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An Assessment of Chinese Thinking on Trade Liberalization

by Jialin Zhangvia Analysis
Friday, April 18, 1997

An examination of recent theoretical and empirical research in China about that country's trade protection policies reveals that an increasing number of leading economists now favor the liberalization of the Chinese market economy and its closer integration with the world economy. Chinese policy toward foreign trade reveals greater domestic market openness. Not only has China deeply cut tariffs in recent years but it is committed to even greater cuts in the next few years to an average rate of 15 percent by the year 2000, a level maintained by most developing countries. Chinese policymakers, recognizing that greater foreign direct investment and imports mean acquiring foreign technology, are now eager to liberalize the regimes trading system and to reduce protection for those high-cost uncompetitive enterprises and industries.

Nuclear Blackmail: The 1994 U.S.–Democratic People's Republic of Korea Agreed Framework on North Korea's Nuclear Program

via Analysis
Tuesday, April 1, 1997

In 1993 the Democratic People's Republic of Korea (DPRK) refused to let international inspectors see whether it had secretly separated plutonium for bombs. Subsequent negotiations led to a 1994 U.S.–DPRK Agreed Framework that stopped the North's plutonium production but at heavy political and financial cost. The 1994 agreement and its background are the subjects of this paper.

The United States will supply North Korea with two large nuclear power reactors worth more than $4 billion (mainly from South Korea and Japan) and a substantial fuel oil supply until the first power reactor begins to operate. North Korea has stopped running a small plutonium production reactor and constructing two larger ones. The disputed inspections were postponed until the United States supplied a substantial portion of the new reactors. The DPRK is supposed to have dismantled its indigenous facilities by the time both new reactors are completed.

The agreement leaves the United States subject to the continued threat of a restart of DPRK plutonium production. One way to limit this would be through "phased performance"--the progressive dismantling of DPRK facilities as the new reactors are built. Although the DPRK will object to starting to dismantle now, it will be in a stronger position to object when it has the new reactors.

The End of Two Evil Empires

by Lewis H. Gannvia Hoover Digest
Thursday, January 30, 1997

Fifty-five years ago, Germany and Japan were waging war to establish world empires. Fifty years ago, they were beginning to dig themselves out from under the rubble. Hoover fellow Lewis H. Gann explains the collapse of the Third Reich and the Empire of the Sun.

When an Asian Tiger Trips

by Hilton L. Rootvia Hoover Digest
Thursday, January 30, 1997

Until recently, Indonesia, with more than five times the landmass of Japan and over ten times the population of Australia, could boast both political stability and rapid economic growth. No longer. Hoover fellow Hilton L. Root explains what's gone wrong.

The Short March

by Henry S. Rowenvia Hoover Digest
Thursday, January 30, 1997

When will China become a democracy? The answer is, around 2015, says Hoover fellow Henry S. Rowen.

North Korea at a Crossroads

via Analysis
Wednesday, January 1, 1997

North Korea remains a country difficult for outsiders to analyze, given the paucity of hard data. Yet certain facts have been established. The economy is in crisis, a product not only of the Russian demise and the recent floods but of the inadequacies of a Stalinist economic strategy: autarky, imbalance, and overbureaucratization. A growing number of the elite now recognize these facts, and the momentum for reform is rising despite perceived political hazards. Whether it will be in time to prevent collapse is debated by outside observers.

Politically, the effort is to maintain the existing order by reproducing Kim Il Sung in his son, Kim Jong Il. Young Kim is cultivating the military assiduously and carefully replacing his father's guerrilla generation with individuals closer to his age, some of them relatives. There are no signs of cleavage at this point, but the decision-making structure remains difficult to discern. The goal, however, is clear: total unity under the leader and party.

The Democratic People's Republic of Korea's (DPRK's) foreign policy is rational from the North's perspective: achieve diplomatic relations with the United States and Japan while relegating the Republic of Korea (ROK) to the sidelines. Yet improvements in North-South relations will be essential if the broader goal is to be reached. Meanwhile, relations with China are relatively satisfactory but lack the old warmth, and those with Russia are still tepid not- withstanding Moscow's efforts.

Despite the uncertainties surrounding the DPRK's future, the interests of others, including the ROK and the United States, lie in seeing this state undergo an evolutionary process rather than a collapse. Thus policies should be directed toward that end, acknowledging that the outcome will depend heavily on North Korean leaders and their decisions.

North Korean Economic Reform and Political Stability

by Bruce Bueno de Mesquitavia Analysis
Saturday, June 1, 1996

Using a model with a strong track record of predictive accuracy, we posit the unraveling of Kim Jong-Il's hold over power in North Korea. Our analysis suggests that the North Korean military and leaders of heavy industry in North Korea are pivotal powers who control North Korea's destiny over the next few years. We infer from the evidence that Kim Jong-Il's family and the second generation of leaders are opportunists who are likely to break ranks with Kim Jong-Il to secure their own well-being. The result of their anticipated break with Kim Jong-Il is likely to be a slowing of economic reform and of economic openings to South Korea. North Korea is expected to enter a period of political instability that will render Kim Jong-Il little more than a figurehead. Barring strategic efforts by the partisans and some others with credible leverage, North Korea is unlikely to improve its economy or stabilize its government in the next two or three years.

The NonThreat of North Korea

via Hoover Digest
Tuesday, April 30, 1996

North Korea represents one of the last Stalinist nations on earth--a powerful military, a poor populace, and rulers who can appear deranged. Will North Korea attack South Korea, as it did in 1950? Relax, says Hoover fellow Robert J. Myers.

The Right Kind of Corruption

by Hilton L. Rootvia Hoover Digest
Tuesday, April 30, 1996

Payoffs and slush funds may be rampant in Asian countries such as South Korea and Taiwan, but they don't seem to have interfered with economic growth. Hoover fellow Hilton L. Root explains why.

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