David M. Lampton gave a talk titled “Chinese Power and Rail Connectivity in Southeast Asia” before the Stanford China Program audience on February 6^th. He addressed three issues in particular: the scope of his research project, conducted in partnership with two co-authors based in Singapore and Malaysia; the long genesis of this railroad construction idea from Southeast Asia to China; and, third, the overarching question of whether China can effectively implement the gargantuan feat – technologically, financially, and politically. The high-and conventional-speed rail project will span seven Southeast Asian countries, plus China, Lampton highlighted.  This project is not only geographically forbidding, but the political terrain, and its socio-economic variety, is an even greater challenge.  Lampton’s talk comprised part of Stanford China Program’s 2019 Colloquia Series, “A New Cold War?: Sharp Power, Strategic Competition, and the Future of U.S.-China Relations.”

Lampton began by clarifying that the vision of rail connectivity through Southeast Asia into China is not the brainchild of either China’s leadership or Xi Jinping. This idea has a long history, he stated, beginning with the British and the French in the 19^th century when they were occupying Burma and Indochina, respectively; and even during World War II when Japan further entertained building railroads from the Korean Peninsula to Singapore to advance their military ambitions. In contemporary times, ASEAN had articulated a plan in 1995 to develop a rail line from Singapore to Kunming city, P.R.C. In 2010, ASEAN again put forth a master connectivity plan for 2025 where railroad development comprised a prominent part. Only in the aftermath of these many plans and proposals did Xi Jinping, in 2013, officially announce China’s Belt and Road Initiative (BRI), an infrastructure initiative with a scope far greater than simply Southeast Asia. The idea of infrastructural connectivity in the region, in other words, has a long history that predates China entering the picture as a major actor. Only recently has China amassed the technological capacity and financial wherewithal to realize this enormous project, with economic, diplomatic, and strategic military implications.

Next he described the key role that Beijing’s industrial policy has played in the rapid development of China’s high-speed rail. From a nonexistent industry in 2001, China has built a sector that is now an international powerhouse in high-speed rail technology. As of 2014, China boasted four trunk lines, North and South; and four trunk lines, East and West, crisscrossing the P.R.C. China’s industrial policy has clearly delivered striking results (as well as some setbacks) not only with respect to high-speed rail but also in other industries.  In light of this, Lampton opined that China is not likely to yield to U.S. demands for major structural reforms in onoing trade talks with China. 

Lampton described the progress in high-speed and conventional-speed rail construction with partners in Southeast Asia (ASEAN) that the Chinese have made, with Laos and Thailand furthest along in implementation. Nonetheless, Beijing also has met with significant resistance due to the complicated political situation in various regions. Lampton described, for example, the drawn-out financial negotiations between Singapore and Malaysia with respect to the rail line connecting Singapore to Kuala Lumpur; and the jockeying among various heads of Malaysia’s federation of local states. The election of Mr. Mahathir in 2018 also put an at least temporary halt to the construction and planning of two rail projects for many reasons, including the corruption of the preceding regime of Najib in Kuala Lumpur. Although Lampton expressed overall confidence that the rail lines will get built to Kuala Lumpur and Bangkok, for example, in the not-too-distant future, the political complexities of the region and China’s ability to successfully navigate them are still open questions.

He also described the competing world views regarding infrastructure construction and economic development. There are powerful constituents in China – now backed by Xi Jinping himself – who believe that infrastructure development drives growth: i.e., “if you want to get rich, build a road.” By contrast, the U.S. and entities such as the World Bank are more cautious, seeing all the negative social and environment extenalities such massive projects create. They also want to see greater assurances of projected returns from these infrastructure projects before devoting resources. Having said this, both multilateral financial and development institutions, and the United States Government, are gradually adopting a more supportive posture on large infrastructure projects, in part not wishing to abandon the commercial and strategic battlegrounds of the future to the PRC.

Lastly, Lampton debunked the notion that the BRI is a unified, top-down “plan.” Rather, he described it as Beijing’s “umbrella policy” that “creates a predisposition [among Chinese entities] to build infrastructure.” It incentivizes “entrepreneurial SOEs, provinces, localities, overseas Chinese . . . to push their pet projects . . . onto . . . the national largesse.” This being the case, Lampton described the BRI as a dynamic, chaotic and, sometimes, even a rapacious process for the transit countries. Yunnan Province, for example, started a rail line even before the central government had approved it; and Guangdong Province began developing its own special economic zone and port construction in Malacca all without central approval. As Lampton stated, the “BRI isn’t just about Xi Jinping and Beijing . . . . [I]t’s about local initative, and how Beijing can or cannot control or . . . under what circumstances, it chooses to control [its local actors].”

The recording and transcript are available below.  

“Win support from the people,” Yuhua Wang, Assistant Professor of Government at Harvard University, repeated the words from one of Xi Jinping’s speeches that was given to justify China’s massive anti-corruption campaign. The exact scope and motivations for President Xi Jinping’s anti-corruption campaign is, as yet, unknowable, Wang stated; but clearly, a major public aim of CCP Chairman Xi Jinping was to build regime support by cracking down on bad actors in the government.

Prof. Yuhua Wang gave a talk titled “Why Xi Jinping’s Anti-Corruption Campaign has Undermined Chinese Citizens’ Regime Support?” at the Stanford China Program on November 12^th, 2018, based on a national-level survey analysis that he had conducted with his co-author, Prof. Bruce Dickson at George Washington University. Rather than focusing on Xi’s motivations for undertaking his crackdown, however, Wang and Dickson tried to measure the impact of Xi’s anti-corruption campaign on public perception of the central government and the Chinese Communist Party (CCP). Did the campaign, in other words, shore up public support for China’s central government and Party, as Xi hoped it would – or did it, in fact, undermine regime support?

Professor Wang first offered some background on how this anti-corruption campaign got started around 2012-2013, shortly after Xi Jinping became Chairman of the CCP. A staggering 261 vice-ministerial officials and 350,000 officials had been investigated to date; and, even those at the highest levels of China’s leadership – former Politburo and Politburo Standing Committee members, for instance –were not immune from scrutiny. And, equally unprecedented, media coverage of these corruption cases – from Bo Xilai to Zhou Yongkang and Xu Caihou – were extensive, exposing their lavish lifestyles and illicit dalliances on social and traditional media. Wang speculated that such lurid publicity most likely shocked the public, potentially turning citizens against even the central government, which consistently enjoys significantly higher levels of public trust than local governments in China. He decided, therefore, to explore with his co-author what the effects of such exposés might be on public perception of the central regime.

Replicating the same questionnaire and sampling design, Wang and his co-author took a national random sample in two waves – one before the anti-corruption campaign in 2010 and a second one during the campaign in 2014. They interviewed approximately 4,000 people across 25 provinces in China in order to measure potential shifts in people’s attitudes towards the regime over those four years. The findings were, indeed, illuminating:

First, Wang stated, increasing frequency of corruption investigations in a locality was correlated with a greater drop in popular regime support (defined as trust in central government or support for the CCP) in that locality. Higher volume of corruption investigations in a locality was also negatively correlated with people’s perception that government officials were generally honest and clean. The corrosive effects of the campaign, furthermore, proved strongest on those who had initially believed in the integrity of government officials; but for those who were already cynical about official corruption, the campaign had a smaller effect. Lastly, higher the survey respondent’s use of social media like WeChat, stronger the negative effects on his/her support for the regime. The authors also took into account how the chilling effects of the campaign may be negatively impacting local economies and how that slowing economy may actually be the primary cause behind decreasing public regime support. To account for this potentially confounding effect, Wang looked for evidence as to whether the campaign had contributed to a slowdown in China’s economy by 2014. Perhaps because 2014 was still early on in the campaign, he stated that they found no evidence of slower GDP growth rate, growth rate per capita GDP, etc., in the regions where they had undertaken their surveys.

Overall, Wang’s research calls into question whether Xi Jinping’s anti-corruption campaign is, in fact, advancing one of his main goals– i.e., to increase people’s faith in the central regime – or whether it is actually proving counterproductive to his aim. In fact, Wang’s research seems to indicate that the more Chinese citizens are exposed to evidence of government corruption, the more the central regime appears to suffer a loss in credibility. Wang was careful to point out, however, that they were barred, due to political sensitivity, from asking any questions regarding respondents’ attitudes towards Xi Jinping himself. Thus, it is still an open question whether popular support for Xi Jinping himself is increasing even though public trust in the regime might be decreasing.

The recording and transcript are available below.  

Following a sustained period of program growth, an expanded leadership team and remodeled facility will greet new and returning students in the fall.

When current and incoming students in Stanford University’s Ford Dorsey Master’s in International Policy (MIP) program arrive to campus this fall, they will be the first to experience the new face of the program. 

Renovations on a modern new academic space, outdoor courtyard and gardens will be complete, and Professor Francis Fukuyama, one of the most well-known and respected social scientists in the world, will be the program’s new director.  

“I am grateful for this opportunity to lead the Ford Dorsey MIP program,” said Fukuyama, who is the Mosbacher Director at the Center for Democracy, Development and the Rule of Law and Olivier Nomellini Senior Fellow at the Freeman Spogli Institute for International Studies (FSI). He noted that, “This is a critical time to prepare our students to be policy leaders in government, civic society, and the private sector. Our curriculum aims to be among the best in international policy education, and continues to get stronger with new faculty, courses, and terrific students.”

The Ford Dorsey Master's in International Policy is a two year, full-time, professional graduate degree program administered jointly by the Freeman Spogli Institute for International Studies and the School of Humanities and Sciences. The just graduated Class of 2019 included nineteen students, 15 women and four men, from 10 different countries.

Under the leadership of Michael McFaul as director and Kathryn Stoner as deputy director over the last two years, the MIP program has changed and grown significantly. The core curriculum was completely revamped, a new, very popular specialization track on cyber policy was added, and a greater number of FSI faculty have begun to teach in the program. The number of applications has risen 67% over the past 2 years.  Both McFaul and Stoner will continue to teach in the MIP program.

“Since redesigning MIP two years ago, we have committed to optimizing and improving this unique, innovative program at FSI,” said Professor McFaul.  “Convincing Francis Fukuyama to assume leadership of MIP is the natural next phase in the program’s growth and development.”

Stoner served as Director of the program for 8 years before becoming Deputy Director of the Freeman Spogli Institute for International Studies. Under her leadership, the program increased faculty involvement from FSI in teaching in the program, developed a new curriculum in conjunction with FSI faculty, added an exchange program between the program and the Diplomatic Academy of Vienna, increased student funding opportunities through research with FSI faculty, and grew the program staff to better support student career services, alumni outreach, program recruiting, student academic advising, and admissions. 

“Our students are well positioned to assume leadership roles over the course of their careers,” said Professor Stoner. “We are meeting the demands of the shifting policy landscape with innovative new courses and graduates who dare to think differently. In this sense the program is quintessentially Stanford.” 

Alongside Professor Fukuyama, Dr. Chonira Aturupane, a senior research scholar at the Center on Democracy, Development and the Rule of Law at FSI, and long-time lecturer in international economics in the MIP program, has agreed to serve as the Associate Director for Academic and Student Affairs in the MIP Program.

“Mike McFaul and I leave the leadership and administrative team of this program in good hands. Francis Fukuyama is a dedicated policy scholar, and teacher and I am thrilled that he is taking the helm,” said Stoner. “We know Chonira Aturupane will be as outstanding a contributor in this new administrative role as she has been as an instructor,” she added.

Professor Fukuyama has long been passionate about the teaching of public and international policy at the graduate level. He came to Stanford in 2010 from the Johns Hopkins School of Advanced International Studies (SAIS), where he led, expanded, and redesigned the International Development coursework for the SAIS master’s program. 

Fukuyama has also been deeply involved in the redesign of the MIP curriculum at Stanford, and has spearheaded a national effort for innovation in public policy teaching.  He will continue to teach in the program, including the new practicum experience with Professor Jeremy Weinstein of Stanford’s Department of Political Science, and Senior Fellow at the Center for International Security and Cooperation (CISAC) at FSI next year. 

“To prosper in today’s global society, institutions must continually adapt at both the leadership and policy level,” said Fukuyama. “It’s something I’ve spoken about for years and now here I am living this change together with our students. I can’t wait for us to get started.”

Media Contact: Ari Chasnoff, Assistant Director for Communications, chasnoff@stanford.edu, 650-725-2371

The world is “graying” at an unprecedented rate. According to the UN’s World Population Prospects 2019, the number of persons over the age of 65 is growing the fastest and expected to more than double by 2050, then triple in another 50 years’ time.

Some Asian countries in particular, plagued by population aging, declining fertility, and gender imbalance, are facing a grim outlook for a demographic crisis. In Japan, one in five people is now 70 or older, birthrate has dropped to a historic level, and the population declined by more than a quarter of a million last year. Meanwhile, South Korea is aging more quickly than any other developed country: with seniors on the verge of making up 14% of the population, the country is on the cusp of becoming an “aged society.” The potential impact of population aging on the labor market and the fiscal pressures on the public systems of healthcare, pensions, and social protection schemes for older adults are some of the many problems that these and other countries must tackle.

Against this background, Shorenstein APARC recently held the third annual gathering of the Stanford Asia-Pacific Innovation project, a Center-led initiative that produces academic and policy-relevant research to promote innovation and entrepreneurship in East Asia. Held in Chuncheon, South Korea and organized jointly with Hallym University’s Institute for Communication Arts and Technology, this year’s conference focused on the intersection of aging, technological development, and innovation in the region.

(Gi-Wook Shin)

APARC Director Gi-Wook Shin opened the two-day session, introducing the conference’s themes. “What policies can promote innovation and entrepreneurship in aging populations?” Shin asked. “What opportunities do new technologies offer for addressing challenges posed by East Asia’s demographic shifts, and what are the threats involved in the adoption of these new technologies?”

Joon-Shik Park, vice president of the Office of Vision and Cooperation at Hallym University,  the conference host, noted that “East Asian countries are the most important testbeds on issues related to aging and innovation,” and that sharing meaningful research and implications from the region “will provide invaluable insights for all the societies around us.”

(From left to right, Yong Suk Lee , Junichi Yamanoi , Young-Bum Kim, and Jiyoung Liu)

Family Business Succession

Demographic forces and population aging at the macro level are altering family structures and assumptions at the micro level. For example, Junichi Yamanoi of Waseda University presented a study that examined how expectations around managerial succession at family firms had a significant impact on a firm’s long-term investments.

The study surveyed over 15,000 small and medium enterprises (SMEs) in the Tokyo metropolitan area. The participants were initially asked about their firm’s attributes, CEO demographics, and succession expectations. More than a year later (a time lag that eliminated reverse causality), a sampling of respondents was then asked about their current long-term investments (e.g., R&D, new product development, and internationalization activities).

Yamanoi and his coauthors found that, when a family business’ CEO was confident that a successor would follow, their firm was more likely to engage in long-term investment. Additionally, a CEO’s expectations that the successor would be someone other than their child resulted in an even greater likelihood of long-term investment.

As part of its policy propositions, the study recommends that government agencies and SME officers eager to increase investments by SMEs introduce external candidates to such firms. Moreover, family CEOs should be cautioned against investment decisions that are too short-term in orientation, as, due to inherent aversion to losses of socioemotional wealth for the family, they may unconsciously avoid long-term investments.

(Javier Miranda)

Rethinking Age and Entrepreneurship

At a luncheon keynote address, Javier Miranda, principal economist at the U.S. Census Bureau,  shared insights into the correlations between age and high-growth entrepreneurship, considering when in life people start firms and when they start the most successful firms.

Miranda acknowledged that youth is often perceived as being crucial to entrepreneurial success, referring to Mark Zuckerberg’s dictum, “Young people are just smarter.” Venture capitalist (VC) activity seems to support this notion, said Miranda, citing a sample of 35 VC-backed “unicorns” that resulted in a mean founder age of 31. He explained that VCs' high regard of young entrepreneurs may be attributed to a belief in young people's greater deductive reasoning, transformative thinking, and higher energy, optimism, and confidence.

But does the statistical evidence support such a view? It would seem not. Miranda’s data showed that the mean age for founders of any type of firm is 41.9. Furthermore, the mean age for founders of the most successful firms (those ready for Initial Public Offering market) was 45, and a founder at age 50 was approximately twice as likely to experience successful exit or high growth compared to a founder 20 years their junior.

In fact, dependent on the starting of a firm, the probability of a founder’s success peaked in the age range of 45-59. Pointing directly to entrepreneurs like Jobs and Bezos, Miranda conceded that even extremely talented people, who may be talented enough to succeed when young, peaked in middle age.

The results of Miranda’s study seem at odds with VC attraction to younger entrepreneurs. Experience, Miranda concluded, appeared to overwhelm any potential age advantage, but more research was needed to unpack the underlying predictors of entrepreneurial success over one’s life cycle.

Role of Technology in an Aging Populace

Day two of the conference focused on the promising role technology may play as populations age. APARC Research Scholar Kenji Kushida detailed both the current and impending problems Japan faces as its population both ages and shrinks in size, and the solutions possible through technological advancement like robotics, AI, and wearable devices.

For example, Japan’s demographic shift has had a double knock-on effect on agriculture, with the percentage of farm workers age 65 or older steadily rising over the last five years and the total cultivated agricultural land decreasing each passing year. Kushida described how ICT-enabled bulldozers allow farm owners to more precisely flatten the ground in rice paddies, resulting in both greater yields and cost savings as much as 40%.

Healthcare is another significant area of concern in Japan, as healthcare costs for people over 65 are four times that of younger people and medical costs as a proportion of GDP have been increasing sharply, especially in rural areas. Shortage of physicians and diagnostic technicians is another challenge. Kushida gave an example of a technology healthcare resource that enables clinics and hospitals to upload patient medical images which are then diagnosed by medical doctors affiliated with the tool's startup developer. This low-cost solution allows smaller, rural hospitals to tap into a larger network of physicians and specialists online.

While Japan’s technological trajectory has been driven primarily by the private sector, Kushida pointed out the important role played by government actors. Specifically, within the “Abenomics” reforms of Prime Minister Shinzo Abe, several key performance indicators include support for digitizing medical records, adoption of robotics in nursing care, and extending “healthy” life expectancy.

Edited volumes collecting the papers from the annual Stanford Asia-Pacific Innovation conferences are forthcoming. These will serve as valuable references for scholars and policymakers. The first conference was held at Stanford in 2017, and examined the industrial organization of businesses and innovation clusters and how such environments affect entrepreneurship. The second conference, held in September of 2018 in Beijing, analyzed the impact of public education and financial policies pursued by East Asian countries to promote entrepreneurship.