financial services, healthcare and personnel management. The talk will address the benefits and risks associated with outsourcing,  the value proposition from a vendors' perspective and trends in the outsourcing services industry. The talk will take an analytical view of the drivers of outsourcing, going beyond the usual arguments based on cost arbitrage to show how firms like TCS have built defensible businesses based on process maturity, domain expertise, scale and scope. 

Surya Kant (known as Sury) is  President, Tata Consultancy Services  North America. Tata Consultancy Services Limited (TCS) is India's largest global IT consulting and services company, employing over 50,000 persons in 34 countries. His 27 year career with TCS includes setting up TCS Japan in 1987. He has also been country manager, TCS UK.  His focus areas include software quality assurance and delivery center management.

Sury received his Masters in Electrical Engineering from IIT Delhi (1978) and his Bachelors of Electrical Engineering from Delhi College of Engineering (1976). He is a member of the Association of Computing Machinery (ACM), USA. He was nominated to the Tata Group Top Strategic Leadership Programme in 2004.

Tea and samosas will be served.

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Surya Kant President, Tata Consultancy Services Limited, North American Operations (TSC) Speaker
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After more than 30 years under the strong leadership of Suharto, Indonesians saw three weak and not always legitimate presidents come and go: B. J. Habibie (1998-99), Abdurrahman Wahid (1999-2001), and Megawati Sukarnoputri (2001-2004). Democratization went forward. Yet Indonesians increasingly longed for a stronger

government that could deliver on its promises, including economic development. In 2004 Susilo Bambang Yudhoyono (SBY) won the country's first-ever direct presidential election by a landslide. During the campaign he promised, above all, an effective

government. Looking back on his first year, how has he performed? Has he broken the string of weak leaders? Will he grow in his job to become more effective? More

broadly, are weak leaders good for democracy but bad for development? Or does Indonesia illustrate some other relationship between national leadership, political

openness, and economic progress?

Hadi Soesastro is currently a visiting professor in the Weatherhead Institute of East Asian Studies at Columbia University. He has been with CSIS since 1971. His research interests include the political economy of development, regionalism, and trade, and energy issues, topics on which he has published and lectured widely. Recent writing on Indonesia includes an essay in Economic Recovery and Reform (2004). Dr. Soesastro chairs the International Steering Committee of PAFTAD (Pacific Trade and Development) and serves as an adjunct professor at the Australian National University in Canberra. In Indonesia he has served as a member of the National Research Council and the National Economic Council. He earned his PhD from the RAND Graduate School in Santa Monica, California.

Daniel I. Okimoto Conference Room

Hadi Soesastro Executive Director, Centre for Strategic and International Studies, Jakarta Speaker
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Many people in China and the US assume that the new Taiwanese national identity is a political ploy which originated with Taiwan's government. Based on ethnographic research in both Taiwan and China, Melissa Brown argues that Taiwanese identity -- in both its ethnic and national forms -- are based on social experience. Because the people of Taiwan and China have had such different social experiences since 1895, Taiwanese identity as distinct from Chinese identity is real. The reality of Taiwanese identity poses challenges for resolving the debate over Taiwan's future relations with China, particularly in nationalistic responses due to lack of Chinese experience with Taiwanese society.

Melissa J. Brown is Assistant Professor of Anthropological Sciences and Research Affiliate at Asia-Pacific Research Center at Stanford University. She has been researching changing identities in Taiwan and China since 1991. Her books include Negotiating Ethnicities in China and Taiwan (University of California, Institute for East Asian Studies, 1996) and Is Taiwan Chinese? The Impact of Culture, Power, and Migration on Changing Identities (University of California Press, 2004).

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Melissa J. Brown Speaker Stanford University
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In today's global economy, access to resources around the world has never been easier. The high tech industry has always been in the forefront of globalization in lowering costs, acquiring talent as well as serving markets. For instance, Asian countries have long been known for their vast manufacturing bases for western high tech industry.

In recent years, thanks to Y2K, India has become the leader in software outsourcing. China, given its expanding economy as well as its open market direction, has rapidly become the emerging location for multi-national semiconductor companies to outsource their product development amidst China's own burgeoning integrated circuit (IC) industry. Mr. Lee has first-hand experience in building and managing an IC product development center in Shanghai, China. He will discuss the challenges of operating a R&D organization in an environment of different languages and cultures. He will also share his vision of the future of the IC industry in China.

Mr. Lee is Group Vice President and general manager of Timing Solutions Products at Integrated Device Technology, Inc.(IDT), a public semiconductor company of $650 million annual sales, focusing on valued-added solutions for communication, consumer and computing markets. He has been with IDT for the last 22 years and has served various management roles. In 2001, he architected the acquisition of Newave Semiconductor Corporation in China and established the Shanghai Product Development Center for IDT. Before joining IDT in 1984, Mr. Lee spent 5 years at Intel Corporation as a technologist for the early development of flash memory technology. Mr. Lee earned his B.S. degree in Electrical Engineering from National Taiwan University in 1975 and M.S. degree from Case Western Reserve University in 1979.

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Jimmy Lee Group Vice President & General Manager of Timing Solutions Products Speaker Integrated Device Technology, Inc.
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Susan Chira will speak about rising China, and compare it to her 20-year-old experience as a journalist reporting on risen Japan and rising Korea. Even as Iraq grabs the headlines, the story of Rising China is one of the most gripping, the most resonant of our times. It presents enormous and obvious policy challenges, and considerable journalistic challenges, too. What is familiar in China's rise, and what is unique? How do you cover and present to readers a country that is at once exuberant and fearful, increasingly prosperous and increasingly unequal, newly open and reflexively repressive? The New York Times has had a personal brush with these many faces of China: its researcher, Zhao Yan, is still mired in jail after a year, charged with violating its vaguely-written, draconian law on state secrets.

Susan Chira was named foreign editor for The New York Times in January 2004. Previously, Ms. Chira had been editorial director of book development since September 2002. Before that she was the editor of the Week in Review section at The Times since October 1999, after having served as deputy foreign editor of the newspaper since February 1997. Prior to that, she served in a variety of reporting positions including national education correspondent, correspondent for the newspaper in Tokyo from October 1984 until February 1989, metropolitan reporter in the Albany and Stamford bureaus, and reporter for the Business Day section.

Ms. Chira joined The Times as a trainee on the metropolitan desk in 1981 and was promoted to reporter in July 1982.

She received a B.A. degree in history and East Asian studies from Harvard University in 1980, graduating summa cum laude, Phi Beta Kappa. As an undergraduate, she was a reporter and later president of The Harvard Crimson. She studied Japanese for a year and a half at the Inter-University Center for Japanese Language Studies in Tokyo and at Middlebury College, Vt.

Susan Chira is married to Michael Shapiro, a writer and assistant professor of journalism at the Columbia University Graduate School of Journalism. They have a daughter and a son.

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Susan Chira Foreign Editor, The New York Times Speaker
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For years policymakers in China have advocated creating "Silicon Valleys" in China, but only recently has China's semiconductor industry taken off. Rather than the state leading the way, economic globalization has created the large flow of capital and knowledge to the developing world that has spurred China's technological development in recent years.

However, not all firms in China benefit equally from these inflows of financial and human capital. Presenting both industry-wide data and case studies of individual firms, Dr. Fuller will explain how the politics of finance in China shape which Chinese chip firms become fast learners able to compete in world markets and which ones remain technological laggards.

Douglas Fuller has spent over ten years researching technological development in East Asia. Most recently, he completed a doctorate at MIT in political economy. The topic of his thesis was technological development in China's IT industry. For this and previous research, he has interviewed IT firms in Malaysia, Japan, Korea, Taiwan, the People's Republic of China and the US. He has published articles in Industry and Innovation and other peer-reviewed journals.

Part of SPRIE's Greater China and the Globalization of R&D seminar series.

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Doug Fuller SPRIE Postdoctoral Fellow Speaker
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There are currently an estimated 840,000 people in China who are infected with HIV. The largest two groups that have been affected are injection drug users and former plasma donors. Recent demographic and economic changes in China could and may be fueling an increase in sexual transmission in China. Dr. Nancy Shulman will give a brief overview of HIV in China and the governmental response. Future collaborative efforts with Stanford will also be discussed.

Co-sponsored with the Center for East Asian Studies

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Nancy Shulman Instructor of Medicine, Division of Infectious Diseases, School of Medicine, Stanford University Speaker
Seminars
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