EU-Asia Relations and the Race for Global Resource Leadership - 9th Workshop - Regionalprogramm Energiesicherheit und Klimawandel in Asien und Pazifik
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Race No. 1: Energy Resources
The first paper was presented by Dr. Ali Cheshmehzangi from the University of Nottingham Ningbo China on “Adaptive Thinking for Resilience Enhancement: The Multi-Scalar Analysis from Communities to Global Resource Management During the Outbreak Events”. Resource management through adaptive thinking has been a common concept for business operation. However, it was rarely seen to be applied on community, city, or regional scale. The pandemic this year uncovered the need for enhancing the resilience of key infrastructure to disasters, and one probable way of achieving greater resilience is through adaptive thinking. By making adaptive use of current resources, communities, cities, and even countries increase their capability to prevent catastrophes from happening or better deal with their negative impacts. Dr. Cheshmehzangi proposed that apart from adaptive use of resources, adaptive production, as well as regional coordination, would also greatly enhance resilience to disaster events.
The second paper was presented by Dr. Susan T. Jackson from Stockholm University on “Sustaining Risk: Managing Security & ESG”. ‘Sustainability’ has been mentioned in financial markets for quite some time, but how do these markets and rating companies actually view them? Are sustainability and political risks treated separately in business communication of risk? Dr. Jackson found out that even though Sustainable Development Goals (SDGs) have been emphasised in climate mitigation policies, there was no linkage with politics because political risks were not mentioned at all. Thus, the stock markets and rating companies still hold a traditional view on political risk while SDGs are considered a compliance issue only. Dr. Jackson, therefore, argued that business lacks a drive for systematic change.
The final paper presented in this Race on Resources was by Dr. Kaho Yu from Verisk Maplecroft on “Political Economy Risks in the Global Energy Supply Chain: From Oil Price War to COVID-19 Crisis”. The energy market has been through a turbulent year in 2020. The ongoing pandemic, coupled with the oil price war produced oil prices at unprecedented lows. Therefore, the question is: how do energy markets, environmental, social and governance criteria (ESG), and political risks evolve during the pandemic? The pandemic has caused major disruption to the supply chain. To combat this, companies are diversifying their supply chain outside of China, the so-called ‘China-plus-one’ strategy. Manufacturing of products for the Chinese market will remain in China while manufacturing for other markets will likely relocate abroad to increase diversification and resilience of the supply chain. In terms of energy, due to diplomatic tension, China is seeking to reduce vulnerability by diversifying its energy and resource imports as well. At the same time, it seems that major greenhouse gas emitting countries are prioritising economic recovery rather than energy transition due to structural issues, while developed countries like the European Union (EU) member states will take this crisis as an opportunity to make a leap in the energy transition.
Race No. 2: Political Economy, Industiral Policy & Infrostructure
The Workshop continued with presentations on political economy. The first presenter was Prof. Dr. John Ryan from the London School of Economics with the paper on “The United Kingdom’s unclear road to trade deals with the European Union & China”. Since Brexit, the United Kingdom (UK) has been looking for establishing some sort of trade relationship with the EU or China. However, such a goal seems to be far-fetched. For China, its priority is on domestic demand as the internal market continues to expand; and the current political environment between the UK and China does not favour a trade deal. Regarding the EU, no-deal Brexit appeared to be the prospective scenario because the level playing field is tilted towards the EU. Thus, after Brexit, the UK is highly likely to be left without any special trade relationship with its major trade partners.
The next presenter was Dr. Junchi Ma from the Chinese Academy of Social Sciences with the paper on “The Small Player in Big Game: Central & Eastern Europe in China-Europe Relations”. Central and Eastern Europe countries, due to their small country status, are seen to have little strategic autonomy and political sovereignty. Because of their heavy reliance on Western markets and relatively small trade volumes with other big powers like China, they do not have the leverage to influence the decisions of the EU. Thus, their interests are often overlooked in EU-China relations. Without political and economic sovereignty and autonomy, Dr. Ma concluded, the region cannot be seen as an independent power in EU-China relations.
The third paper was presented by Dr. Anastas Vangeli from the EU*Asia Institute at ESSCA School of Management on “The Free Market in Retreat? Cooperation & Competition as Pathways of Diffusion of State Capitalism”. In the Belt & Road Initiative (BRI), there was norm diffusion of state capitalism at the expense of the free market, Dr. Vangeli observed. This norm diffusion was done through either cooperation or competition. First, in BRI cooperation projects, countries introduced legislation overriding the free-market principles. In the EU’s case, such instances are happening in EU’s periphery. Second, due to the EU’s trend to caution about China’s involvement, the EU is fostering competition through securitisation of economic assets within the EU and more scrutiny of interaction between China and the EU. This phenomenon does not conform with the free market principles either. In conclusion, Dr. Vangeli asserts that while adapting to rising China, the EU, itself, is changing as well. Although no country has fully converted to state capitalism, its underlying ideas are diffusing into the EU’s system through the process of hybridisation, and now China is adapting to EU’s changes as well.
The last paper in this Race was from Dr. Astrid Pepermans from the Free University of Brussels on the topic of “Scoring Points in Europe: China’s Football Strategy Towards the European Union”. In the football world in Europe, China’s involvement can be seen more and more often. Sponsorships, partnerships, and football club acquisitions. Chinese money keeps pouring into the European football market. Dr. Pepermans observed that Chinese private companies were receiving government support while making these investments. It is because these investments strategies align with national interest in football clubs. Football is considered a very useful public relations tool for Chinese companies to increase their exposure exponentially in a positive fashion. So, China sees it as a means to develop its soft power with very few drawbacks since it believes positive images of its companies will, in turn, paint a positive image towards the whole country.
Race No. 3: Circular Economy & Materials
The first paper in this session was presented by Shoaib Khan from the IGIB Council for Scientific & Industrial Research on the topic of “Exponential Technologies for Regenerative Capitalism”. Global resource extraction is experiencing exponential growth, and the conventional linear model of production is not adequate to satisfy such demand. As a result, circular economy, or even spiral economy, is nothing but a necessity in the long run. Through the use of exponential technology, the current by-product of industrial production is capable of being a platform for limitless possibilities. As of late, countries like Germany, the Netherlands, China, and Japan have enacted legislations in preparation for this economic transformation.
The next presenter in this Race was Maximilian Rech from the ESSCA School of Management, Shanghai, with his paper on “Coopetition in Geo-Economic-Policy – A Foreign Direct Investment Strategy for the Belt & Road Initiative”. China promised that the BRI would be open and transparent for the world to participate. Nonetheless, the EU plays very little part in its projects. However, the involvement of Western companies in these projects can be observed despite the lack of Western presence at the state level. It was because the strengths of these Western companies were complementary towards the BRI projects in question and thus leading to network-level coopetition, meaning that there is still room for involvement from international actors. Even though there is competition at the state level, Rech concludes that complementary strengths of Western companies can lead to cooperation in individual projects at the business level.
Race No. 4: Business Models & Management Methods
In the final session on business models, Dr. Yang Xu from Peking University presented his paper on the topic of “Data Supply Chain Management for Data Governance & Operation”. As the pace of digitalisation increases, so is the accumulation of data. Apart from the drastic increase in data scale, diversity has been increasing as well. All these will shrink the proportion of valuable data, making value discovery more and more difficult. Also, because of the vast accumulation of data, new challenges such as unclear data ownership, high data collection cost, difficult data sharing, and the lack of data openness due to privacy and property concerns emerge. In view of this, Dr. Xu proposed five key points for data supply chain management: clarification of data ownership, intelligent data collection, capitalisation of data resources, process-oriented data supply, and value-oriented data service. These five points should be capable of collecting and storing data in a more efficient and effective manner, and in turn, simplify data governance.
The final presenter of this session was Dr. Giorgio Caridi from E-Campus University with his paper on “New Management Methods & Business Models: Business Networks & Hybridized Cultural Resources”. As of late, a novel business model appears for small and medium enterprises (SMEs). This model creates a network consisting of businesses of similar or related nature. Businesses within the network commit to not compete with one another, and the competition will occur between systems of different value while shared business functions will be centralised. The model allows SMEs to reach the critical mass by aggregating them into a networked organisation while maintaining the advantage of flexibility by remaining an SME for each business. Also, this model increases the competitive advantage of each business and even the entire network. Thus, it may be a path for SMEs to enhance their competitiveness.
The UACES Best Paper Award sponsored by the EU*Asia Institute
Dr. Frauke Austermann and Dr. Shen Wei, the founders of the UACES Research Network on EU-China Relations, were delighted to award This year’s UACES Best Paper Award was awarded to Dr. Susan T. Jackson, from Stockholm University for her insightful paper on “Sustaining Risk: Managing Security & ESG” – Congratulations!