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In collaboration with Global:SF and the State of California Governor’s Office of Business and Economic Development, the China Program at Shorenstein APARC presented session five of the New Economy Conference, "Navigating Chinese Investment, Trade, and Technology," on May 19. The program featured distinguished speakers Ambassador Craig Allen, President of the US-China Business Council; David K. Cheng, Chair and Managing Partner of China & Asia Pacific Practice at Nixon Peabody LLPJames Green, Senior Research Fellow at the Initiative for U.S.-China Dialogue on Global Issues at Georgetown University; and Anja Manuel, Co-Founder and Principal of Rice, Hadley, Gates & Manuel LLC. The session was opened by Darlene Chiu Bryant, Executive Director of GlobalSF, and moderated by Professor Jean Oi, William Haas Professor of Chinese Politics and director of the APARC China Program.

U.S.-China economic relations have grown increasingly fraught and competitive. Even amidst intensifying tensions, however, our two major economies remain intertwined. While keeping alert to national security concerns, the economic strength of the United States will depend on brokering a productive competition with China, the world’s fastest growing economy. Precipitous decoupling of trade, investment, and human talent flows between the two nations will inflict unnecessary harm to U.S. economic interests--and those of California.  

Chinese trade and investments into California have grown exponentially over the last decade. But they have come under increasing pressure following geopolitical and economic tensions between the two nations, particularly in the science and technology sectors. Ambassador Craig Allen, David Cheng, James Green, and Anja Manuel explored the role of Chinese economic activity in California in the context of the greater US-Chinese relationship. Watch now: 

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U.S.-China Relations in the Biden Era

Dr. Thomas Wright examines the recent history of US-China relations and what that might mean for the new administration.
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Ambassador Craig Allen, David Cheng, James Green, and Anja Manuel explore the role of Chinese economic activity in California in the context of the greater US-Chinese relationship.

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An Indian Army soldier stands in front of a group of People’s Liberation Army troops during joint drills

In May 2020, China launched several near-simultaneous incursions across the Line of Actual Control (LAC) in Ladakh, into territory hitherto controlled by India. Both sides reinforced their positions with tens of thousands of troops, engaged in a deadly skirmish, and reportedly came close to war. An agreement to disengage troops was announced in February 2021, but implementation has been halting. Regardless of how disengagement progresses, the crisis poses significant challenges for India’s long-term strategic competition with China.

As a result of the Ladakh crisis, India faces a new strategic reality in which China is a clear and abiding adversary. For India, the political relationship is now defined by hostility and distrust, and the LAC will remain more heavily militarised and violence-prone. Given this new reality, India is likely to further defer military modernisation and maritime expansion into the Indian Ocean. In the face of unremitting Chinese naval expansion, India risks losing significant political and military leverage in the Indian Ocean. At the same time, China appears to have escaped significant harm. Its better-resourced military could better absorb the material costs of the mobilisation. It may have been more concerned by the prospect of an increasingly hostile India, but the disengagement agreement has limited even those modest political costs.

The central policy challenge for India is balancing the heightened Chinese military threat on the northern border with the rapidly growing Chinese military presence in the Indian Ocean. It can manage this challenge by focusing on military strategies of denial rather than punishment, focusing on imposing political rather than material costs on China, and accepting more risk at the LAC in exchange for long-term leverage in the Indian Ocean region. How India responds will shape not only its strategic competition with China, but also the interests of likeminded partners including Australia, which depend on an increasingly capable and active India.
 

Key Findings

  • The still-unresolved Ladakh crisis has created a new strategic reality for India, marked by renewed political hostility with China, and an increased militarisation of the Line of Actual Control.
  • This new strategic reality imposes unequal costs on India and China. India is likely to defer much-needed military modernisation and maritime expansion into the Indian Ocean — which would impair its ability to compete strategically with China.
  • In contrast, China incurred only marginal material costs; it was probably more concerned with the prospect of continued deterioration in its relationship with India. Even that cost was more threatened rather than realised, and largely reduced when the disengagement plan was agreed.

 

In the Media

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Arzan Tarapore
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What are China's intentions in the South China Sea? In The 2020-21 Wilson China Fellowship: Essays on the Rise of China and Its Implications, Oriana Skylar Mastro uses a two-part analytical framework to outline why she believes China is trying to establish de facto control over the South China Sea. This means sovereignty over the disputed islands and the ability to dictate the rules of behavior in the surrounding waters. These intentions are detrimental to U.S. and allied interests. Mastro goes on to provide a list of recommended measures the United States can take to prevent Beijing from incrementally advancing its control over the South China Sea including:

  • The United States should expand and increase the tempo of its military operations in the SCS to show that China has not dissuaded the United States by increasing the risk to U.S. forces.
     
  • In the military realm, the United States should prioritize coalition building to ensure a free and open South China Sea.
     
  • The United States should specify that its U.S. alliance commitments extend to protection of countries’ rights within their EEZs.
     
  • To further increase costs to China, the United States could warn Beijing that it may reconsider its neutral position on the sovereignty of the South China Sea disputed islands to support claimants with less expansive and restrictive EEZ claims unless China moderates its EEZ claims and agrees to international law positions on maritime rights.
     
  • The United States should respond immediately to each aggressive act China takes in these waters, regardless of its target. Moreover, the United States should be sure to respond even when a treaty ally is not involved—this would stress that the United States is serious about protecting international norms, regardless of who the transgressors are and what the violation is.
     
  • When China commits an act of aggression or coercion, the Chinese assets or organizations involved should not determine the U.S. response. Instead, the United States should feel free to respond to paramilitary actors as it would to military actors.
     
  • To reconstitute its deterrent, the United States should seek military access to new partner facilities in the SCS. The United States should also improve the quality of other claimants’ maritime reconnaissance and surveillance capabilities and build their defensive capabilities.
     
  • Lastly, the United States should spearhead and prioritize a diplomatic solution to the South China Sea disputes, with or without China. Countries in the region disagree with China’s interpretation of international law. If the rest of the claimants agree about the islands’ sovereignty and the rights granted by those islands and ask the international community to help enforce the agreement, China will have difficulty pushing its claims and pressuring states unilaterally to concede to its demands. If Beijing refuses to follow these rules, Washington should form a coalition to restrict China’s access to technology and related information. Washington should even threaten to expel Beijing from the relevant international regimes.
Read Oriana's essay, "Chinese Intentions on the South China Sea"
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Oriana Skylar Mastro

Oriana Skylar Mastro

Oriana Skylar Mastro is a Center Fellow at the Freeman Spogli Institute for International Studies where she works with APARC and the Center for International Security and Cooperation (CISAC) researching Chinese military and security policy.
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Can China’s aggression towards Taiwan be stopped? Oriana Skylar Mastro joins the Munk Debate podcast to argue affirmatively that Chinese military capability has advanced too far for the United States to credibly deter the PRC through military means alone. Michael Beckley, an associate professor of political science at Tufts University and visiting scholar at the American Enterprise Institute, offers the rebuttal. The full debate is available below.

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Many of China’s military development goals were set with a target date of 2020, which means the PRC is currently in a strong place with its offensive and defensive capabilities. By Mastro’s measure, China now has the most advanced ballistic missile program in the world, including the United States. For Taiwan, this means the reality of an aggressive neighbor who possesses offensive weapons that are very difficult to defend against.

China also has geographic benefits when it comes to offensive maneuvering. If a hot conflict began, neither Taiwan nor the United States has a comparable network of sole-sovereign military bases in the area such as China’s. Not only does this mean China can utilize its air defense capabilities — again, now one of the strongest in the world, by Mastro’s account — but it can also support a robust blockade against Taiwan across the strait and devastate the island both militarily and economically.

As Mastro points out, “Taiwan’s economy completely depends on China, so if China decided to use economic coercion, which is defined as a type of aggression, the United States has absolutely no way of protecting Taiwan from any economic harm coming from the PRC.”

Because of this potential for combined military and economic aggression, Mastro pushed for urgency on deterrence in Taiwan. “The United States and international community do not have forever. The Chinese are not happy with maintaining the status quo, and they will soon believe they have the military capability to [take Taiwan].”

Rather than continuing to act alone, Mastro hopes the United States will lead out in organizing an international coalition that includes other regional partners such as Australia, Japan, and India as actively contributing participants. With the United States no longer seen as a monolith in Beijing, only broad, coordinated cooperation will provide effective deterrence and security for Taiwan.

On another podcast, Conversation Six, Mastro joins Abraham Denmark to discuss China's Taiwan strategy and what the United States can do to deter China from invading Taiwan. The threat of non-military intervention by the United States and its allies is the way forward, she says. "The US needs to do more in non-military realms," she argues.

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Oriana Skylar Mastro testifies to the U.S.-China Economic and Security Review Commission on Taiwan deterrence.
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Oriana Skylar Mastro Testifies on Deterring PRC Aggression Toward Taiwan to Congressional Review Commission

China may now be able to prevail in cross-strait contingencies even if the United States intervenes in Taiwan’s defense, Chinese security expert Oriana Skylar Mastro tells the U.S.-China Economic and Security Review Commission. Changes must be made to U.S. military capabilities, not U.S. policy, she argues.
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Military Competition with China: Harder to Win Than During the Cold War?

On February 10th, the APARC China Program hosted Professor Oriana Mastro to discuss military relations between the US and China, and why deterrence might be even more difficult than during the Cold War.
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The United States can no longer rely solely on its own military capability or influence to deter Chinese aggression against Taiwan, argues Oriana Skylar Mastro on a new episode of the Munk Debates podcast. Credible pushback can now only be achieved through international coalitions.

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The China Program at Shorenstein APARC had the privilege of hosting Jude Blanchette, the Freeman Chair in China Studies at the Center for Strategic and International Studies (CSIS). The program, entitled "What’s ‘Communist’ about the Communist Party of China?," explored the goals and ideology of the Chinese Communist Party (CCP), as well as what they might mean for the future of China in the global community. Professor Jean Oi, William Haas Professor of Chinese Politics and director of the APARC China Program, moderated the event.

After the death of Mao Zedong in 1976, the goals of the CCP became less clear. As the country began to adopt market reforms in the 1980s and 1990s, CCP theorists were forced into contortions providing ideological justifications for policies that appeared overtly capitalist. Deng Xiaoping’s concept of “Socialism with Chinese characteristics” came to be seen as a theoretical fig leaf rather than a description of an egalitarian economic system, and by the 2000s, a consensus emerged that the CCP had completely abandoned any pretense of pursuing the Marxist vision it purported to hold. With the rise of Xi Jinping, however, the Party talks with renewed vigor about Marxism-Leninism and the goal of achieving actual, existing socialism. Has the CCP re-discovered communism?  In his talk, Blanchette discussed the abandoned and existing legacies of Mao Zedong, Marxism-Leninism, and the CCP’s vision of socialism. Watch now: 

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Domestic or International? The Belt and Road Initiative Is More Internally Focused Than We Think, Says Expert Min Ye

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The Pandemic, U.S.-China Tensions and Redesigning the Global Supply Chain

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U.S.-China Relations in the Biden Era

Dr. Thomas Wright examines the recent history of US-China relations and what that might mean for the new administration.
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Is the Chinese Communist Party really communist at all? Expert Jude Blanchette, Freeman Chair in China Studies at the Center for Strategic and International Studies, weighs in.

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This article by Oriana Skylar Mastro was originally published in The Interpreter, a publication by the Lowy Institute.

When China began three days of military exercises in the South China Sea’s Gulf of Tonkin back in January, some observers speculated that Beijing was testing the new Biden administration. Harsh words from Beijing accompanied the exercises, with China’s foreign ministry spokesperson Wang Wenbin declaring the drills were “necessary measures to resolutely safeguard national sovereignty and security”.

Even against this backdrop, China’s official position is that it remains committed to a peaceful resolution of the South China Sea issue. And the rhetoric China employs at different times does make for a fascinating contrast. For example, China’s Foreign Ministry asserted in July 2020 that “China is not seeking to become a maritime empire” and that it “treats its neighboring nations on an equal basis and exercises the greatest restraint.”

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How then should we make sense of the mixed messages coming from Beijing? Most China experts find discourse to be informative – if not about China’s intentions, then at least about its aspirations. But which statements are indicative of China’s true position?

I argued recently in research for the Wilson Center that scholars need to evaluate the content and specificity of Chinese national discourse in addition to the position of the author or speaker involved. To that end, I analyzed all public speeches made by members of the Politburo of the Chinese Communist Party from 2013 to 2018. Xi Jinping led both of the Politburos I studied, and each had 25 members. Since some members served in both, this yields speeches by 39 unique individuals.

The speeches related to the South China Sea could be separated into those that mentioned cooperative themes and those with competitive themes. Cooperative themes have two subcategories, cooperation, and political solutions. Competitive themes have five subcategories: sovereignty, military, freedom, tension, and non-regional countries/the United States.

In what might appear good news for regional stability, China’s leaders used more cooperative discourse in public statements about the South China Sea than competitive themes. This might be taken to indicate a willingness to compromise with other claimants – a feature that is especially evident during the first year of each new Party Congress, namely 2013 and 2018.

However, one of the tenets of deriving intentions from discourse is that not all leadership statements are created equal. We need to consider personal power, accountability, and reputation for honesty. This means that statements by Xi, who is described as having “more power and more personal authority than any post-Mao leader”, take precedent.

Ambiguity suggests the leadership wants to have maximum flexibility and avoid being boxed in by its aggressive rhetoric.
Oriana Skylar Mastro
FSI Center Fellow

So here is the bad news. My analysis showed that Xi’s statements accounted for 42.7% of the competitive themes mentioned, even though he is only one of 39 leaders during this period.

There are additional reasons to discount Xi’s cooperative statements: his reputation for dishonesty.

In September 2015, Xi made a public statement at the White House promising not to “militarise” the artificial islands China had been building in the South China Sea. Xi stated that “relevant construction activities that China is undertaking … do not target or impact any country, and China does not intend to pursue militarisation”. While the language at the time was deemed “new”, the pledge remained unclear. Then and subsequently, Xi did not promise to freeze dredging, island-building or activities in the region, nor did he offer any clarity about what “militarisation” meant. In May 2019, then–Chairman of the Joint Chiefs of Staff General Joseph Dunford said that China had “clearly … walked away from that commitment” given the “10,000-foot runways, ammunition storage facilities, routine deployment of missile defence capabilities, aviation capabilities and so forth” on the islands. My analysis in a previous Interpreter article shows that China has indeed militarised these islands to establish control over the islands and the surrounding waters.

Interestingly, China’s foreign ministry also makes more competitive statements than cooperative statements, contrary to what might be the expectation that professional diplomats would lean towards negotiations and reassurance. If soothing language was supposed to mask China’s intentions, ministry statements would be the most likely source. But instead, China seems to prioritise articulating its position on sovereignty and issuing threats to those who violate it over reassurance.

None of this means China will use force in the South China Sea. Xi’s statements calling for a tough stance to protect China’s perceived sovereignty in the South China sea lack specificity – there are no allusions to a timeline or preferred methods. Such ambiguity suggests the leadership wants to have maximum flexibility and avoid being boxed in by its aggressive rhetoric, even if it is popular with the Chinese public. And the Chinese leadership undoubtedly prefers to use diplomatic, legal and economic tools to establish sovereignty over these waters.

But my analysis suggests that China will be unlikely to make the compromises necessary on its expansive territorial claims in these waters to facilitate a viable diplomatic resolution. Instead, China’s leaders hope that political, economic and military power will convince other countries to accommodate China’s position without a fight. And if the other claimants concede to Beijing, it will be harder for the United States or Australia to push back on China’s position.

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Oriana Skylar Mastro testifies to the U.S.-China Economic and Security Review Commission on Taiwan deterrence.
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Oriana Skylar Mastro Testifies on Deterring PRC Aggression Toward Taiwan to Congressional Review Commission

China may now be able to prevail in cross-strait contingencies even if the United States intervenes in Taiwan’s defense, Chinese security expert Oriana Skylar Mastro tells the U.S.-China Economic and Security Review Commission. Changes must be made to U.S. military capabilities, not U.S. policy, she argues.
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How China is Bending the Rules in the South China Sea

Beijing’s misapplication of international law in the disputed waters is more complex than it seems on the surface.
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Military Competition with China: Harder to Win Than During the Cold War?

On February 10th, the APARC China Program hosted Professor Oriana Mastro to discuss military relations between the US and China, and why deterrence might be even more difficult than during the Cold War.
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The rhetoric weaves between cooperative and competitive, leaving the question of what – and who – to believe.

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On February 10, 2021, the China Program at Shorenstein APARC hosted Professor Oriana Skylar Mastro, Center Fellow at the Freeman Spogli Institute for International Studies​ for the virtual program "Military Competition with China: Harder to Win Than During the Cold War?" Professor Jean Oi, William Haas Professor of Chinese Politics and director of the APARC China Program, moderated the event.

As US-China competition intensifies, experts debate the degree to which the current strategic environment resembles that of the Cold War. Those that argue against the analogy often highlight how China is deeply integrated into the US-led world order. They also point out that, while tense, US-China relations have not turned overtly adversarial. But there is another, less optimistic reason the comparison is unhelpful: deterring and defeating Chinese aggression is harder now than it was against the Soviet Union. In her talk, Dr. Mastro analyzed how technology, geography, relative resources and the alliance system complicate U.S. efforts to enhance the credibility of its deterrence posture and, in a crisis, form any sort of coalition. Mastro and Oi's thought-provoking discussion ranged from the topic of why even US allies are hesitant to take a strong stance against China to whether or not Taiwan could be a catalyst for military conflict. Watch now: 

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Caught in the Crossfire: The Future Of U.S.-China Science Collaboration and Its Impact on University Education

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The Pandemic, U.S.-China Tensions and Redesigning the Global Supply Chain

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On February 10th, the APARC China Program hosted Professor Oriana Mastro to discuss military relations between the US and China, and why deterrence might be even more difficult than during the Cold War.

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As US-China competition intensifies, experts debate the degree to which the current strategic environment resembles that of the Cold War. Those that argue against the analogy often highlight how China is deeply integrated into the US-led world order. They also point out that, while tense, US-China relations have not turned overtly adversarial. But there is another, less optimistic reason the comparison is unhelpful: deterring and defeating Chinese aggression is harder now than it was against the Soviet Union. In this talk, Dr. Mastro analyzes how technology, geography, relative resources and the alliance system complicate U.S. efforts to enhance the credibility of its deterrence posture and, in a crisis, form any sort of coalition.


Photo of Oriana MastroOriana Skylar Mastro is a Center Fellow at Stanford University’s Freeman Spogli Institute for International Studies (FSI). Within FSI, she works primarily in the Shorenstein Asia-Pacific Research Center (APARC) and the Center for International Security and Cooperation (CISAC) as well. She is also a fellow in Foreign and Defense Policy Studies at the American Enterprise Institute and an inaugural Wilson Center China Fellow.

Mastro is an international security expert with a focus on Chinese military and security policy issues, Asia-Pacific security issues, war termination, and coercive diplomacy. Her research addresses critical questions at the intersection of interstate conflict, great power relations, and the challenge of rising powers. She has published widely, including in Foreign Affairs, International Security, International Studies Review, Journal of Strategic Studies, The Washington Quarterly, The National Interest, Survival, and Asian Security, and is the author of The Costs of Conversation: Obstacles to Peace Talks in Wartime (Cornell University Press, 2019).

She also continues to serve in the United States Air Force Reserve, for which she works as a Strategic Planner at INDOPACOM. Prior to her appointment at Stanford in August 2020, Mastro was an assistant professor of security studies at the Edmund A. Walsh School of Foreign Service at Georgetown University. She holds a B.A. in East Asian Studies from Stanford University and an M.A. and Ph.D. in Politics from Princeton University.

 


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This event is part of the 2021 Winter/Spring Colloquia series, Biden’s America, Xi’s China: What’s Now & What’s Next?, sponsored by APARC's China Program.

 

Via Zoom Webinar. Register at: bit.ly/2MYJAdw

Oriana Skylar Mastro Center Fellow at the Freeman Spogli Institute for International Studies
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The disruption of the 2020 pandemic, coupled with significant economic tensions between China and the US, have resulted in global companies rethinking their supply chains.  Many have called for drastic changes - reshoring, near-shoring, regionalization of vertical supply chains, increasing redundancies, or diversification of Chinese manufacturing to Southeast Asia, South Asia, Africa or Latin America, etc.  Empirical data, however, reveal that many are taking a more cautious approach.  Leading companies are continuing to develop innovative ways to redesign their supply chains that still preserve China as their key supply source.  This talk will share some of these innovative ways that, in the end, may provide better long term values.


Portrait of Hau L. LeeHau L. Lee is the Thoma Professor of Operations, Information and Technology at the Graduate School of Business at Stanford University.  He was the founding faculty director of the Stanford Institute for Innovation in Developing Economies (SEED), and is the current Co-Director of the Stanford Value Chain Innovations Initiative.  Professor Lee’s expertise is on global supply chain management and value chain innovations.  He has published widely in top journals on supply chain management.  He was inducted to the US National Academy of Engineering, and elected a Fellow of MSOM, POMS; and INFORMS.   He was the previous Editor-in-Chief of Management Science.  In 2006-7, he was the President of the Production and Operations Management Society.  His article, “The Triple-A Supply Chain,” was the Second Place Winner of the McKinsey Award for the Best Paper in 2004 in the Harvard Business Review.  In 2004, his co-authored paper in 1997, “Information Distortion in a Supply Chain: The Bullwhip Effect,” was voted as one of the ten most influential papers in the history of Management Science.  His co-authored paper, “The Impact of Logistics Performance on Trade,” won the Wickham Skinner Best Paper Award by the Production and Operations Management Society in 2014. In 2003, he received the Harold Lardner Prize for International Distinction in Operations Research, Canadian Operations Research Society.  Professor Lee obtained his B.Soc.Sc. degree in Economics and Statistics from the University of Hong Kong, his M.Sc. degree in Operational Research from the London School of Economics, and his M.S. and Ph.D. degrees in Operations Research from the Wharton School of the University of Pennsylvania.  He was awarded an Honorary Doctor of Engineering degree by the Hong Kong University of Science and Technology, and an Honorary Doctorate from the Erasmus University of Rotterdam.

 


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This event is part of the 2021 Winter/Spring Colloquia series, Biden’s America, Xi’s China: What’s Now & What’s Next?, sponsored by APARC's China Program.

 

Via Zoom Webinar. Register at: https://bit.ly/35bMWQx

Hau L. Lee Thoma Professor of Operations, Information and Technology, Stanford Graduate School of Business
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