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Expanding access through insurance expansion can increase health‐care utilization through moral hazard. Reforming provider incentives to introduce more supply‐side cost sharing is increasingly viewed as crucial for affordable, sustainable access. Using both difference‐in‐differences and segmented regression analyses on a panel of 1,466 hypertensive and diabetic patients, we empirically examine Shandong province's initial implementation of China's 2009 Essential Medications List policy. The policy reduced drug sale markups to providers but also increased drug coverage benefits for patients. We find that providers appeared to compensate for lost drug revenues by increasing office visits, for which no fee reduction occurred. At the same time, physician agency (yielding to patient demand for pharmaceuticals) may have tempered provider incentives to reduce drug expenditures at the visit level. Taken together, the policy may have increased total spending or total out‐of‐pocket expenditures. Mandating payment reductions in a service that comprises a large portion of provider income may have unintended consequences.

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World Medical & Health Policy
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Karen Eggleston
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Noa Ronkin
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Forty years after the establishment of diplomatic relations between the United States and China, the two superpowers are competing and contesting every arena, from trade to AI research and from space exploration to maritime rights. Instead of what Americans referred to as engagement and Chinese called reform and opening, many experts and analysts now characterize the relations between the two countries as dangerously brittle. Some see a new kind of Cold War in the making. Such assertions, however, argues Shorenstein APARC Fellow Thomas Fingar, “both ignore history and impute a level of fragility that has not existed for many years.”

Fingar reflects on the U.S.-China bilateral relationship in a new article, “Forty years of formal—but not yet normal—relations,” published in the China International Strategy Review. He claims that the relationship is resilient and not destined for conflict, albeit it is beset by a host of aspirational, perceptual, and structural differences.

A political scientist and China specialist who served over two decades in senior government positions, Fingar urges readers to remember that assertions of fragility of the U.S.-China relationship undervalue the strength, scope, and significance of interdependence, shared interests, and constituencies in both countries. These, he says, have a substantial stake in the maintenance of at least minimally cooperative relations.

U.S.-China relations are indeed highly asymmetrical: Chinese citizens and organizations have far greater access to the United States than Americans do to China, notes Fingar. He also recognizes that the troubles that have soured the relationship are more intricate and often more sensitive than those of the past. Decades ago, most of the issues that arose were handled at the governmental level. But now “the number and variety of players with stakes in the relationship and disputes with counterpart actors are much greater.” Furthermore, explains Fingar, the U.S. business community is expressing a stronger voice for government action to change Chinese behavior and is not as consistent an advocate of stability in U.S. policy toward China as it used to be. “This is an extremely important development,” he says, “because it reverses a key dynamic in the U.S.-China relationship.”

Ultimately, however, the two countries and our institutions and people are linked by myriad ties that bring mutual benefits as well as the constraints of interdependence. “I remain confident that we will continue to be able to manage the relationship,” concludes Fingar. He expresses disappointment, though, that normalization of U.S.-China relations remains a work in progress and cautions that merely managing the relationship to prevent it from deteriorating is an unsatisfactory goal that should be unacceptable to both sides. Not only does such a low bar limit what each counterpart can achieve, but it also inhibits the kind of cooperation required to address transnational challenges like climate change, infectious disease, and proliferation of dangerous technologies.

 

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A display for facial recognition and artificial intelligence is seen on monitors at Huawei's Bantian campus on April 26, 2019 in Shenzhen, China.
A display for facial recognition and artificial intelligence is seen on monitors at Huawei's Bantian campus in Shenzhen, China. The U.S. government battle with the Chinese telecom giant represents multiple concerns about China's technological prowess.
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Amy Zegart
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Thirty years ago this week, I watched the news from Beijing and started shredding my bedding. It was the night before my college graduation, I had been studying Chinese politics, and news had broken that college students just like us had been gunned down in Tiananmen Square after weeks of peaceful and exhilarating democracy protests—carried on international TV. In the iconic square where Mao Zedong had proclaimed the People’s Republic decades before, bespectacled students from China’s best universities had camped out, putting up posters with slogans of freedom in Chinese and English. A “goddess of democracy” figure modeled after the Statue of Liberty embodied their hopes—and ours—for political liberation in China.

On my campus back then were just a handful of students majoring in East Asian studies. Learning of the brutal crackdown in Beijing, we somehow found one another, gathered our friends, and stayed up making hundreds of white armbands for classmates to wear at commencement the next day. Grappling with the cold realities of the “real world” we were about to enter, we didn’t know what else to do. So we tore sheets and cried for what might have been.

The June 4, 1989, massacre was a horrifying spectacle that the Chinese government has sought to erase from national memory ever since. But, 30 years later, contemplating what might have been is more important than ever. In hindsight, Tiananmen Square serves as a continuing reminder about just how much China has defied, and continues to defy, the odds and predictions of experts. The fact is that generations of American policy makers, political scientists, and economists have gotten China wrong more often than they’ve gotten China right. In domestic politics, economic development, and foreign policy, China has charted a surprising path that flies in the face of professional prognostications, general theories about anything, and the experience of other nations.

Read the rest at The Atlantic

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Karl Eikenberry, director of the U.S.-Asia Security Initiative, spoke with "Bloomberg Markets: Asia" about the ongoing trade disputes between the U.S. and China. Video of his interview—conducted on the sidelines of the Morgan Stanley China Summit in Beijing—is posted below.

 

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Early Childhood Development Takes Center Stage in China: Questions & Answer with Scott Rozelle and James Heckman

 

【编者按】2018年11月17日,詹姆斯·赫克曼(James J. Heckman)教授在西安召开的“2018年儿童早期发展国际论坛”上发表主旨演讲,出席会议的有来自世界各地和中国各地的政要和顶尖学者。赫克曼教授就儿童早期发展(ECD)质量对生活在贫困和富裕社区的婴幼儿的重要性进行了广泛和深入的概述。他在演讲中阐明儿童早期发展质量对一个人的童年及其终生的健康、经济和社会性结果都有重大影响。高质量的儿童早期发展项目对整个社会的影响也是巨大的。他特别强调了儿童早期发展的经济学意义,认为政府投资弱势儿童的早期发展,其社会回报率非常高。赫克曼教授借鉴了世界各地的研究成果,包括他自己以及美国和其他发达国家的其他学者的研究成果。

 

演讲结束后,他与会议组织团队进行了座谈,回答了关于他的研究以及其他科学家和社会科学家近期研究的一些基本问题。问答阶段的总目标是总结儿童早期发展对国家发展的重要性以及决策者在这一进程中的作用。在可能的情况下,赫克曼教授尝试从国际文献中为中国案例提供经验与启示。与詹姆斯·赫克曼教授的问答,由罗斯高(Scott Rozelle)教授主要负责。问答后附有对“赫克曼曲线”的简要述评。

 

Read the full story here.

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Ties between individuals and institutions in the United States and the People’s Republic of China have become broader, deeper, and stronger during the four decades since the establishment of formal diplomatic relations in 1979 and the relationship can no longer be described as fragile. However, it also cannot yet be considered a normal relationship, at least not from the perspective of American citizens, companies, and commentators on international affairs. The relationship between the two largest economies and military powers has many asymmetries. Chinese citizens and organizations have far greater access to the United States than Americans do to China and ordinary Americans increasingly perceive the relationship as unbalanced and unfair. The American business community, long the strongest supporter of U.S. engagement with China, has been alienated by Chinese actions and attitudes and, no longer, acts as a counterbalance to other constituencies dissatisfied with aspects of the relationship. The relationship is fractious but not destined for conflict. We have learned to solve or manage conflicts, but it is becoming harder to do so.

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China International Strategy Review
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Thomas Fingar
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“But as I read what the communist party, what President Xi says, I don't see the same fervor to the ideological dimension of what China is doing around the world...[compared to what] the Soviets were doing.”

It was during the 2019 Oksenberg Conference that FSI Director Michael McFaul made the preceding assessment. Titled On the Brink: A New Cold War with China, the conference sought to explore the causes underlying today’s intensified conflict between the United States and China. McFaul was joined on stage by APARC's Oksenberg-Rohlen Fellow David M. Lampton and China Program Director Jean Oi. Their panel followed an earlier fireside chat featuring keynote speaker Dr. Condoleezza Rice.

Rice, the 66th U.S. Secretary of State, opened the program with a wide-ranging conversation with Oi regarding our rapidly deteriorating trade relations with China. Among other topics, Secretary Rice drew contrasts between our current tensions with China and the Soviet-era Cold War; the potential sources of China’s increasing nationalism; and what the appropriate U.S. policy responses could be.

Condoleezza Rice (right) listens on as Jean Oi addresses the audience

Dr. Jean Oi (left) and Dr. Condoleezza Rice

Audio recordings and transcripts of the formal remarks by McFaul and Lampton are available below.

The annual Oksenberg Conference honors the legacy of Professor Michel Oksenberg. A renowned China scholar and senior fellow at Shorenstein APARC, Professor Oksenberg served as a key member of President Jimmy Carter’s National Security Council, guiding the United States towards normalized relations with China and consistently urging that the U.S. engage with Asia in a more considered manner.

 

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Jean Oi and Mike McFaul listening to David Lampton speak at Oksenberg Conference
Oksenberg-Rohlen Fellow David M. Lampton (right) responds to an audience question, as China Program Director Jean Oi (left) and FSI Director Mike McFaul listen on.
Rod Searcey
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Does the current trade-talk stalemate between the U.S. and China portend a larger confrontation? Oksenberg-Rohlen Fellow David Lampton says yes, and shared with VOA Asia reasons for why the two countries find themselves so much at odds. Listen below (first 8 minutes):

 

 

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Trucks line up to enter a shipping berth at the Port of Oakland
OAKLAND, CALIFORNIA - MAY 13: Trucks line up to enter a shipping berth at the Port of Oakland on May 13, 2019 in Oakland, California. China retaliated to U.S. President Donald Trump's 25 percent tariffs on $250 billion of Chinese goods entering the United States with a 25 percent tariff on $60 billion of U.S. goods entering China. The Dow Jones Industrial Average plunged over 700 points on the news in morning trading.
Trucks line up to enter a shipping berth at the Port of Oakland
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Western observers have raised concerns over the rise and now predominance of Chinese state-backed bilateral lending in international infrastructure development. These range from China's growing geopolitical influence to the increasingly unsustainable debt levels of some of the nations receiving investments as part of the Belt and Road Initiative (BRI). In fact the BRI today is simply the next phase of a decades-long shift in the infrastructure sector towards China and away from traditional western development lending institutions. In this study we observe the scale of this trend and its root causes in China's domestic and international development policies for infrastructure and the safeguards policies of western development programs. We use aggregate reporting on infrastructure lending and project-level case studies in nations that have transitioned from western institutions to the BRI. We highlight the need for reforms for China's lending programs, to increase transparency and the financial sustainability of projects, and for western development institutions to maintain environmental and social safeguards while still achieving their stated missions.

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Francis Fukuyama
Michael Bennon
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