Geoeconomics of a New Eurasia during the Fourth Industrial Revolution: The Role of China’s Innovation System, BRI and Sanctions from the Global North

Khan, Haider (2024): Geoeconomics of a New Eurasia during the Fourth Industrial Revolution: The Role of China’s Innovation System, BRI and Sanctions from the Global North.

Abstract

Abstract:

At least since Halford Mackinder’s work, The Geographic Pivot of the History, geopolitical analysis has identified the Eurasian landmass as a key prize in geopolitics. Historically, the post-revolutionary work by the Russian emigres presented a conservative Russian perspective on Eurasia. Recent developments, however, are more complex and invite us to analyze the intimate connections between economics and geopolitics---particularly, energy, technology, innovation systems and transportation corridors among other sectors. Innovation system of China will perhaps play a critical role along with the Russian innovation system in building a New (East) Eurasia during the new cold war. We can subsume under the expression Geoeconomics this intersection of international economics and geopolitics. Geoeconomics is developing as a field of inquiry and policy guidance in Global Security Studies, Global Political Economy and International Politics. Geoeconomics requires us to think in terms of new and old transportation corridors, international trade and finance, economic development or maldevelopment in a complex unevenly developed world of political economy and great power rivalry. As an overall framework, I develop a new modified form of realism which we might call critical trans-neoclassical realism (CTNR). Consistent with this somewhat novel theory, in our complex, uneven world of international competition, technological innovation needs to be reconceptualized as a complex dynamic system with national systems facing imperatives of both competition and cooperation. There is thus a call for increased efficiency. But this might neglect urgent needs for equity and thus could lead to greater polarization and overlook the critical needs of large numbers of people. In order to combine efficiency with equity in building the New Eurasia, I present a nonlinear complex dynamic systems model of innovation for China---applicable to Russia and other Eurasian countries--- within which both efficiency and equity can be addressed. For specificity and for facilitating concrete analysis during the still unfolding fourth industrial revolution, digital technologies based on semiconductor material foundation and the development of Artificial Intelligence (AI) are analyzed for China. Our framework of combining efficiency and equity in specific ways used for such concrete applications can be called socially embedded capabilities enhancing national innovation system or SECENIS. The Chinese SECENIS that is being built for the 21st century has important regional and geoeconomic implications for the future. The Chinese path shows that innovation systems are critical in building a region such as the New Eurasia. Russia is also trying to follow such a path. Other (East) Eurasian countries will need to follow such a strategy if they are to benefit from the New Eurasian and expanded BRICS arrangements.

• Item Type: MPRA Paper
• Language: English
• Keywords: Eurasia, Efficiency and Equity , Geoeconomics, SECENIS, Polarization ,China’s New Eurasia Strategy, Global Security Studies, Global Political Economy, International Politics and CTNR, China and the 4th industrial revolution, Innovation, AI, semiconductors, complex dynamic nonlinear systems model
• Subjects: F - International Economics > F3 - International Finance > F38 - International Financial Policy: Financial Transactions Tax; Capital Controls; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights

References

AeA (2007). “American Economic Association 2007 Annual Meeting.” In Abstracts of Papers to Be Presented at the Annual Meeting. Chicago. https://www.aeaweb.org/conference/2007/.

APEC (2005). “Biosecurity Planning and Surveillance Capacity for APEC...” Accessed February 26, 2022. https://www.apec.org/docs/default-source/publications/2005/8/apec-workshop-on-building-biosecurity-planning-for-apec-member-economies/05_atc_biosecurity.pdf.

Bell, D. (1998). The Cultural Contradictions of Capitalism. New York: Basic Books.

Bhalla, A. S., & Khan, H. (1985). “Technology Choice in the Energy and Textile Sectors in the Republic of Korea.” Essay. In Technology and Employment in Industry, 3rd ed. Geneva: International Labour Office.

Chatzky, Andrew, and James McBride. 2019 “China’s Massive Belt and Road Initiative,” Council On Foreign Relations. https://www.cfr.org/backgrounder/chinas-massive-belt-and-road-initiative

Diesen, G. (2017). Russia's Geoeconomic Strategy for a Greater Eurasia. London: Taylor & Francis Ltd.

Gabriele, A., & Khan, H. (2010). Enhancing Technological Progress in a Market-Socialist Context: China's National Innovation System at the Crossroads. Saarbrücken: Lap Lambert Academic Publishing.

Gilbert, Alan. 1999. Must Global Politics Constrain Democracy? Princeton: Princeton University Press.

Herscovitch, Benjamin. 2017. “A Balanced Threat Assessment of China’s South China Sea Policy”. https://www.cato.org/publications/policy-analysis/balanced-threat-assessment-chinas-south-china-sea-policy

Hirschman, A. O. (1945). National Power and the Structure of Foreign Trade. Berkeley: University of California Press.

Huntington, S. P. (1993). “Why International Primacy Matters.” International Security 17, no. 4: 68. https://doi.org/10.2307/2539022.

James, J., & Khan, H. (1997). Technological Systems and Development. Houndmills, Basingstoke, Hampshire: MacMillan Press Ltd.

James, J., & Khan, H. (1997). “Technology Choice and Income Distribution.” World development 25, no. 2: 153–165. https://doi.org/10.1016/S0305-750X(96)00098-8.

Jia, K., & Kenney, M. (2021). “The Chinese Platform Business Group: An Alternative to the Silicon Valley Model?” Journal of Chinese Governance 7, no. 1: 58–80. https://doi.org/10.1080/23812346.2021.1877446.

Jiang, X., & Khan, A. H. (2017). “Structural Change and Energy Use in China: A SAM-Based CGE Analysis.” The Chinese Economy 50, no. 6: 405–24. https://doi.org/10.1080/10971475.2017.1380021.

Jin, Keyu(2023). The New China Playbook. New York: Penguin.

Khan, H. A. (1983). “Technology, Energy, Distribution and Balance of Payments: A Macroeconomic Framework.” Unpublished dissertation, Cornell University, Ithaca, New York.

Khan, H. A. (1997). Technology, Energy, and Development: the South Korean Transition. Cheltenham, UK: Edward Elgar Pub.

Khan, H. A. (1998). Technology, Development and Democracy: Limits of National Innovation Systems in the Age of Postmodernism. Cheltenham, UK: Edward Elgar Pub.

Khan, H. A. (2002). “Innovation and Growth: A Schumpeterian Model of Innovation Applied to Taiwan.” Oxford development studies 30, no. 3: 289–306. DOI: https://doi.org/10.1080/1360081022000012707.

Khan, H. A. (2003a). “Technology and Modernity: Creating Social Capabilities in a POLIS.” Modernity and Technology.

Khan, H. A. (2003b). “What Can the African Countries Learn from the Macroeconomics of Foreign Aid in Southeast Asia.” Aryeetey, E., Court, J., Nissanke, M. and Weder, B.

Khan, H. A. (2004a). Interpreting East Asian Growth and Innovation: The Future of Miracles. Basingstoke, Hampshire England: Palgrave Macmillan.

Khan, H. A. (2004b). Global Markets and Financial Crises in Asia: Towards a Theory for the 21st Century. London: Palgrave Macmillan Limited.

Khan, H. A. (2005). " A New Theory with Case Studies in Globalization, Convergence, and Superconvergence of Emerging Technologies” In the International Workshop on Emerging Technologies: The Global Challenges of Convergence, Bangkok,14-15 Dec. http://www.apecforesight.org/emerging_tech/docs/HaiderPresentation_Dec05.ppt

Khan, H. A. (2008a). “Building an Innovative Economy through Managed Creative Destruction: A Theory with Applications to South Korea.” Econpapers.

Khan, H. A. (2008b). “Democracy in Bangladesh: from Crisis to Sustainability.” Journal of Bangladesh Studies.

Khan, H. A. (2010). “China’s Development Strategy and Energy Security.” The Rise of China and India, 108–37. https://doi.org/10.1057/9780230282094_6.

Khan, H. A. (2012). “Enhancing Economic Integration in the Asia-Pacific through the Strengthening of National Innovation Systems - Challenges and Strategies.” Asia-Pacific Technology Monitor.

Khan, H. A. (2015). “What Should the AIIB’s Priorities Be?” World Economic Forum, April 27. https://www.weforum.org/agenda/2015/04/what-should-the-aiibs-priorities-be/.

Khan, H. A. (2018). “The Future of Bangladesh: ICT and Technological Superconvergence.” Journal of Bangladesh Studies 18, no. 1-2.

Khan, H. A. (2021a). “AI, Deep Machine Learning via Neuro-Fuzzy Models: Complexities of International Financial Economics of Crises.” International Journal of Computational & Neural Engineering, 122–34. https://doi.org/10.19070/2572-7389-2100016.

Khan, H. A. (2021b). “Governing a Complex Global Financial System in the Age of Global Instabilities and BRICS.” Handbook of BRICS and Emerging Economies, 940–79. https://doi.org/10.1093/oso/9780198827535.003.0037.

-------------(2023a). Can BRI be the Road to Peace and Prosperity?. Econpapers https://econpapers.repec.org/paper/pramprapa/117081.htm

--------------(2023b). Towards a General Complex Systems Model of Economic Sanctions with Some Results Outlining Consequences of Sanctions on the Russian Economy and the World. Econpapers https://econpapers.repec.org/paper/pramprapa/116806.htm

---------------(2023c). The Economic and Geopolitical Consequences of Belt and Road Initiative (BRI)for China: A preliminary model-based analysis. Econpapers https://econpapers.repec.org/paper/pramprapa/117005.htm

---------and Jiang, X.2023. Geoeconomics, Structural Change and Energy Use in Iran: A SAM-Based CGE Analysis with Some Geoeconomic and Geopolitical Considerations. Econpapers https://econpapers.repec.org/paper/pramprapa/117155.htm

Khan, H., & Thorbecke, E. (1988). Macroeconomic Effects and Diffusion of Alternative Technologies Within a Social Accounting Matrix Framework: the Case of Indonesia. Aldershot, Hants, England: Gower Pub. Co. Print.

Khan, H. A., & Thorbecke. E. (1989). “Macroeconomic Effects of Technology Choice: Multiplier and Structural Path Analysis Within a SAM Framework.” Journal of policy modeling 11, no. 1: 131–156. DOI: 10.1016/0161-8938(89)90028-8.

Kim, L., & Nelson, R. R. (2015). Technology, Learning, and Innovation: Experiences of Newly Industrializing Economies. Cambridge: Cambridge University Press.

Lee, K. (2006). “China's Economic Catch-up: Washington Consensus or the Beijing Consensus, Selected Papers from the 2nd World Forum on China Studies (Abstracts).” In Exploration into the Theory and Practice of the Mode of China’s Development Panel 2.

Lin, J. Y. (2012). Demystifying the Chinese Economy. Cambridge: Cambridge University Press.

Liu, X., Cheng, P., & Chen, A. (2011). “Basic Research and Catch-up in China’s High-Speed Rail Industry.” Journal of Chinese economic and business studies 9, no. 4: 349–367. DOI: 10.1080/14765284.2011.618593.

Lundvall, B., & Rikap, C. (2022). “China's Catching-up in Artificial Intelligence Seen as a Co-Evolution of Corporate and National Innovation Systems.” Research Policy 51, no. 1: 104395. https://doi.org/10.1016/j.respol.2021.104395.

Miller, C.(2022). Chip War. New York: Scribner.

Nelson, R. R. (1990). “U.S. Technological Leadership: Where Did It Come from and Where Did It Go?” Research policy 19, no. 2: 117–132. DOI: 10.1016/0048-7333(90)90042-5.

Nelson, R. R. (1993a). “Technical Change as Cultural Evolution.” Learning and Technological Change, 9–23. https://doi.org/10.1007/978-1-349-22855-3_2.

Nelson, R. R. (1993b). National Innovation Systems: a Comparative Analysis. New York: Oxford University Press.

OECD (2007). “Annual Report 2007 - OECD.” Accessed February 26, 2022. https://www.oecd.org/newsroom/38528123.pdf.

Rose, Gideon. 1998. “Neoclassical Realism and Theories of Foreign Policy”, World Politics 51: 1, 144-172.

Schweller, Randall. 2018. “Opposite but Compatible Nationalisms: A Neoclassical Realist Approach to the Future of US–China Relations”. The Chinese Journal of International Politics 11:1, 23-48.

Wigell, M., & Vihma, A. (2016). “Geopolitics versus Geoeconomics: The Case of Russia's Geostrategy and Its Effects on the EU.” International Affairs 92, no. 3: 605–27. https://doi.org/10.1111/1468-2346.12600.

Zeng, J. (2021). “China’s Artificial Intelligence Innovation: A Top‐down National Command Approach?” Global Policy 12, no. 3: 399–409. https://doi.org/10.1111/1758-5899.12914.

Zhao, Suisheng. 2019. “Engagement on the Defensive: From the Mismatched Grand Bargain to the Emerging US-China Rivalry.” Journal of Contemporary China 28:118, 501-518.

__________ 2013. “Foreign Policy Implications of Chinese Nationalism Revisited: The Strident Turn.” Journal of Contemporary China 22:82, 535-553.