Category Archives: Trade

US and Allied Tariffs Could Democratize China

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Journal of Political Risk, Vol. 13, No. 3, March 2025

By Anders Corr

President of the United States Donald Trump speaking at the 2025 Conservative Political Action Conference (CPAC) at the Gaylord National Resort & Convention Center in National Harbor, Maryland.

President of the United States Donald Trump speaking at the 2025 Conservative Political Action Conference (CPAC) at the Gaylord National Resort & Convention Center in National Harbor, Maryland. Source: Gage Skidmore via Flickr.

The Chinese Communist Party is reacting to the Trump administration’s revolution in U.S. foreign policy with a full-court press in the media. President Donald Trump’s overtures to Russia’s Vladimir Putin are put front-and-center by Beijing so China can appeal to Europe, which sees Mr. Putin as anathema due to his invasion of Ukraine. And, the CCP is using Mr. Trump’s tariffs, against not only foes like China, but friends like Canada and the European Union, to criticize the United States as returning to the “law of the jungle.” In such a world, Chinese foreign minister Wang Yi said on March 7, small countries are disadvantaged relative to large countries. However, Mr. Trump’s tariffs against China, if adopted by all U.S. allies, would so threaten China’s economy as to potentially increase public disapproval with the CCP and encourage China’s democratization. This would remove the CCP’s support for Russia, killing the two biggest authoritarian birds with one stone. It is the one policy around which the United States, Europe, and Japan can best unite to bring down America’s traditional adversaries. Continue reading →

Modelling Country Risk of Zambia

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Journal of Political Risk, Vol. 12, No. 8, August 2024

Simon Muwando1
University of Lusaka

Victor Gumbo2
University of Botswana

Gelson Tembo3
University of Zambia

 

Abstract

The world has experienced a dramatic increase in the flow of transnational investments following increased internationalization and globalization of firms in the previous decade. Country risk exposure is a cause for concern for all the institutions that are engaged in multinational trade and finance. The main objective of this study was to model the Zambia’s country risk. A mixed method with concurrent research design was employed. An autoregressive distributed lag technique was employed on annual data from the 1994 to 2018 period. Country beta was used as a proxy for indicating country risk. The findings of the study revealed that the main determinants of country risk of Zambia in the short run are beta, current account balance, political risk, unemployment rate, and short-term interest rates. In the long run, country risk of Zambia is mainly influenced by current account balance, betas, political risk and unemployment rate. Effective policies need to be implemented by authorities to manage persistent current account deficits and political risk.

Key Terms: country risk; country risk analysis; internationalization; globalization; autoregressive distributed lag; Zambia; globalization

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Modelling the Country Risk of Zambia

Posted on by Assistant Editor

Journal of Political Risk, Vol. 10, No. 3, March 2022

Figure 1 depicts the international ranking of Zambia in terms of corruption. The graph shows an upward trend between 2001 and 2007, followed by a downward trend until 2015. An upward trend followed between 2015 and 2018.

Simon Muwando
University of Lusaka

Victor Gumbo
University of Botswana

Gelson Tembo
University of Zambia

Abstract

The world has experienced a dramatic increase in the flow of transnational investments following increased internationalization and globalization of firms in the previous decade. Country risk exposure is a cause for concern for all the institutions that are engaged in multinational trade and finance. The main objective of this study is modelling Zambia’s country risk. A mixed method with concurrent research design was employed. Personal interviews were the main instrument for collection of primary data and snowball sampling was used to select the interviewees. Secondary data was collected from the Lusaka Stock Exchange (LSE), Ministry of Finance, Bank of Zambia and Central Statistical Office. An autoregressive distributed lag technique was employed on annual data for the 1994 to 2018 period. This approach was chosen as it works best for small samples. The findings of the study revealed that the short run drivers for country risk of Zambia are beta, current account balance, political risk, unemployment rate and weighted short term interest rates. Current account balance was found to positively affect country risk while beta, political stability, and weighted short term interest rates negatively influence it.  The study findings established that the long run determinants of country risk of Zambia are current account balance, betas, political risk, and unemployment rate. From the study findings, current account balance positively influences country risk of Zambia whereas beta, and political stability negatively influence country risk of Zambia. The study concluded that the major determinant of country risk of Zambia in the short run and long run is current account balance as it has significant positive influence. Effective policies need to be implemented by authorities to manage or reduce persistent current account deficits and political risk, in order to manage country risk.

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Politics in the De-politicised: TikTok as a Source of China’s Soft Power

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Journal of Political Risk, Vol. 9, No. 11, November 2021

A person's hands are depicted holding a smartphone featuring the TikTik logo on its screen.

TikTok logo. Public domain, via Wikimedia Commons.

Zuza Nazaruk

Last year’s “TikTok war” revealed unprecedented hostility of the US government towards the Chinese tech newcomer. The seemingly innocuous software was developed by ByteDance, a Chinese unicorn company. TikTok is a sister app of Douyin, created for the Chinese market. Both apps allow users to share and watch short videos. In July 2020, then-President Donald Trump accused TikTok of a series of breaches, the most serious of which was sharing user data with the Chinese Communist Party (CCP) (Levine, 2020). Yet, some experts, including Adam Segal from the Council of Foreign Relations, considered the near-ban a smokescreen to hinder the growth of the most globally successful Chinese app to date (Campbell, 2020). In 2020, TikTok was the most downloaded app globally, with 89 million new users just in the US (Geyser, 2021). To date, 23% of Americans use or have watched TikTok, with an average American user having spent 14.3 hours monthly on the app in 2020 (Tankovska, 2021).

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US Trade Leverage Against China: An Interview with the Coalition for a Prosperous America

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Journal of Political Risk, Vol. 9, No. 10, October 2021

The image depicts two Maersk-Sealand 40' containers stacked on top of one another. Train tracks are visible in the background.

China Shipping – Maersk-Sealand 40′ Containers, Quebec, Canada, 2018. Source: Wikimedia.

Anders Corr, Ph.D.
Publisher of the Journal of Political Risk

This interview with Michael Stumo, the CEO of the Coalition for a Prosperous America, was conducted between October 5-6 via email.

Corr: Why and when did the Coalition for a Prosperous America begin?

Stumo: CPA started in 2008. Domestic manufacturers, farmers, ranchers and workers agreed that the biggest threat to their well being, and that of the economy, was the large, persistent US trade deficit.

Corr: How is Biden’s ally focus going for him on the issue of trade with China? Is Biden’s outreach to allies helping him on this issue?

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