vol 2 2016 CHINA STUDIES featuring articles by REVIEW Benjamin Pollok Patrick Lozada Cheng Zhang David Rubin Adrienne Dalton Peter C.Y. Kim Jakob Bund Shuxian Luo Winston Kung vol 2 2016 CHINA © 2016 The China Studies program of The Johns Hopkins University The China Studies Review is a editorial board Paul H. Nitze School of Advanced International Studies publication of the China Studies All rights reserved. program of The Johns Hopkins Editor-in-Chief University School of Advanced REVIEW STUDIES Design: www.SchumannStudioCreative.com Printed on Rolland Hitech - with a minimum of 30% post-consumer fiber, International Studies (SAIS). The Natalie Lynch made using renewable biogas energy. Review publishes interdisciplinary work by SAIS graduate students The China Studies program does not take institutional positions conducting research on China, Staff Editors on public policy issues; the views represented herein are the author’s including topics in history, politics, and do not necessarily reflect the views of its staff, or trustees of economics, political economy, Johns Hopkins University. Brittany Coley policy, energy and the environment. For electronic copies of this report, visit: Adam Lee https://www.sais-jhu.edu/content/china-studies-review#about Kaj Malden China Studies Program The Johns Hopkins University Paul H. Nitze School Pola Shim of Advanced International Studies Rome Building, Suite 606-612 1619 Massachusetts Avenue, N.W. Matt Sindelar Washington, D.C. 20036 Tel: +1 202 663 5816 http://www.sais-jhu.edu/content/china-studies#overview Benjamin Tsui [email protected] Faculty Advisor Carla Freeman CHINA table of REVIEW STUDIES contents Letter from the Editor Making the Transition: Examining China’s Environmental Natalie Lynch … 1 Policymaking Model vol 2 Potential Gains from a U.S.-China After the Rise of Xi Jinping | Bilateral Investment Treaty David Rubin … 26 2016 Benjamin Pollok … 2 Covered with Dust: China’s Shifting Public Attitudes Position in Regional Approaches in Japan and China to Yellow Dust in the Twenty-First Century: Peter C.Y. Kim … 46 Why So Negative? Cheng Zhang … 4 Same Goal, Different Trajectories: China and India’s Knife Attacks on Pro-Democracy Naval Modernization Protesters Remind Hong Kong in Comparative Perspective of the Triad’s Political Past Shuxian Luo … 61 Adrienne Dalton …6 Assessing the Decision Process Limited Agreement, Maximized Behind U.S. Military Intervention Trust: Assessing the Prospect in a Cross-Strait Crisis: for an Effective U.S.-China A Scenario-Driven Analysis Cybersecurity Coalition Winston Kung … 79 Jakob Bund … 8 China’s Creative Stagnation: The Failure of Zone-Based Reform Patrick Lozada … 17 THE CHINA STUDIES PROGRAM | SAIS CHINA cooperate in the absence of trust. Patrick letter from Lozada discusses China’s “creative indus- REVIEW STUDIES tries”, and the shortcomings of China’s the editor creative special economic zones in foster- ing an innovation economy. David Rubin builds upon Bruce Gilley’s spectrum of democratic and authoritarian environ- mentalism and finds that in the context of environmental policymaking, China is This is an exciting time for China scholars transitioning towards more inclusivity and as the country continues to undergo major grassroots engagement. Peter Kim also vol 2 transformations in its domestic and interna- examines China’s environmental policy and | tional spheres. Within the last year, China uses dust and sandstorms, also known as 2016 has founded a major international financial “yellow dust”, to examine the challenges institution even as its economic growth rate and opportunities for environmental coop- has fallen to just above 6 percent. At the eration in Northeast Asia. Shuxian Luo same time, we have witnessed an escala- conducts a comparative analysis of China tion in hostilities in the South China Sea and India’s naval modernization efforts, between China and its neighbors as well as noting that while China’s rapid economic increased tensions between China and the development has spurred its naval modern- United States over cybersecurity. While no ization at a more rapid pace, there are other one journal can hope to capture all of these important elements such as differing threat fascinating developments, we are pleased perceptions and alliance options that help to present the second edition of the China to explain India’s relative lag in naval mod- Studies Review as a showcase of student ernization. Finally, Winston Kung presents scholarship at the Johns Hopkins School of a Taiwan Straits crisis scenario analysis that Advanced International Studies and hope examines the legal, diplomatic, strategic, it will further the understanding of China’s and domestic opinion factors that would opportunities and challenges. likely affect a U.S. response, concluding that U.S. diplomatic and military leverage In our first section, we introduce three would eventually lead China and Taiwan to short pieces that examine important de-escalate tensions in the region. issues in U.S.-China investment relations, public opinion in China and Japan, and We in the China Studies program are excited the Hong Kong pro-democracy move- to have this opportunity to showcase student ment. Benjamin Pollock examines the work on China’s domestic developments and progression of negotiations between the evolving foreign policy. I would like to take United States and China in adopting a this opportunity to thank our staff editors high-quality bilateral investment treaty. and writers for their enthusiasm and hard Cheng Zhang uses data from Genron to work in making this publication a reality and understand the reasons behind mutual dis- to our faculty advisor, Carla Freeman, for trust between China and Japan. Adrienne her ongoing support of the Review. Dalton looks at the role of Hong Kong triads in the suppression of the 2014 Hong Kong Natalie Lynch pro-democracy demonstrations. Washington, D.C. Our second section features six research articles covering a wide range of topics. Jakob Bund explores U.S.-China relations in cyberspace and provides an alternative framework by which the two countries can THE CHINA STUDIES PROGRAM | SAIS 1 CHINA foreign firms can invest. This is the first Chi- About the Author Potential Gains nese BIT that will function on the basis of a REVIEW STUDIES “negative list”, meaning that U.S. firms will Benjamin Pollok is a second year SAIS stu- from a U.S.- be able to invest directly in all industries dent concentrating in China Studies. After except those explicitly listed as exempt graduating from Colgate University in 2011, China Bilateral from international investment. Ben worked for several years in interna- tional education, first for Peking University Investment Treaty Though some critics have questioned Chi- and then for CET Academic Programs. In na’s ability to agree and adhere to a high the summer of 2016, Ben interned at the quality BIT, over the past few years there Carnegie-Tsinghua Center for Global Policy Benjamin Pollok have been positive indications of China’s in Beijing. vol 2 willingness to create more robust invest- | ment agreements. Preceding their trilateral 2016 Since 2013, negotiations between the Free Trade Agreement, in 2012 China, 1 Toward a US-China Investment Treaty, United States and China on a Bilateral Japan and Korea signed an investment Peterson Institute for International Economics, Investment Treaty (BIT) have made incre- treaty. This agreement was China’s most PIEE Briefing 151, February 2015, 3. mental progress. A high quality BIT, based ambitious investment treaty yet. The U.S.- principally on the 2012 U.S. Model BIT, China BIT would go further in expanding 2 The White House Office of the Press Secretary. could be mutually beneficial and would market access, meaning that U.S. investors “Fact Sheet: U.S.- China Economic Relations.” represent a substantial step in China’s would enjoy the broadest array of invest- September 15, 2015. liberalization of market access for foreign ment opportunities of any foreign investors investors. If negotiations are successful, the in China. BIT will broaden two-way streams of invest- ment and equip U.S. investors with greater Further economic integration may also legal protections and transparency. strengthen U.S.-China diplomatic relations, and greater clarity in investment regula- Of the two countries, the U.S. has the most tions and dispute settlements may reduce to gain from a binding, high quality invest- the political friction that has resulted from ment treaty. Countries with their own BITs a mutual lack of transparency. The BIT with China have greater opportunities for could even provide a launching point for investment, including greater access to an eventual bilateral trade agreement, or the manufacturing, service and financial China’s integration into the Trans-Pacific sectors. In 2015, the U.S. held a meager Partnership (TPP). 1.2 percent of total foreign investments in China. 1 A high quality BIT would address China’s slowing economic performance many of the key concerns that prevent U.S. may provide an opportunity for expe- investors from entering the Chinese market. dited negotiations over the coming year. Namely, the BIT would open previously In light of China’s increasingly ambitious inaccessible industries for foreign direct BITs in recent years and its desire for a investment (FDI) in China and potentially U.S.-China BIT as an economic stimulus, an ease China’s controversial law requiring opportunity for a high quality U.S.-China BIT U.S. firms to partner with domestic firms has never been greater. With the Obama in “joint ventures”. administration’s designation of the U.S.- China relationship as “a top priority”, 2 While the proposed U.S.-China BIT is a the U.S. should take advantage of China’s major departure from China’s existing stagnation as an opportunity to expedite bilateral and regional BITs, it marks the BIT negotiations. next logical step in China’s broader trade liberalization process.