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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.

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.

Japan’s first female prime minister, Sanae Takaichi, began her tenure with strong approval ratings. Yet rising tensions with China over her recent comments about Taiwan and doubts over her government's newly unveiled stimulus package now loom large. Kiyoteru Tsutsui, the director of APARC and our Japan Program, assesses Takaichi's first month in office and what to watch for next. Get his full analysis in our APARC Briefing:

APARC Briefing is a new format we are experimenting with to provide concise, evidence-based analysis of fast-moving developments in Asian affairs. To stay up to date on future installments in this new video series, subscribe to APARC's YouTube channel.

Stanford University's Walter H. Shorenstein Asia-Pacific Research Center (APARC) is pleased to invite nominations for the 2026 Shorenstein Journalism Award. The award, which carries a cash prize of US$10,000, recognizes outstanding journalists and news media outlets for excellence in covering the complexities of the Asia-Pacific region. The 2026 award will honor a Western news media outlet or a journalist whose substantial body of work has primarily appeared in Western news media. APARC welcomes award nomination submissions from news editors, publishers, scholars, news outlets, journalism organizations, and entities focused on researching and analyzing the Asia-Pacific region. Entries are due by February 15, 2026.

The award defines the Asia-Pacific region broadly as including Northeast Asia, Southeast Asia, South Asia, Central Asia, and Australasia. Both individual journalists with a considerable body of work and news media outlets are eligible for the award. Nominees’ work may be in traditional forms of print or broadcast journalism and/or in new forms of multimedia journalism. The Award Selection Committee oversees the judging of nominees and is responsible for selecting honorees.

An annual tradition since 2002, the award honors the legacy of Mr. Walter H. Shorenstein, APARC's benefactor, and his twin passions for promoting excellence in journalism and understanding of Asia. Throughout its history, the award has recognized world-class journalists and news media who push the boundaries of coverage of the Asia-Pacific region and champion press freedom and human rights.

Recent honorees include Netra News, Bangladesh's premier public interest journalism outlet; Chris Buckley, the New York Times' chief China correspondent; The Caravan, India’s esteemed magazine of long-form journalism; Emily Feng, then NPR's Beijing correspondent; and Nobel Laureate Maria Ressa, CEO and president of the Philippines-based news organization Rappler. Visit the award page to learn more.

Award nominations are accepted electronically through Sunday, February 15, 2026, at 11:59 PM PST.  Visit the award nomination entry page for information about the nomination procedures and to submit an entry.

APARC will announce the winner by May 2026.

Please direct all inquiries to aparc-communications@stanford.edu.

On October 21, 2025, Ms. Sanae Takaichi, a hardline conservative, became the first female Prime Minister of Japan, marking a historic moment for the country, which has one of the worst records among the world's developed democracies for gender equality. Yet, Takaichi's views on empowering women are complex, and she steps into office at a moment of internal party weakness and intense domestic and regional strategic pressures. On October 28, she will welcome President Trump to Tokyo, where the two leaders will hold a summit meeting.

In the following video explainer, Stanford sociologist Kiyoteru Tsutsui, the Henri H. and Tomoye Takahashi Professor and Senior Fellow in Japanese Studies at the Shorenstein Asia-Pacific Research Center (APARC) and the director of APARC and its Japan Program, discusses Takaichi’s background and rise to power, her cabinet choices, and what they signal for Japan's future. Watch:

Video: Michael Breger

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In the Media

On October 28, 2025, on the heels of the summit meeting of Prime Minister Takaichi and President Trump, Tsutsui joined Scott Tong, host of WBUR's Here & Now, to discuss Takaichi's rise to power and what's next for Japan. Listen:

This post, first published by the Harvard Law School Forum on Corporate Governance, is based on the co-authors' recent European Corporate Governance Institute - Law Working Paper No. 872/2025.

Introduction

Conventional accounts of the rivalry among global stock exchanges emphasize regulatory competition to attract initial public offerings (IPOs). This framing – often cast as a “race to the bottom” – suggests that exchanges compete primarily by lowering governance and disclosure standards to secure marquee listings. In a new paper, we argue that this view is both incomplete and outdated. By examining stock exchanges through the broader lens of political economy, we demonstrate that IPO competition represents only a fraction of the forces shaping today’s capital markets. Exchanges have become strategic assets at the intersection of commercial imperatives, national economic goals, and geopolitical rivalry.

Our analysis makes two central contributions. First, we show that the importance of IPO competition to exchanges, and the regulatory arbitrage thought to propel it, is often overstated. While competition, particularly between New York and non-US exchanges, can be fierce, IPOs generate only marginal revenues for exchanges in comparison to revenues from data and analytics, and private capital is an increasingly important alternative source of finance. Second, we bring nation states into the picture. Governments are active participants in global stock exchange competition, with strong economic, policy, and geopolitical stakes in the health of their domestic or regional exchanges. We highlight how exchanges increasingly function as mechanisms of policy transmission, instruments of financial sovereignty, and geopolitical screening devices – sometimes at the expense of their economic functions.
 

The Shein Listing Saga as a Microcosm

The recent saga of fast-fashion retailer Shein illustrates the new dynamics. After confidentially filing for a New York listing in 2023, Shein encountered pushback from U.S. lawmakers over alleged use of forced labor in its supply chain. It then turned to the London Stock Exchange, which was eager to obtain a high-profile listing despite the allegations, only to face heightened scrutiny from U.K. advocacy groups. Ultimately, Beijing itself blocked the company’s foreign listing, possibly fearing the enhanced scrutiny it would entail, forcing Shein to pursue a Hong Kong listing instead.

This episode highlights several themes we explore in the paper: the enduring prestige of high-profile IPOs and the willingness of regulators to adjust standards to obtain them; and, crucially, the role of governments in shaping access to capital markets in light of geopolitical tensions and policies unrelated to investor protection.
 

Limits of IPO Competition

Stock exchanges have long competed for listings, including by lowering listing or governance standards, but this rivalry is subject to important limitations and caveats:

1. Demutualization and Profit Motives: Most exchanges have demutualized and now operate as profit-oriented shareholder-owned corporations. Listing fees today account for only a small fraction of exchange revenues. For example, listing fees on the London Stock Exchange account for just 3% of its parent company’s income; for the NYSE, the figure is around 10%.
    
2. Regulatory Competition and Governance Standards: Exchanges have historically relaxed rules to secure listings. The London Stock Exchange diluted its rules on related-party transactions in an unsuccessful attempt to attract Saudi Aramco. London, Hong Kong, and Singapore revised their listing rules to allow multiple-voting shares to compete with U.S. exchanges. While these episodes raise familiar race to the top/bottom questions, the importance of regulatory arbitrage in the global capital markets today can be overstated, in part for reasons explained in points 3 and 4 below.
    
3. Economic Motivations Beyond Regulation: Many firms choose the NYSE or Nasdaq not principally for regulatory reasons but for liquidity, visibility, and greater opportunities in areas such as M&A in the huge U.S. market. To name a few recent examples, Flutter Entertainment, CRH, Wise, Spotify, and Arm all explained that they listed in New York for these reasons.
    
4. Competition from Private Capital: Perhaps the most important caveat is that exchanges increasingly compete less with one another than with private markets. Assets under management in private equity, venture capital, and private credit have ballooned from $9.7 trillion in 2012 to over $24 trillion by 2023. Firms avoid public markets to sidestep disclosure burdens, compliance costs, and shareholder activism. Since 2022, take-private deals have outpaced IPOs more than threefold.
    

Taken together, these trends suggest that the long-running narrative on regulatory competition for IPOs misses major contemporary market dynamics.
 

States as Stakeholders

If capital is global, why should governments be deeply invested in the fate of their domestic exchanges? We identify three reasons.

1. Direct and Indirect Economic Benefits: Domestic exchanges generate tax revenues, create jobs, and facilitate capital formation. They provide a platform for small and medium-sized enterprises less likely to seek foreign listings, thereby stimulating domestic firm growth and innovation.
    
2. Preventing Corporate Exodus: Policymakers fear that firms listing abroad may eventually relocate headquarters, talent, and tax bases overseas. European reports, for example, have warned of a “technology drain” as innovative firms list on U.S. markets. Domestic exchanges thus serve as anchors against corporate flight.
    
3. Home Bias: Evidence shows that investors retain a preference for domestically listed companies. Governments reinforce this tendency by encouraging pension funds and other institutional investors to allocate assets domestically.
    

Exchanges as Geopolitical Instruments

Perhaps the most profound shift lies in the politicization of public capital markets. Exchanges now function not simply as neutral financing infrastructure but as levers of economic statecraft and policy transmission. Some examples:

1. United States–China Rivalry: The Holding Foreign Companies Accountable Act, Ant Group’s aborted IPO, Didi’s delisting from the NYSE, and heightened scrutiny of Chinese firms on U.S. markets illustrate how capital markets are enmeshed in national security, data security, and geopolitical concerns.
    
2. Europe: The EU’s Capital Markets Union, recently reframed as the “Savings and Investment Union,” is now explicitly tied to European economic sovereignty and geopolitical positioning. Separately, ESG regulations such as the CSRD and the Supply Chain Directive extend Europe’s normative agenda globally by imposing climate and human rights obligations on listed firms.
    
3. Other Jurisdictions increasingly view exchanges as state assets. For example, Singapore has called relisting on the SGX a “national duty.” India frames domestic listings under the banner of self-reliance. Israel highlights its stock exchange as a force for resilience in wartime. Japan has used the TSE as a tool to implement corporate governance reforms.
    

In short, capital market policies and listing decisions now intersect with areas of government interest well beyond economics, including national security, human rights, financial sovereignty, and industrial policy. But efforts to harness exchanges for strategic ends risks fragmenting global markets and undermining their economic role.
 

Conclusion

Global stock exchanges today operate in a transformed environment. They remain commercial enterprises competing for listings, but they are also strategic assets deeply embedded in state policy and geopolitical rivalry. High-profile IPO competition, though still active, is only part of the story. As private capital expands and governments assert new forms of control, exchanges have been repurposed as instruments of financial sovereignty and normative policy enforcement.

About the Authors

Curtis J. Milhaupt is the William F. Baxter – Visa International Professor of Law at Stanford Law School, Senior Fellow, by courtesy, at the Freeman Spogli Institute for International Studies at Stanford University, and Fellow at the European Corporate Governance Institute. Wolf-Georg Ringe is Professor of Law and Finance at the University of Hamburg, Visiting Professor at the University of Oxford, and Research Member at the European Corporate Governance Institute.

This opinion piece was first published by Project Syndicate >

STANFORD/LOS ANGELES – It is tempting to frame the Sino-American economic rivalry as a clash between engineering doers and lawyerly naysayers, as the Chinese-Canadian analyst Dan Wang does in his new book Breakneck: China’s Quest to Engineer the Future. But this is a false dichotomy, because law is a crucial feature of US capitalism.

We have heard the lawyers-versus-engineers argument before. Forty years ago, Japan’s economic rise induced similar anxieties, most famously articulated in the American sociologist Ezra Vogel’s book Japan as Number One: Lessons for America. Commentators fretted that America was mired in lawsuits while Japan’s best minds were solving problems and driving their country’s meteoric growth. Yet over the ensuing decades, the United States, with its mammoth legal industry, outperformed Japan by a wide margin.

Today’s panic about an Asian economic challenger is equally unwarranted and counterproductive. Invoking national security and the competition with China, Donald Trump’s administration is pursuing increasingly anti-capitalist and legally dubious interventions into private industry, with potentially high costs for American dynamism.

Continue reading at Project Syndicate >

The Walter H. Shorenstein Asia-Pacific Research Center (APARC) is pleased to invite applications for a suite of fellowships in contemporary Asia studies to begin in fall quarter 2026.

The Center offers postdoctoral fellowships that promote multidisciplinary research on Asia health policy, contemporary Japan, and contemporary Asia broadly defined, as well as postdoctoral fellowships and visiting scholar positions with the Stanford Next Asia Policy Lab and a visiting fellow position on contemporary Taiwan. Learn more about each opportunity and its specific application requirements:

2026-27 Asia Health Policy Program Postdoctoral Fellowship

Hosted by the Asia Health Policy Program at APARC, the fellowship is awarded to one recent PhD recipient undertaking original research on contemporary health or healthcare policy of high relevance to countries in the Asia-Pacific region, especially developing countries. Appointments are for one year beginning in fall quarter 2026. The application deadline is December 1, 2025.

2026-27 Japan Program Postdoctoral Fellowship

Hosted by the Japan Program at APARC, the fellowship supports research on contemporary Japan in a broad range of disciplines, including political science, economics, sociology, law, policy studies, and international relations. Appointments are for one year beginning in fall quarter 2026. The application deadline is December 1, 2025.  

2026-27 Shorenstein Postdoctoral Fellowship on Contemporary Asia

APARC offers two postdoctoral fellowship positions to junior scholars for research and writing on contemporary Asia. The primary research areas focus on political, economic, or social change in the Asia-Pacific region (including Northeast, Southeast, and South Asia), or international relations and international political economy in the region. Appointments are for one year beginning in fall quarter 2026. The application deadline is December 1, 2025. 
 

2026-27 Taiwan Program Visiting Fellowship

Hosted by the Taiwan Program at APARC, the fellowship is awarded to one mid-career to senior-level expert with extensive experience studying contemporary Taiwan. The fellowship research focus is on issues related to how Taiwan can meet the challenges and opportunities of economic, social, technological, environmental, and institutional adaptation in the coming decades, using a variety of disciplines, including the social sciences, public policy, and business. The application deadline is March 1, 2026.