Volume 2, Issue 1 January 2025

Future ScientistsEditorial BoardEditors-in-Chief Professor Shoujun Cui School of Global Governance, Renmin University of China, ChinaDeputy Editors in Chief Associate Professor Shugui Gao Brain Research Centre and the DjavadAssociate Professor Ling Gao Lingnan College, Sun Yat-sen University, ChinaEditors Associate Professor Yu Liu Business School, University of Texas Rio Grande Valley, United States of AmericaAssistant Professor Zheng Xu Department of Economics, Party School of C.P.C. Jiangsu Committee, Nanjing, ChinaAssistant Professor Yuping Jiao School of Politics and International Studies, Central China Normal University, ChinaAssociate Professor Hoo Tiang Boon School of Social Sciences, Nanyang Technological University, SingaporeJournal of International Economy and Global Governance (JIEGG) aims to provide a platform for rigorous academic research and discourse on issues pertaining to the international economy and global governance speciafically for undergraduate, master and PhD students that meet international academic standards. Our goal is to foster a dynamic exchange of ideas among academics, policymakers, and practitioners. We aspire to publish cutting-edge research that not only contributes to theoretical insights but also offers practical implications for addressing pressing global challenges, such as sustainable development. Through our commitment to excellence and intellectual integrity, we seek to establish the journal as a trusted source of knowledge and a catalyst for informed policy decisions and meaningful interventions in the international arena.Disclaimer: The Publisher Macao Scientific Publishers and Editors cannot be held responsible for any errors in or any consequences arising from the use of information contained in this journal. The views and opinions expressed do not necessarily reflect those of the Publisher or Editors, neither does the publication of advertisements constitute any endorsement by the Publisher, Editors, or Authors of the products advertised. For submission instructions, subscription, and all the latest information, visit:https://www.mospbs.com/journal/jiegg.htmlMacao Scientific Publishers（MOSP）https://www.mospbs.com

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MenuReviewIssue InformationArticleEconomic Cooperation and Conflict in the "Comprehensive Strategic Partnership" Between the United States and VietnamZewen YangChina’s Solution to Resist the "Core-periphery" Economic Cost Transferring: China’s Economic Diplomacy in the New Era Toward ASEAN Countries in the Financial Capitalist World SystemZewen YangInterpreting the Global Digital Compact: Charting a New Vision Towards a Multi-Stakeholder Governance ModelQifan Jiang, Yuhang MaResearch on BDI Index Prediction Based on LSTM Neural NetworkWenjie Li, HaiBo Bao，Xinge LeiU.S. Arctic Situational Awareness Capacity-building: Motivations, Paths and Its Implications for China’s Promotion of the “Polar Silk Road”Bo Yang(3)(27)Page(44)(66)(88)Volume 2·Issue 1Macao Scientific Publishers（MOSP）https://www.mospbs.com(103)

J. Int. Eco. Glo. Gov. Macao Scientifi Publishers（MOSP） https://www.mospbs.com/journal/jiegg 4·Article· Economic Cooperation and Conflict in the "Comprehensive Strategic Partnership" Between the United States and Vietnam Zewen Yang1,* 1 Department of Diplomacy and Foreign Affairs Management, China Foreign Affairs University, Beijing, China * Corresponding Authors: Zewen Yang. Email: 838967571@qq.com Received: 12 November 2024 Accepted: 25 November 2024 Published: 25 February 2025 Abstract: The development of the "comprehensive strategic partnership" between the United States and Vietnam is mainly driven by the demand for economic cooperation between the two countries, while the economic cooperation between the two countries also contains a great conflict that limits the development of political cooperation between the two countries. The economic factors driving the development of cooperation between the United States and Vietnam mainly include short-term cooperation factors caused by domestic economic problems of the two countries, long-term cooperation trends determined by the long-term development needs of the two economies, and the promotion factors of China-Vietnam trade to US-Vietnam trade. On the other hand, the transfer of economic costs from the United States to Vietnam has caused a conflict between the two countries. Vietnam, on the other hand, countered the economic cost transfer of the United States by exercising national economic sovereignty. In order to smoothly promote the transfer of economic costs, the United States needs to carry out political cost transfer activities such as "peaceful evolution" and violent subversion against Vietnam to obviate its national sovereignty. This conflict poses a direct threat to Vietnam's social stability, national sovereignty, and the Vietnamese Communist`s political power, fundamentally limiting the development of political cooperation between the United States and Vietnam. Keywords: United States; Vietnam China; Cost Transferring Theory; Economics 1. Introduction 1.1 The Study Background U.S. President Joseph Robinette Biden Jr. visited Vietnam on September 10, 2023, and the relations between the two countries was elevated from "Comprehensive Partnership" to "Comprehensive Strategic Partnership," bypassing the "Strategic Partnership" stage. The leap in the relations came after a long-standing lukewarm political relationship between the two countries since 2013. What factors led

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 to the sudden enhancement of bilateral cooperation? Does the elevation of the cooperative relationship between the two countries imply a mitigation of their conflicts, leading Vietnam to fully cooperate with the U.S. strategy to contain and suppress China? These two questions are closely related to China's foreign policy and national security. To answer these questions, it is necessary to analyze the internal 5logic of the development of cooperation and conflicts in the current bilateral relations. 1.2 Literature Review Currently, the existing studies on the cooperative relationship between the United States and Vietnam is primarily conducted from the perspective of realistic international relations theory and geopolitics. Admittedly, the logic of power-security has a certain explanatory power for the logic of the United States' promotion of political cooperation with Vietnam, but these studies overemphasize discussions within the framework of the strategic competition between China and the United States, focusing on the cooperative logic of "balancing" or "bandwagoning" for Vietnam as a small country between the two great powers, emphasizing the military and political cooperation between the United States and Vietnam, while neglecting the considerations of the two countries themselves for developing bilateral relations based on domestic economic needs. Studies on geopolitics emphasize the political and military cooperation between the United States and Vietnam driven by the disputes between China and Vietnam in the South China Sea. The studies start from the domestic perspective of foreign policy analysis, analyzing the economic logic of the development of cooperative relations between the United States and Vietnam, to supplement the shortcomings of previous studies that explained the development of bilateral cooperative relations solely based on political logic. In terms of conflicts in the relations between the United States and Vietnam, previous studies have focused on historical estrangement due to the war between Vietnam and the United States, differences in political systems and ideologies, and cultural disparities. It is undeniable that factors such as history, systems, and cultural differences can indeed explain, to some extent, the conflicts in cooperation between the two countries. However, whether these factors lead to the fundamental conflicts in the bilateral relationship is not clearly defined in previous studies. Therefore, it is necessary to reanalyze the fundamental conflicts in the current US-Vietnam relations and approaching from an economic perspective is an effective way to avoid falling into the aforementioned political appearances. Existing studies on the economic relations between Vietnam and the United States generally hold an optimistic view on the future development prospects of the bilateral economic ties and emphasize the new situation of economic cooperation between the two countries, while paying less attention to the conflicts within the economic production relations of Vietnam and the United States. Some studies have also noticed the conflicts in the economic relations between Vietnam and the United States, but focused on specific issues such as technical barriers, market access, especially anti-dumping lawsuits, without combining the specific economic conflicts with the abstract conflicts of production relations. Moreover, these studies essentially separate politics and economics into two related but fundamentally different categories, and therefore have not linked the economic conflicts of the two countries with

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 political conflicts. However, from the perspective of historical materialist politics, international politics is defined as activities and relations formed by international political entities in order to compete for and possess means of production and means of livelihood, around the power to distribute means of production and means of livelihood. This definition fundamentally categorizes the political and economic spheres as the same category, considering politics as the concentrated expression of the economy, and the fundamental purpose of political activities is economic. By this definition of politics, economic conflicts can naturally extend to the political level, and political conflicts are essentially a kind of economic conflict about the competition for means of production and means of livelihood. From the perspective of international relations theory, some scholars have also applied the historical materialist method to the analysis of international politics, starting from defining power based on "production relations", believing that power originates from the relations formed in the production process, and that each "structure of economic production relations" is a "relation of power", thus providing a theoretical logic that connects "production relations" and "political power". Therefore, this study adheres to historical materialism, analyzes the essence of political conflicts between the United States and Vietnam from an economic perspective, thereby constructing connections between economic conflicts and political conflicts, thus providing a different explanation for the conflicts caused 6by political subversion by the United States. Considering all the above, this study introduces the "Cost Transferring Theory" to analyze the conflicts inherent in the economic relations between the United States and Vietnam. It posits that Vietnam is situated within the production relations of the financial capitalist world system constructed around the United States, influenced by the power relations formed by this structure. While engaging in economic cooperation with the United States, Vietnam is compelled to bear the economic costs transferred by the United States. This economic conflict extends to the political level, thus causing political conflicts between the two countries, which means it is fundamental to the cooperation between the two nations, as it directly and continuously threatens Vietnam's national sovereignty and the political rule of the Communist Party of Vietnam. 2. Economic Factors Promoting the Development of Cooperation Between Vietnam and the United States Apart from the political considerations of security cooperation between the United States and Vietnam targeting China, the economic factors influencing Vietnam's rapprochement with the United States can be mainly divided into two aspects. From the perspective of short-term economic difficulties, Vietnam needs the U.S. market and investment to alleviate the current economic crisis, while the United States needs to increase imports of inexpensive Vietnamese goods to curb domestic inflation; from the perspective of long-term economic development, both countries need to promote the development of bilateral economic and trade relations to grow their own economies.

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 2.1 Short-Term Factors Promoting Economic Cooperation Development Between the 7Two Countries Since the global outbreak of the COVID-19 pandemic in 2020, countries around the world have successively implemented epidemic control measures, severely impacting the global industrial chain. During the process, Vietnam's economy, which is highly dependent on foreign trade, has been hit hard. Vietnam's domestic economy has faced difficulties and requires economic cooperation from the United States to stimulate growth. For Vietnam, 2020 was supposed to be the culmination year for two significant economic development plans: the "2016-2020 Socio-Economic Development Five-Year Plan" and the "2011-2020 Socio-Economic Development Decade Strategy." However, the outbreak of COVID-19 severely disrupted the rhythm of Vietnam's economic development: despite the Vietnamese government taking a multitude of economic stimulus measures, Vietnam's annual GDP growth rate in 2020 was only 2.9%, and due to the international supply chain being severely affected, the external market demand shrinking, Vietnam's total export growth rate in 2020 plummeted to 3.17%. The economic difficulties persisted into 2021. Vietnam's GDP only grew by 2.58% in 2021, which was significantly lower than the 6% growth target set by the Vietnamese government in November 2020, and also below the average growth rate of 2.9% for Southeast Asia that year. Benefiting from the lifting of COVID-19 restrictions in Vietnam, which has liberated economic activities, Vietnam's GDP growth rate reached 8.02% year-on-year in 2022, showing a rapid recovery compared to the lower economic data during the 2021 period of strict pandemic controls. However, this does not mean that the Vietnamese economy has fully recovered from the impact of the pandemic. With a high dependence on foreign trade exports, the Vietnamese economy is still severely affected by the decline in external demand due to the ongoing global economic downturn. Economic data for the fourth quarter of 2022 in Vietnam has already shown a downward trend, and by the first quarter of 2023, this trend has become even more pronounced: Vietnam's GDP growth rate for the first quarter of 2023 fell to 3.7%, lower than the 5.0% of the first quarter of 2022. The gross domestic production of industry and construction, which is most representative of a modern country's industrial capacity, has decreased by 0.4% year-on-year, indicating that Vietnam's industrial development is at risk of stagnation. What worries the Vietnamese government even more is that the pillars of economic development in recent years, the export of goods, has declined by 11.9% year-on-year, and the import of goods has also decreased by 14.7%. Vietnam remains deeply entrenched in the recession of global manufacturing industry. It is in such difficult circumstances that the trade in goods between the United States and Vietnam has continued to grow rapidly, bucking the trend and becoming a lifeline for Vietnam's economy. Even during the period of pandemic control, Vietnam's exports to the United States in 2020 still reached a staggering $77.077 billion, marking a substantial year-on-year increase of 25.7%, which was only slightly lower than the 29.0% increase in the same period of 2019 before the pandemic broke out.

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 Compared to the 7% year-on-year growth of Vietnam's total goods exports in 2020, this figure stands out as particularly impressive. In 2021, despite Vietnam's GDP growing by only 2.58%, exports to the United States increased by 24.9% year-on-year to reach $96.293 billion, a growth rate that was significantly higher than the 17.3% year-on-year increase in Vietnam's total goods exports for that year, demonstrating a pronounced driving effect. The proportion of Vietnam's exports to the United States in 2020 accounted for as high as 27.3% of the total, and in 2021 this figure rose to 28.6%. This highlights the importance of exports to the United States for Vietnam's export trade, especially in the face of economic difficulties caused by the pandemic, as Table 1 8shows. Table 1: Vietnam's Export Situation to the United States and Related Economic Indicators (2019-2022) Year Economic Indicator 2019 2020 2021 2022 Value (In Hundred Million Dollars) Growth Rate (%) Value (In Hundred Million Dollars) Growth Rate (%) Value (In Hundred Million Dollars) Growth Rate (%) Value (In Hundred Million Dollars) Growth Rate (%) GDP 2081.9 7.0 2142.5 2.9 2230.6 2.6 2462.6 8.0 Total Export Trade of Goods 2641.9 8.4 2826.6 7.0 3363.1 19.0 3713.0 10.5 Export of Goods to the U.S. 613.5 29.1 770.8 25.7 962.9 24.9 1093.9 13.6 Note: The Vietnam GDP data in the table are the results of the new method calculated by the General Statistics Office of Vietnam as of December 13, 2019. Source: The General Statistic Office of Vietnam, http:// www.gso.gov.vn. Therefore, for Vietnam, expanding export trade to the United States and strengthening economic cooperation with the U.S. is a reliable and inevitable rational choice in the face of economic difficulties. On the other hand, the significant pressure of domestic inflation in the United States has prompted the U.S. government to expand imports of inexpensive goods from Vietnam. Since 2021, the domestic inflation rate in the United States has continued to rise. In this round of U.S. inflation, the impact of supply chain shocks on inflation has been enormous. Taking food and clothing as examples: the year-on-year growth rate of the consumer price index (CPI) for food and non-alcoholic beverages surged from 2.1% in May 2021 to 10.9% in August 2022; the consumer price index for clothing goods rose from -3.8% in February 2021 to a peak of 6.7% in March 2022. Inflation in food and clothing has brought enormous pressure on the livelihood of middle and lower-class consumers in the United States. Therefore, the United States needs to stabilize the supply chain and expand the import of inexpensive

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 goods to curb domestic inflation, and naturally, expanding imports of inexpensive goods from Vietnam 9is also one of the ways to manage its inflation. Vietnam is one of the world's major exporters of agricultural, forestry, aquatic, textile, and apparel products, with high production volumes and low prices, which can better meet the United States' need. In 2021, the United States saw a significant increase in imports of agricultural, forestry, and aquatic products from Vietnam: Vietnam's fruit and vegetable exports to the United States increased by 31.99% year-on-year, compared to 12.54% in 2020, an increase of nearly 20%; Vietnam's aquatic product exports to the United States increased by 26.18%, with the previous year's figure being 10.35%, an increase of over 25%. The textile and apparel sector saw similar trends: in 2021, Vietnam's textile and apparel exports to the United States increased by 15.02%, while the 2020 data was -5.77%, significantly influenced by the United States' measures to increase imports in response to inflation. Data shows that in 2022, the United States maintained a similar high level of imports of related products from Vietnam, especially when the food inflation in the United States was most severe in 2022, Vietnam's rice exports to the United States increased by 85% year-on-year. However, by 2023, after the United States' inflation situation had significantly eased, Vietnam's export growth rate of agricultural, forestry, aquatic products, as well as textiles and apparel to the United States saw a noticeable decline, even negative growth. It is not difficult to see that from 2021 to 2023, the increase in Vietnam's export value to the United States in these areas was indeed due to the United States' short-term measures to combat inflation. As can be seen, the short-term need to address domestic inflationary pressures in the United States also drives the development of economic cooperation between the US and Vietnam. 2.2 Long-term Factors Driving the Development of Economic Cooperation Between the Two Countries The development of economic cooperation between Vietnam and the United States is influenced by the game of major powers, as well as the needs of each country's domestic development. Fundamentally, however, it is the needs of each country's economic development that determine the evolution of Vietnam-US economic cooperation. After the normalization of relations between Vietnam and the United States, the economic ties between the two countries have developed rapidly. In 1996, the bilateral trade volume between the U.S. and Vietnam was only $920 million, but by 2022, this figure had exceeded $123 billion. In the structure of 2022 Vietnam's imports, China was the largest import country with an import value of $118.77 billion; the United States ranked fifth with $14.47 billion. However, looking at the export data, the United States is the top export destination for Vietnam, reaching $109.39 billion; China, in second place, only accounted for $57.7 billion. Historically, in 1996, Vietnam's exports to the United States were less than $310 million, accounting for only 4.25% of Vietnam's total exports for that year, while by 2022, Vietnam's exports to the United States accounted for about 30% of Vietnam's total exports, far surpassing other countries. As Chart 1 shows, it is evident that the status of the United States in Vietnam's foreign trade economy has undergone a qualitative change.

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 10This change was driven by the common needs of both countries. Chart 1: Vietnam's Trade Value Changes with the United States (2000-2023) Source: CEIC database, https://www.ceicdata.com.cn. Firstly, for the Vietnamese government, economic development has always been the core of its domestic policies, and foreign policy also prioritizes serving the national economic development, with economic diplomacy at its center. Since the Sixth National Congress of the Communist Party of Vietnam in 1986 proposed "Renovation and Openness," the Party has made economic construction the focus of its work. The Sixth Congress emphasized that expanding exports should be the primary concern of all levels of departments. In 2003, the 8th Plenary Session of the 9th Central Committee of Vietnam clearly stated that "maintaining a peaceful and stable environment, developing the economy and society" is the highest national interest and that maintaining this interest is the core mission of Vietnamese diplomacy. At the Tenth Congress of the Communist Party of Vietnam held in 2006, Vietnam proposed a proactive foreign policy of integrating into the international economy, marking the introduction of a "integration into the international" strategy centered on economic diplomacy. At the 29th Vietnam Diplomatic Work Conference held in August 2016, the General Secretary of the Communist Party of Vietnam Central Committee, Nguyễn Phú Trọng, emphasized that the most important task of Vietnamese diplomacy is to maximize the acquisition of external resources to develop the country, while making significant contributions to safeguarding the country's independence, unity, and territorial integrity, and to maintaining a peaceful and stable environment. The Thirteenth Congress of the Communist Party of Vietnam held in 2020 comprehensively continued and developed the previous work route and the foreign policy centered on economic diplomacy. Therefore, for Vietnam, considering the long-standing importance of the United States in the global economy and the significance of the economic and trade relations between the two countries for Vietnam's economic development, promoting the development of economic cooperation with the United 020,00040,00060,00080,000100,0002000 2003 2006 2009 2012 2015 2018 2021 YearValue of Exports to the U.S. Value of Inports from the U.S.Value(In Million Dollars)

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 States is a subjective and rational choice made by Vietnam to develop its domestic economy. This choice is based on Vietnam's own development and is grounded in Vietnam's own interests, and it has nothing to do with the geopolitical factor of following the United States to suppress China. Regardless of the United States' attitude, as long as the Vietnamese government keeps building the domestic economy as its core pursuit, seeking to develop and deepen economic and trade cooperation with the United States will remain a long-term need for the Vietnamese government. This reality has determined the rapid development of the economic relations between Vietnam and the United States in the past and will also drive the further deepening of the economic relations bet11ween the two countries in the future. Secondly, while the United States' development of economic relations with Vietnam takes into account the strategic competition among major powers, it is more driven by the need for its own economic development. The development of economic relations between the United States and Vietnam is fundamentally driven by the needs of its own economic development. First of all, whether the United States' attempt to incorporate countries like Vietnam and China into the "liberal economic system" through "peaceful evolution" is truly out of purely geopolitical purposes remains to be discussed. Secondly, even if the United States hopes to transform Vietnam through "liberal economic reforms" for geopolitical purposes, why has the United States not slowed down or ceased the development of economic cooperation with Vietnam after Vietnam failed to actively cooperate with the U.S. to contain China since Vietnam has been integrated into the international community as the U.S. wished? Geopolitical considerations cannot explain why the U.S.-Vietnam economic relations have not stagnated but has continued to thrive. Furthermore, assuming the United States still blindly attempts to achieve a "peaceful evolution" in Vietnam's politics through "economic liberalization," how could the current massive and rapidly growing U.S.-Vietnam economic cooperation be artificially “produced” by the United States out of political needs? In the long run, the cooperation in the U.S.-Vietnam economic relations is real, because economic needs “produced” subjectively out of political demands may be able to sustain for a while, but certainly cannot last long, let alone continue to expand. Hence, as U.S. Secretary of State Warren Minor Christopher acknowledged in the 1990s when discussing the normalization of relations with Vietnam: "Many countries have surpassed the United States in trade with Vietnam, and we need to help American industry and trade accelerate on this path (towards normalization with Vietnam)." Clearly, although the development of economic relations between the United States and Vietnam is more or less influenced by geopolitical factors, the core driving force that sustains and promotes the long-term development of economic relations between the two countries can only be the needs of economic development in both the United States and Vietnam. Specifically, the United States seeks to further economic development and maintain long-term stability of domestic inflation by occupying Vietnam's electronic goods and service market, utilizing Vietnam's more competitive labor resources, and importing more inexpensive Vietnamese goods.

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 Firstly, despite the relatively small export volume from the United States to Vietnam, American multinational companies have a significant share in Vietnam's market, especially in the electronics and service sectors. In terms of electronics, taking smart devices as an example, American Apple Inc. has consistently held a market share of over 10% in Vietnam's smartphone market, ranking among the top five, with sales growing rapidly in recent years. In the service sector, using the food industry as an example, by 2022, seven American fast-food brands, including Pizza Hut VN, McDonald's, Popeyes Vietnam, Burger King Vietnam, Texas Chicken, KFC, and Subway, collectively held over 50% of the market share in Vietnam's fast-12food industry, dominating the market. Secondly, U.S. manufacturing enterprises need to utilize Vietnam's more competitive labor force. Since the 1970s, with the continuous increase in labor costs in the U.S. manufacturing sector, American manufacturing companies have moved their production lines to countries and regions with lower labor costs to reduce production costs. The main destination has been China. Currently, with the intensifying trend of population aging in China and the rapid rise in labor costs, Vietnam's labor resources appear increasingly competitive for U.S. manufacturing enterprises: By the end of 2021, about one-quarter of Vietnam's population was under the age of 25, the average age of the national population was only 32, and the working-age population accounted for 68.7% of the total population, indicating a rich labor resource; while Vietnam's wage levels are only about 50% to 70% of those in China's Zhujiang Delta region, making them relatively cheap. Therefore, apart from the impact of the intensifying strategic competition between China and the U.S. on the manufacturing industry chain, U.S. manufacturing industries also need to relocate factories to Vietnam to pursue lower costs. Finally, for the United States, its economic structure has transformed from real to virtual, and it periodically adopts quantitative-easing to stimulate economic growth, which leads to potential inflationary pressure due to long-term over-issuance of the U.S. dollar. Therefore, it needs to invest in emerging market countries like Vietnam and disperse excess U.S. dollars by importing large quantities of inexpensive goods from countries like Vietnam to maintain low domestic inflation. Thus, both Vietnam and the United States have the need to maintain and promote the development of economic cooperation between the two countries. The deepening development of Vietnam-U.S. relations, with economic cooperation at its core, is a long-term trend. 2.3 The Sino-Vietnamese Trade Cooperation Promoting the Development of America-Vietnamese Economic Cooperation The core content of the economic relations between Vietnam and the United States is the trade of goods between the two countries. What`s more, Vietnam's processing and manufacturing industry is the core industry supporting Vietnam's export trade to the United States, and the production of Vietnam's processing and manufacturing industry is premised on imports from China. Therefore, the development of trade cooperation between China and Vietnam promotes the development of commodity trade between Vietnam and the United States.

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 Table 2: The top 5 commodities exported by Vietnam to the United States in 2022 and their share in 13the total value of exports to the United States. Table 3: The top 5 commodities imported from China by Vietnam in 2022 and their proportion of the total import value from China Table 4: Top 10 specific product values and their proportion in the total value of electrical machinery and equipment and their parts imported from China by Vietnam in 2022 Varieties Value (In Thousand Dollars) Proportion (%) Telephone sets, incl. smartphones and other telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network, parts thereof 11572798 26 Electronic integrated circuits; parts thereof 9795038 22 Parts suitable for use solely or principally with flat panel display modules, transmission and reception apparatus for radio-telephony, radio-telegraphy, radio-broadcasting, television, television cameras, still image video cameras and other video camera recorders, radar apparatus, radio 3171710 7 Varieties Value (In Thousand Dollars) Proportion (%) Electrical mechanical equipment and its parts 38969767 36 Nuclear reactors, boilers, machinery and mechanical equipment components 10648360 10 Furniture and bedding, etc 10037877 9 Knitted or crocheted garments and garment accessories 9827382 9 Footwear, leggings, etc; parts of such items 9662590 9 Varieties Value (In Thousand Dollars) Proportion (%) Electrical mechanical equipment and its parts 45350893 39 Nuclear reactor, boiler, mechanical equipment and its components 12909215 11 Plastics and its products 7016500 6 Steels 5099412 4 Knitted or crocheted fabrics 3950787 3

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 14navigational aid apparatus or radio remote control apparatus, n.e.s. Electric accumulators, incl. separators therefor, whether or not square or rectangular; parts thereof (excl. spent and those of unhardened rubber or textiles) 2878179 6 Printed circuits 2598866 6 Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits, e.g., switches, relays, fuses, surge suppressors, plugs, sockets, lamp holders and junction boxes, for a voltage <= 1,000 V 2020133 4 Electrical transformers, static converters, e.g. rectifiers, and inductors; parts thereof 1808007 4 Insulated "incl. enamelled or anodised" wire, cable "incl. coaxial cable" and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 1524826 3 Semiconductor devices "e.g. diodes, transistors, semiconductor-based transducers"; photosensitive semiconductor devices, incl. photovoltaic cells whether or not assembled in modules or made up into panels (excl. photovoltaic generators); light emitting diodes "LED", whether or not assembled with other light-emitting diodes "LED"; mounted piezoelectric crystals; parts thereof 1335855 3 Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus 1038999 2 Source：Table 2、Table 3 and Table 4 are based on the dates from International Trade Center, http://www.trademap.org. From the structure of Vietnam's exports to the United States, in 2022, the main categories of goods exported from Vietnam to the US were electrical machinery, equipment and their parts, industrial machinery and components, as well as textiles and apparel products. When looking at the structure of goods that Vietnam imports from China, the main categories of goods imported from China in 2022 highly overlap with the main categories of goods exported to the US, with very similar proportions.

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 According to Table 2, these products together account for nearly three-quarters of the total value of goods exported to the US, with electrical machinery and equipment products alone accounting for more than 35%, making them the main category of goods exported by Vietnam to the US. Based on data from Tables 3 and 4, it is known that the electrical machinery, equipment, and their parts imported by Vietnam from China are mainly fine components and modular parts needed for assembling finished machines. In contrast, the electrical machinery and equipment exported by Vietnam to the US are mostly finished assembled-products. Therefore, both the US and China are at opposite ends of the production relationship for Vietnam's import-processing manufacturing industry. The growth in Vietnam's exports to the US necessarily requires it to expand imports of raw materials, components, and production equipment from China. This means that the development of economic cooperation between Vietnam and the US is based on the development of economic cooperation between Vietnam and China. Vietnam's economic relations with both countries are interconnected and integrated, rather than 15competitive or conflicting. It means that maintaining good political relations with China and the United States at the same time is a rational choice to maintain the steady development of Vietnam's economy, and it is harmful not only to the development and stability of Vietnam's economy and society, but also to the import and export trade between the United States and Vietnam to fully cooperate with the U.S. containment policy towards China and act as the vanguard against China. Therefore, the current trend of the long-term development and expansion of economic cooperation between Vietnam and the United States contains the requirements of Vietnam to expand imports to China and seek balance between China and the United States. Thus, it is evident that the development of Sino-Vietnamese trade is also a factor that drives the development of economic cooperation between Vietnam and the United States. 3. The Conflicts Between the United States and Vietnam Caused by Dual Cost Transferring Since the 1970s, the United States, which was originally dominated by industrial capital, has begun to experience a transformation in economic structure from the real to the virtual, gradually becoming a country dominated by financial capital. In this process, the world system has also transitioned from the stage of industrial capital to the stage of financial capital. In the world system of the financial capital, the United States, as the core country, has an exploitative relationship with the peripheral country Vietnam at both economic and political levels, with the two being interdependent. 3.1 Vietnam Is Drawn into the World System of the Financial Capital Centered Around the United States According to the definition of the world system theory, in the context of globalization competition, different countries are divided into three zones based on their division of labor in the world economy, namely the core, the semi-periphery, and the periphery, thus forming the capitalist world system. The biggest difference between the core zone and the periphery zone is that the core zone refers to areas

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 with high technology content, capital-intensive, and high-wage products; while the periphery zone refers to areas with low technology content, labor-intensive, and low-wage products. The relations between the core and the periphery is of unequal economic exchange. The reason why the capitalist world system is generated and maintained lies in the unequal exchange that exists between the core and 16the periphery. Starting in the 1970s, driven by the pressure of cyclical overproduction crises and the further pursuit of profit, the United States began to experience a transformation in economic structure from the real to the virtual. As the finance-centered tertiary industry gradually took a dominant position, the United States' geopolitical strategy, which was once oriented towards the interests of industrial capital, gradually transformed into a currency-political strategy oriented towards the interests of financial capital. Consequently, the world system has turned out to be the financial capitalist world system. In the era of financial capitalism, the main content of the unequal relations between the core and the periphery in the world system is the dual cost transferring from the core countries to the peripheral countries in both economic and political terms. It was during this period that Vietnam implemented the "Renovation and Opening Up" strategy, seeking to establish a market economy and joining the global market. However, it must be pointed out that this so-called global market is a market dominated by the United States and settled in US dollars. Therefore, whether or not Vietnam normalizes diplomatic relations with the United States, upon joining the global market and engaging in international trade in US dollars, Vietnam has already been drawn into the world system centered around the United States in the era of financial capitalism, as a peripheral nation, bearing the costs transferred by the core country, the United States. 3.2 The Economic Cost Transferring by the United States to Vietnam The root cause of the economic cost transferring lies in the debt-driven economic development model of the core country, the United States, which is characterized by a virtual economy. This model has led to two issues: firstly, quantitative-easing policies have resulted in excessive issuance of the US dollar, causing domestic inflation; secondly, the virtual economy does not produce goods, making it difficult to meet the basic needs for production and living materials domestically. To solve these two issues, the core country, the United States, must first leverage its unique advantages of international institutional power and finance-currency power to transfer its economic cost to peripheral countries represented by Vietnam. To address the first issue, the United States relies on globalization centered around financialization, utilizing the status of the US dollar as the primary settlement and reserve currency in global markets to disperse domestically excessive dollars generated by quantitative-easing policies into international markets of commodities, driving up global energy, raw material, and food prices, resulting in imported inflation for peripheral countries that need to purchase these essential goods. To solve the second issue, the United States uses the inflation and contraction cycle of the dollar supply to gain huge profits from "shearing the sheep." In the dollar cycle, when the Federal Reserve increases the supply of dollars and maintains low capital interest rate, financial capitals leave the United States to invest and acquire in peripheral countries, taking over these countries' economic lifeline

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 industries to gain substantial profits from localized production. When the Federal Reserve ends the massive increase in the supply of dollars and raises capital interest rate, global financial capitals flow back to the United States with the profits from investments. In this process, on the one hand, the profits generated by foreign investment in peripheral countries do not stay locally, causing these countries to have difficulty in making real capital accumulation, leaving only labor-capital conflicts; on the other hand, the massive repatriation of foreign capitals from peripheral countries will trigger market turmoil in these countries, including currency devaluation, economic slowdown, and even recession. The United States gains the monetary profits from the return, allowing it to purchase inexpensive manufactured goods from other countries on the world market to meet domestic needs while maintaining low inflation 17domestically. Through these two methods, the core country is able to transfer economic cost onto the peripheral countries. This is essentially the nature of the core countries' currency-political strategy in the era of financial capital. Specifically, Vietnam, after its "Renovation and Opening up" policy，as a peripheral country, has passively experienced the impact of the transfer of economic cost from the United States, which is mainly reflected in the following three aspects. Firstly, the long-term inflation in Vietnam caused by the use of the US dollar. This inflation stems from two factors. One is that Vietnam must first issue a large amount of Vietnamese Dong to hedge against and acquire US dollar as foreign exchange reserves in order to purchase commodities like oil in the international market. The other is that Vietnam's exports of food, industrial products, etc., are settled in US dollars on the international market, which also leads to an increase in domestic US dollar reserve, necessitating the issuance of more Vietnamese Dong to maintain exchange rate stability. The combination of these two factors results in a significant surplus of Vietnamese Dong within Vietnam, causing its domestic inflation. Since 2000, its CPI data has consistently been above 8%. After Vietnam joined the World Trade Organization in 2007, its foreign exchange reserve of US dollars grew by more than 100%, and the annual growth rate of the money supply was between 20% and 30%, leading to a CPI peak of 19.9%. Although in recent years, with the cooling of Vietnam's economic development, its inflation level in 2023 is not high, this underlying inflationary pressure still exists.

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 Chart 2: Line Chart of Exchange Rate Changes of Vietnam's Sovereign Currency (1995-182022) Source: CEIC, https://www.ceicdata.com.cn. Secondly, the US dollar cycle poses impact on Vietnam's exchange rate and economic development. In 1989, Vietnam began to implement a single floating exchange rate system, at which point foreign capital flows were relatively free. This directly led to the Vietnamese Dong exchange rate falling from 1 US dollar to 11,119 Vietnamese Dong in July 1997 to below 14,000 when foreign capitals flowed back to the United States, causing a rapid depreciation of the Vietnamese Dong and a drop in Vietnam`s GDP annual growth rate from 9.6% in 1996 to 5.8%. Therefore, after the Asian financial crisis, the Vietnamese government began to impose controls on foreign exchange flows and implemented a managed floating exchange rate mechanism. Even so, after the 2008 international financial crisis, the Vietnamese Dong exchange rate still fell from 1:16,112 in February 2008 to 1:20,678 in February 2011, a depreciation of 28%, while the GDP annual growth rate also slowed from 8.4% in 2007 to 6.2%. In the latest round of the US dollar tightening cycle, the Vietnamese Dong exchange rate plummeted from 1:22,450 at the beginning of 2022 to 1:24,783 by the end of the year. Despite Vietnam's continuous strengthening of controls over foreign capital flows, the trend of Vietnamese currency depreciation with the impact of the US dollar cycle has been difficult to reverse, as it is shown in Chart 2. At the same time, the Federal Reserve's aggressive interest rate hikes directly caused a global flow of dollars back to the United States, leading to the withdrawal of foreign capitals from emerging markets such as Vietnam. By December 20, 2022, the total foreign direct investment Vietnam received that year amounted to $27.72 billion, dropped by 11% year-on-year. Entering 2023, this trend has become even more pronounced. This has directly led to a decline in the exchange rates of countries like Vietnam, insufficient corporate financing, and a large number of business closures. The economic downturn has also resulted in government fiscal tightening, salary cuts and layoffs by companies, reducing the purchasing power of society. Thirdly, the unfair exploitation in the Vietnam-U.S. trade relations deteriorates due to the increasingly wide exchange rate gap. As a result of the long-term depreciation of the Vietnamese currency, the United States has been able to take advantages of the significant benefit of a rising dollar to purchase inexpensive Vietnamese manufactured products in large quantities. This means that the United States is exploiting and appropriating the surplus labor value embodied in goods by the 1000012000140001600018000200002200024000Vietnam Dong/US DollarYear

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 Vietnamese people. Considering that these simple manufactured products are not high-value-added products, and with the continuous depreciation of the Vietnamese Dong, the inequality in trade between Vietnam and the United States will increase in tandem with the development of economic relations between the two countries, making the labor-capital conflicts within Vietnam increasingly acute and 19posing challenges to the stability of Vietnam's domestic society. 3.3 The Political Cost Transferring by the United States to Vietnam Due to the harm caused by the economic cost transferring to peripheral countries, in order to safeguard their own interests, these countries attempt to take resistance measures. The key to countering the economic cost transferring by the core country lies in national sovereignty. Therefore, for the core country, the only way to facilitate the free flow and profit of financial capital abroad and to control the real assets of peripheral countries is to advance a currency-political strategy that involves eliminating the financial and monetary sovereignty of non-core countries. This strategy helps meet the growing demand for expanded reproduction of financial capital. Vietnam has attempted to resist the economic cost transferring by the United States through administrative measures to intervene in the economy. The Vietnamese government has revised the Investment Law multiple times and introduced the Foreign Exchange Management Regulations to impose strict restrictions on foreign investment and its flow, actively intervening in foreign exchange movements. By the Investment Law, Vietnam has imposed relatively strict restrictions on foreign investment in nine areas: first, projects that affect national defense, security, and social order; second, financial projects; third, projects that impact public health; fourth, projects related to culture, communications, newspapers, and publishing; fifth, entertainment projects; sixth, real estate projects; seventh, projects related to the exploration, search, prospecting, extraction of natural resources, and ecological environment; eighth, education and training projects; ninth, other projects as stipulated by law. For example, in Articles 30, 31, and 32 of the Investment Law (2020 edition), the Vietnamese government has imposed restrictions on foreign investment in the use of "forest land of special use, upstream protective forests, border protective forests, and production forest land exceeding 50 hectares, as well as in the construction of airports and ports". Foreign investors wishing to engage in these matters concerning the country's land and lifelines must obtain approval from the provincial-level government of Vietnam or even the National Assembly and the Prime Minister. In the Foreign Exchange Management Regulations (2005 edition), the Vietnamese government stipulates that foreign-invested enterprises in Vietnam must open special foreign exchange accounts at licensed banks, and all capital transactions must be conducted through these accounts; foreign institutions and individuals collectively holding shares in listed Vietnamese companies must not exceed 30% of the company's listed shares; Vietnamese land is not allowed to be owned by foreign investors and must be leased from the state. Furthermore, on August 20, 2019, the Central Committee of the Communist Party of Vietnam issued the "Resolution on Perfecting the System and Policies to Improve the Quality and Effectiveness of Foreign Investment Cooperation by 2030", which, while proposing the future strategic priorities for

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 attracting foreign investment in Vietnam, emphasizes the need to ensure "national defense security" in the use of foreign investment and proposes to "study and supplement the regulations on 'national defense security conditions' in the review and issuance of new investment licenses and in the review of investment activities through the form of capital contribution and share purchase". It is evident that the 20Vietnamese government imposes strict controls on foreign investment. Therefore, in order to advance the economic cost of transferring, core countries must also synchronize the political cost of transferring to peripheral countries. The political cost transferring is centered around "denationalization," with the main methods being various subversion activities in the name of color revolutions, which are promoted by the United States through using soft powers in peripheral countries. Specifically, the political cost transferring from the United States to Vietnam is reflected in two aspects. On one hand, the United States implements political subversion activities through the infiltration of liberal ideology, terrorist attacks, and direct instigation of anti-communist activities. From the outset, the political objectives of the United States have been inseparable from its economic needs: the United States believes that the normalization of relations with Vietnam will promote further economic reform processes in Vietnam towards a more liberal direction.Therefore, since the normalization of relations between the United States and Vietnam in 1995, the United States' policy of "peaceful evolution" and subversion of the Communist Party of Vietnam has never stopped. In the past, the content directed against the Communist Party of Vietnam can be seen everywhere in television, news newspapers, film and television. Now, with the change of information carrier, the western social platforms and medias are full of false information or statements against the Communist Party of Vietnam`s political power. In response, Võ Văn Thưởng, the former Minister of Propaganda and Training of the Communist Party of Vietnam, issued an article titled "The Impact of Social Media on Vietnamese Society and Political Stability" in the Communist Review. He specifically mentioned foreign social media platforms such as Facebook and YouTube, and pointed out that "some internet users trained by foreign organizations exploit the vulnerabilities in Vietnam's network management to infiltrate the social information system, spreading 'political viruses' that aim to undermine the leadership of the Communist Party and overthrow the socialist system. They create division among the Party and the people, attempt 'peaceful evolution,' incite illegal protests, and provoke riots." In response to the United States' use of social media and the internet to offload political costs, the Vietnamese government has also countered by exercising its domestic sovereignty. On June 12, 2018, the fifth session of the 14th National Assembly of Vietnam passed the Cybersecurity Law which prohibits the public from posting information online related to anti-government activities, distorting history, denigrating the achievements of the Vietnamese revolution, undermining national unity, defaming religions, gender or racial discrimination, and various types of false information. Furthermore, the law stipulates that foreign internet companies such as Facebook and Google must establish offices

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 in Vietnam and store Vietnamese users` data within the country. Answering to that, the United States 21had previously pressured Vietnam to postpone the vote on this law. With the development of American financial capitalism and the setbacks in the progress of "peaceful evolution" policy, the United States has become dissatisfied with "peaceful evolution" and has adopted more direct violent subversion tactics. For example, in June 2023, during terrorist attacks on two police stations in Dak Lak province, Vietnam, the Vietnamese police found that the suspects who planned the terrorist attacks were dispatched by a terrorist organization based in the United States. Subsequently, the Vietnamese government characterized this event as a "terrorist incident directed and supported by hostile forces abroad against the people's government." Moreover, the United States directly supports and manipulates the so-called "Vietnam Reform Revolutionary Party" within Vietnam to continuously carry out "color revolutions" against the Communist Party of Vietnam, attempting to overthrow the Vietnamese authorities and establish a so-called "democratic Vietnam." In 2011 and 2014, large-scale demonstrations that broke out in Vietnam initially targeted China, but later shifted their focus to the Communist Party of Vietnam, continuously using aggressive means to challenge the Communist government. Behind this was the incitement and guidance of the "Vietnam Revolutionary Party". On the other hand, the United States has imposed sanctions on Vietnam under the pretext of "human rights," refusing to recognize Vietnam's market economy status, and directly exerting external political pressure on Vietnam through "Section 301 investigations." First, in 2004, the U.S. Congress passed the "Vietnam Human Rights Act", freezing all non-humanitarian aid to Vietnam. Since then, the U.S. Congress has passed the "Vietnam Human Rights Act" multiple times, with its core concerns mainly focused on Vietnam's domestic "political dissidents" and the "freedom of assembly, press freedom, and electoral rights" of workers, while turning a blind eye to other human rights issues that truly affect the Vietnamese people. At the same time, it holds Vietnam to a higher standard of human rights than other countries, including the United States, highlighting the essence of U.S. political suppression against Vietnam. Secondly, at the end of 2006, Vietnam joined the World Trade Organization, but the United States did not recognize Vietnam's market economy status. According to the relevant commitments, the United States was to regard Vietnam as a non-market economy for 12 years, which would have continued until 2019. However, as of 2023, the United States still refuses to recognize Vietnam's market economy status and grant it the relevant treatment, instead using "recognition" as a means to coerce Vietnam into "liberalizing" economic reforms. Thirdly, in October 2020, the U.S. Trade Representative's Office announced the initiation of a "Section 301 investigation" into Vietnam's timber and exchange rate policies, accusing the Vietnamese government of government intervention in exchange rates, directly targeting Vietnam's financial sovereignty. Through these two approaches, the United States attempts to completely undermine the sovereign capacity of Vietnam to resist the economic cost transferring. It is this direct threat to Vietnam's national sovereignty and the Communist Party of Vietnam's political power that determines the status of the

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 fundamental conflict between Vietnam and the United States, which is rooted in the dual-cost-transferring, in the relations between the two countries. Its importance far exceeds the differences that arise from historical conflicts, institutional and cultur22al differences. In summary, it is the political and economic cost transferring by the United States to the Vietnam in the world system of the financial capitalism that determines the essence of the US-Vietnam relations as a combination of cooperation and conflict. And fundamentally, it is the economic mode of the core country of the United States that dictates its inevitable transfer of dual costs to peripheral countries. Therefore, as long as the United States does not change its economic mode, or the Vietnamese government still maintains a relatively complete national sovereignty, then its cooperation with the United States will necessarily be imbued with conflict. Therefore, the development of political relations between the United States and Vietnam will not fundamentally eliminate the conflict between the two countries. On the contrary, the political and economic conflicts between the two nations are likely to grow as the economic cooperation develops. This conflict poses a direct threat to Vietnam's national sovereignty and the Communist Party of Vietnam's political power, determining its nature as the fundamental conflict amidst all conflicts in the US-Vietnam relations. 4. Suggestions for China to Develop Relations with Vietnam After the Enhancement of U.S.-Vietnam Relations Under the political facade of the relations between Vietnam and the United States being elevated to "comprehensive strategic partnership", Vietnam, as a peripheral country, has inherent conflicts with the core country, the United States. As a semi-peripheral country, China remains within the category of the peripheral zone, for which China also suffers from the exploitation of the dual-cost-transferring by the core country, the United States. This provides a common interest base for the development of Sino-Vietnamese relations and also points out the theme for cooperation between the two countries. The Vietnam`s domestic policy priorities focus on economic development, and its foreign policy is also centered on serving domestic economic growth. Guided by this policy, Vietnam's primary consideration in improving relations with the United States is economic factors. Therefore, the development of relations between China and Vietnam should also take the development of economic relations as the core. Specifically, the Chinese government can promote economic cooperation with the Vietnamese government in two aspects. Firstly, the industrial shift sets the stage to promote close integration between China and Vietnam in the upstream and downstream of the manufacturing industry chain. As the largest industrial capital country, China's manufacturing industry is in the process of transformation and upgrading, shifting some of the mid-to-downstream industrial production to Vietnam. Therefore, these Chinese manufacturing enterprises in Vietnam naturally maintain connections of production relations with the upstream and midstream industrial chains in China. The Chinese government can utilize these connections to

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 negotiate with the Vietnamese government to establish channels for the flow of production factors and personnel between the two countries' industrial chains, ensuring that these channels are unobstructed and rapid, enhancing the close integration between the upstream and downstream of the industrial chain, with the aim of strengthening the political ties between China and Vietnam due to the development of 23production relationships. Secondly, it is necessary for both parties to further promote the local currency settlement in trade between China and Vietnam. Vietnam's processing manufacturing industry, which mainly exports to the United States, needs to import a large number of components from China. This means that the more Vietnam's trade with the United States develops, the greater the demand for imports from China grows, and the greater the demand and motivation for both sides to promote local currency settlement increase. Currently, China and Vietnam have piloted local currency settlement in border trade. In the future, in line with the development of trade between China and Vietnam, efforts should be made to further promote local currency settlement trade in a broader range of fields and larger areas. Also, to reach a currency swap agreement may help promote the cooperation between China and Vietnam as both of them share the needs to avoid the impact by the US dollar cycles on their exchange rates. According to the functionalist regional integration theory, during this process of advancing economic and technological cooperation in a non-political manner, departments and enterprises with similar functions in China and Vietnam can build mutual trust through non-political interactions and establish unique channels of communication between departments and enterprises. At the same time, as cooperation progresses in one functional area, the two countries can use these existing channels of communication to expand new and other areas of cooperation, achieving extensive communication, understanding, and cooperative trust between China and Vietnam, from society to government. Ultimately, through the economic cooperation centered on the development of production relations, political cooperation between China and Vietnam can be advanced. 5. Conclusion Behind the elevation of the "comprehensive strategic partnership" between the United States and Vietnam, it is economic factors that drive the development of bilateral cooperation, and also determine the irreconcilable conflict between the two countries. For the United States, its domestic virtual economy and debt-driven economic development mode dictate that American society faces long-term pressure from cyclical crises, forcing the United States to offload political and economic costs onto peripheral countries like Vietnam to maintain its own survival and development. Therefore, as long as the U.S. economic development mode does not change, the cost transferring to Vietnam will not cease. Furthermore, in the face of Vietnam's efforts to maintain balance between China and the United States while refusing to "take sides," the United States has not slowed down or stopped developing economic relations with Vietnam but has chosen to further elevate the bilateral relations.

J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 For Vietnam, the core concern of its foreign policy is to serve domestic economic construction and ensure domestic stability and security. Maintaining and expanding exports to the United States is of utmost importance for Vietnam's economic development, and therefore, developing relations with the United States aligns with Vietnam's domestic economic goals as a rational choice. However, the political and economic cost-transferring from the United States fundamentally pose a real threat to Vietnam's social stability, national sovereignty, and the Communist Party of Vietnam's regime, directly harming Vietnam`s core interests. The economic conflicts between the United States and Vietnam extend from the economic level to the political level and have become the fundamental conflict between the two countries, greatly limiting cooperation at the political level. This conflict can only be alleviated 24if the Vietnamese government completely abandons national sovereignty. In a word, the current development of the "comprehensive strategic partnership" between the United States and Vietnam is affected by the geopolitical factors of the U.S. strategy of containing China, but the fundamental determinant of the development of bilateral relations is still the needs of economic development of the two countries. The United States' political and economic cost-transferring to Vietnam has led to the conflict in the cooperation between the two countries. The promotion of the "comprehensive strategic partnership" between the United States and Vietnam does not mean the easing of the conflicts between the two countries. On the contrary, it means that the conflict between the two countries expand with the development of cooperation, making it more difficult for Vietnam to cooperate with the United States' strategy of suppression and containment against China. Acknowledgement None. Funding Statement None. Author Contributions The author confirms sole responsibility for the following: study conception and design, data collection, analysis and interpretation of results, and manuscript preparation. Availability of Data and Materials The data and materials on which the study is based were accessed from a repository and are available for downloading through the following links. https://www.gso.gov.vn. https://www.ceicdata.com.cn. https://link.gov.vn/yrJwylN3. https://www.c-span.org/video/?66095-1/us-vietnam-diplomatic-relations. https://www.canalys.com. http://asiaibuzz.com.

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J. Int. Eco. Glo. Gov. 2025, 2(1), 4-27 https://doi.org/10.12414/jiegg.250435 disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or 27products referred to in the content.

J. Int. Eco. Glo. Gov. Macao Scientifi Publishers（MOSP） https://www.mospbs.com/journal/jiegg 28·Article· China’s Solution to Resist the "Core-Periphery" Economic Cost Transferring: China’s Economic Diplomacy in the New Era Toward ASEAN Countries in the Financial Capitalist World System Zewen Yang1,* 1 Department of Diplomacy and Foreign Affairs Management, China Foreign Affairs University, Beijing, China * Corresponding Authors: Zewen Yang. Email: 838967571@qq.com Received: 12 November 2024 Accepted: 25 November 2024 Published: 25 February 2025 Abstract: In the contemporary world system of financial capitalism, the "core country", the United States, must transfer its economic cost to "peripheral countries" such as China and the ASEAN countries to maintain its own survival and development. The unequal economic relationship characterized by the economic cost transferring poses a threat to the stability and development of ASEAN countries, prompting them to seek cooperation with China to resist cost transfers from the core country. China's economic diplomacy towards ASEAN countries in the new era caters to the urgent needs of ASEAN countries. The role of China's economic diplomacy in helping ASEAN countries resist economic cost transferring is evident in two aspects: on one hand, infrastructure construction cooperation under the “Belt and Road” Initiative promotes the establishment of a regional, localized, and production relations of real economy, which is distinct from the production relations established by financial capitals from the core country, which is characterized by strong liquidity and oriented towards the interests of financial capitals; on the other hand, financial cooperation promoted between China and ASEAN countries, such as local currency trade, facilitates the construction of a new type of international production relation that is "non-dollarized," to avoid cyclical shocks from the dollar cycle. Thus, China's economic diplomacy towards ASEAN countries in the new era provides a Chinese solution for ASEAN countries to resist the "core-periphery" economic cost transferring and offers a solid economic foundation for the construction of a China-ASEAN community of a shared future. Keywords: World System Theory; Economic Cost Transferring; Economic Diplomacy; China; ASEAN

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 291. Introduction 1.1 Study Background Since the 1990s, as the former largest industrial capitalist country, the United States, completed its transition from real to virtual economic structure, the world system has also entered the era of financial capitalism from the era of industrial capitalism. In the world system of financial capitalism that is featured by the financial globalization, except for Singapore, the other ASEAN countries and China belong to the "peripheral countries" and are in the production relations dominated by the "core country", which is basically represented by the United States. In this production relations, ASEAN countries, along with China, jointly bear the economic cost transferring carried out by the core countries with its hegemony of the US dollar, which seriously affects economic development and social stability. Therefore, in the world system of financial capitalism, how to alleviate and resist the cost transferring in the process of financial globalization, and to build a China-ASEAN community with a shared future of "lasting peace, universal security, common prosperity, openness, inclusiveness, cleanliness and beauty" constitutes the practical question and core connotation that China must answer in its economic diplomacy toward ASEAN countries in the new era. To make it clear, the terms of “core country” and “peripheral country” are defined according to the World System Theory. In the competition of globalization, different countries are divided into three categories based on their division of labor in the world economy, namely “core” and “periphery”, and thus form the capitalist world system. The biggest difference between core and peripheral countries is that core refer to regions with high technological content, capital intensity, and high wage products; The periphery refers to countries with low technological content, labor-intensive, and low wage products. By such definition, ASEAN countries, the same as China, are located in the peripheral zone, while the United States and its allies are in the core zone. The relation between the core and the periphery is an unequal economic exchange relation in which the reason for the emergence and maintenance of the capitalist world system lies. In today`s financial capitalist world system, the unequal economic exchange relation lies in the cost transferring from the core to the periphery, which means ASEAN countries and China share the same need to resist together the "core-periphery" economic cost transferring, setting the stage for China`s economic diplomacy toward ASEAN countries to help resist the cost transferring. Here, by China`s economic diplomacy toward ASEAN countries, it refers to two aspects: one is the infrastructure cooperation under the “Belt and Road” initiative, the other is the financial cooperation in terms of settlement in local currency, with which ASEAN countries can resist the economic cost transferring from the the most representative core country, the United States which plays a primary role among the core countries in the financial capitalist world system. 1.2 Literature Review In general, the studies on China's economic diplomacy toward ASEAN countries in the new era mainly focuses on the "the Belt and Road" cooperation and free trade framework cooperation between

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 China and ASEAN countries. In the existing studies on the "the Belt and Road" cooperation between China and ASEAN countries, most scholars focus on the impact of China's infrastructure investments and related business in the "the Belt and Road" cooperation on the ASEAN countries` economy, but pay less attention to the role of the promotion of such cooperation in helping resist the transfer of economic costs. Zhai Kun, the Vice President of the Institute of Regional and Country Studies of Peking University, mentioned the role of China-ASEAN cooperation in the "the Belt and Road" in the contemporary capitalist world system in resisting the cost transfer by the United States in the article "The Joint Forces of the ‘Global South’ and Economic Globalization: Taking the China ASEAN Joint Construction of ‘the Belt and Road ’as an Example," but did not specifically discuss this in depth. The study on cooperation between China and ASEAN countries under the framework of free trade also focuses on the specific mechanisms and benefits of bilateral economic cooperation under frameworks such as the “China-ASEAN Free Trade Agreement” and the “Regional Comprehensive Partnership Agreement”, but neglects the important significance of the development of new production relations between China and ASEAN countries based on the real economy in the financial capitalist world system. Overall, both kinds of studies focus on mechanism and impact from specific policy perspectives. This study starts from the perspective of macro and abstract production relations, and intends to discuss the specific role of China's current economic diplomacy towards ASEAN countries in resisting the cost transfer of the US economy, as well as the important significance of this role in promoting the construction of the China-30ASEAN community with a shared future. 2. The Economic Cost Transferring from the Core to the Periphery in the Financial Capitalist World System Currently, the world system has turned into the stage of financial monopoly capitalism in which the core countries represented by the United States have to transfer their economic cost that comes from their domestic economic structures and modes of development, with the hegemony the United States holds in terms of the international institution and currency, posing increasingly sever pressure to ASEAN countries. And this has been the context of China`s economic diplomacy toward ASEAN countries. 2.1 The Motivation for Core Countries to Transfer Economic Costs to Peripheral Countries The motivation for economic cost transferring is rooted in the United States' own domestic economic structure dominated by the virtual economy and its development mode centered on debt economy. From the perspective of economic structure, the value-added of the tertiary industry with finance as the core in the United States has increased from 61.2% of its GDP in 1970 to 81.6% in 2023, while the value-added of the manufacturing industry in the United States has decreased from 35.2% of its GDP in 1970 to 10.2%, indicating a significant virtualization of economic structure. From the perspective of the mode of economic development, the proportion of U.S. public debt in GDP has soared

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 from 33% in 1980 to 121% in 2023, which means the development model of the United States relying on government debt to maintain economic stability has become too heavy to return. In order to maintain such a huge debt economy, the U.S. government must continue to adopt the method of "quantitative easing" to purchase additional debt with additional currency. On the whole, this development mode has caused two problems: first, the virtual economy is difficult to meet the needs of basic means of production and living of domestic society without commodity production; The second is the problem that the quantitative easing policy caused the excessive issuance of US dollar and then triggered domestic inflation. These two problems originated in the United States, but 31could not be solved at home. Therefore, the United States, the most representative core country, must promote the transfer of economic costs to the peripheral countries. 2.2 The Way by Which the Core Country Transfers Economic Cost to the Peripheral Countries There are two main ways for the core country, the United States, to promote the transfer of economic costs: first, relying on globalization with financialization as the core, the United States takes the advantage of the position of the main settlement and reserve currency in the global market of dollar currency to evacuate the domestic surplus dollar generated by quantitative easing policy to the international commodity market, pushing up the global prices of energy, raw materials and grain, causing imported inflation in marginal countries that buy these commodities in need; The second is that the United States utilizes the expansion and contraction cycle of US dollar supply to obtain huge benefits from "wool shearing". In general, the first mode is integrated into the second mode, and the two modes complement each other. In the dollar cycle, when the Federal Reserve issues a large number of additional dollars, while maintaining a low capital interest rate, financial capitals will leave the United States for peripheral countries to invest and acquire, occupy the economic lifeline industries of these countries, and obtain huge benefits from localized production; When the Federal Reserve ended printing additional US dollars and raised the capital interest rate, global financial capitals, along with the proceeds from portable investment, returned to the United States. In this process, on the one hand, the proceeds of foreign investment in peripheral countries do not stay in the local countries, which makes it difficult for peripheral countries to make real capital accumulation, and the only thing left is labor-capital contradiction; On the other hand, the massive flow of foreign capital from peripheral countries to the United States will cause turbulence in the markets of these countries, including currency devaluation, economic slowdown and even recession. Thus, the United States is able to meet domestic demand by purchasing cheap goods made in other countries in the world market, while maintaining low domestic inflation. It should be pointed out that this economic cost transfer is aimed at seizing the interests of financial capitals as the core purpose, takes financial means as the main way, and relies on the international monetary and financial system monopolized by the core country, targeted at the peripheral countries

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 exporting raw materials and manufacturing products. Therefore, ASEAN countries, which mainly export raw materials and low-end manufacturing goods, naturally become the main bearers of the 32economic cost transfer from the United States. 3. The Affects of the Economic Cost Transferring from the United States on the ASEAN Countries The transfer of economic cost from the core countries, basically from the United States, to ASEAN countries have mainly caused the following impacts: first, the use of US dollars as the settlement currency for import and export trade has led to ASEAN countries` facing long-term inflationary pressure; Second, the cyclical contraction of the US dollar has impacted on the exchange rate of ASEAN countries' sovereign currencies and economic stability; Third, the inflated value of the US dollar has aggravated the exploitation of ASEAN countries through goods trade; Fourth, financial capitals occupy the land and resources of ASEAN countries, endangering their ecology and food security. 3.1 The Use of US Dollar as Settlement Currency Leads to Long-term Inflationary Pressure in Some ASEAN Countries As mentioned above, the United States has injected a large amount of excess US dollars generated by "quantitative easing" into the international trade market in the form of investment, pushing up the prices of grain, energy, raw materials and other commodities in US dollars, which makes the countries that have to buy such commodities in US dollars face higher production and living costs. The essence of this process is that the United States allocates the inflation caused by the excess US dollars in its own country to other countries. In terms of energy, for example, due to the above mechanism, there is a strong positive correlation between international oil prices and US dollar inflation. All ASEAN countries need to import a huge amount of fossil fuels such as oil. In 2021, the import of fossil fuels, mineral oils and their distillation products alone cost ASEAN countries a total of 212676.6 million dollars, ranking second in the category of ASEAN countries' imports from the world, which means that ASEAN countries have largely undertaken the inflation caused by US dollar by using US dollars to import fuels such as oil. The same is true in other respects. 3.2 The Cyclical Contraction of US Dollar Poses Impact on the Exchange Rate and Economy of ASEAN Countries When the Federal Reserve raises interest rates on the US dollar, the dollar cycle enters a contraction stage. The most significant impact on ASEAN countries occurred during the 1994-2000 US dollar contraction stage. Starting from February 1994 when the Federal Reserve announced an interest rate hike, and ending in January 2001 when the Federal Reserve announced a rate cut, the US interest rate first increased from 3% to 6%, and then remained at a high level of around 5%. This led to a massive repatriation of foreign capital from ASEAN countries to the United States, triggering the Asian financial crisis. During this period, the Indonesian Rupiah's exchange rate plummeted from 2,248.6 in 1995 to 10,013.6 in 1998, dropped by 345.3%, as its GDP annual growth rate also plummeted from 8.2% in 1995 to -13.1% in 1998; the Malaysian Ringgit's exchange rate fell from 2.5 in 1995 to 3.9 in 1998, decreased by 56%, and its GDP annual growth rate fell from 9.8% to -7.4%; the Vietnamese Dong's

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 exchange rate dropped from 11,038.2 in 1995 to 13,268.0 in 1998, declined by 20.2%, and its GDP annual growth rate slowed from 9.5% to 4.7%. The situations in other ASEAN countries are similar. Although most ASEAN countries changed their exchange rate systems after the Asian financial crisis, the impact caused by the dollar cycle remains difficult to completely avoid: In the latest dollar contraction cycle that began in March 2022, taking Indonesia as an example, the Rupiah exchange rate fell from 14,308.1 at the end of 2021 to 15,236.9 at the end of 2023, a drop of 6.1%, breaking the 33previously stable state around 14,300 for years, and its GDP growth rate also declined simultaneously. 3.3 The Appreciation of the US Dollar Intensifies the Exploitation of Surplus Value in ASEAN Countries Due to the impact of the dollar contraction, the sovereign currencies of ASEAN countries have been continuously depreciating against the US dollar. As a result of the long-term depreciation of ASEAN countries' sovereign currencies, the United States has been able to take advantage of the significant appreciation of the dollar to purchase inexpensive agricultural and forestry products as well as manufactured goods from ASEAN countries in large quantities over the long term. This means that the United States has been heavily exploiting and appropriating the surplus value of labor of ASEAN countries' peoples in the commodities. The degree of this "money-commodity" exploitation has spiraled upwards with the cyclical increase in the value of the dollar: After the US economy largely completed its transition from tangible to intangible assets in the 1990s, during the three periods of dollar interest rate hikes in 1994-2000, 2004-2006, and 2015-2018, the surplus value rate of the US private sector reached peak levels, even approaching 30% at one point, as shown in Chart 1. Consequently, the exploitation in commodity trade will increasingly intensify along with the development of economic relations between the United States and the ASEAN countries, exacerbating the domestic social labor-capital contradictions in the ASEAN peripheral countries and posing challenges to their domestic social stability. Chart 1: Profit Rate and Surplus Value Rate in the U.S. Private Sector (1947-2021)

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 Source: Xie, F., Wang, H., Yao, X. (2024), Capital Turnover and Profit Margin Dynamics34—Analysis Based on the U.S. Economy from 1947 to 2021. Contemporary Economic Research, (10), 25. 3.4 Financial Capitals` Encroachment on ASEAN Countries' Land and Natural Resources Endangers Their National Security When the dollar cycle enters an inflationary phase, financial capitals from core countries, led by the United States, acquires and appropriates natural resources such as minerals and forest lands of peripheral countries through investment, supplying raw materials at extremely low costs for domestic industries. Among periphery countries, the situation where ASEAN countries' natural resources are encircled by financial capitals is particularly pronounced. Taking the palm oil industry as an example, the world's major palm oil exporting countries are Malaysia, Indonesia, and Nigeria. Since 2005, Indonesia has surpassed Malaysia to become the world's largest palm oil producer. However, Indonesia's large-scale production and export of palm oil cannot be achieved without the promotion of financial capitals: a significant amount of land in Indonesia has been directly appropriated by transnational capital. By 2010, 3,636,437 hectares, or 1.6% of the national area, of Indonesian land had been acquired and occupied by Western countries' transnational capital for the cultivation of palm trees. Moreover, under the impetus of foreign investment demand, 17.56% of Indonesia's forest area has been deforested, mainly for the cultivation of palm trees. Similar situations also occur in Malaysia and the Philippines. Among these, the situation in the Philippines is the most severe. By 2012, the area of land acquired by foreign capital had reached 5.171 million hectares, accounting for 17.24% of the country's land area and 49.48% of its arable land. As a result, the transnational appropriation of ASEAN countries' natural resources by financial capitals has directly caused damage to their ecological environment and poses a serious threat to their food security. Thus, in the world system of financial capitalism, the economic cost transferring from the core countries, represented by the United States, has imposed increasingly severe pressure on ASEAN countries, and the demand from ASEAN countries to resist the economic cost transferring has become increasingly urgent. 4. The Effects of China's Economic Diplomacy in Helping ASEAN Countries Resist the Cost Transfer of the "Core-Periphery" Economic Cost Transferring Since 2012, under the guidance of Xi Jinping Thought on Diplomacy, China's diplomacy has entered a new era, with the promotion of building a community with a shared future for mankind becoming the most distinctive banner of China's diplomacy in this new era. Among these, the China-ASEAN community of shared future is an important part of building a community with a shared future for mankind, and China's economic diplomacy towards ASEAN countries in the new era is a core measure to promote the building of the China-ASEAN community of shared future. Therefore, the mission of China's economic diplomacy towards ASEAN countries in the new era is to be "in prosperity

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 and decline together, in safety and danger together, in the same boat", which will inevitably provide assistance to ASEAN countries in resisting the "core-periphery" economic cost transferring within the 35financial capitalist world system. Fundamentally, the effects of China's economic diplomacy in helping ASEAN countries resist the economic cost transferring lies in promoting the establishment of a new type of production relations characterized by "mutual benefit, and win-win cooperation 4.1 New Localized Production Relations Built Through Infrastructure Construction Cooperation Chart 2: Contract Value of New Overseas Construction Projects Signed by Chinese Enterprises in ASEAN Countries Source: Ministry of Commerce of the People`s Republic of China, http://yzs.mofcom.gov.cn/ yzjmhz/sbhzjk/index.html. Through cooperation under the "Belt and Road" initiative, China has engaged in a significant amount of infrastructure construction cooperation with ASEAN countries. As shown in Chart 2, from 2013 to 2021, the value of new contracts signed by Chinese enterprises for foreign construction projects in ASEAN countries increased from $24.2 billion to $60.6 billion, a growth of 150%. In terms of contract completion value, Indonesia is ranked 2nd and Malaysia is ranked 5th, among China's top ten markets for construction contracts. The types of these infrastructure collaborations span various aspects, including high-speed railways, highways, bridges, as well as communications and energy. This signifies that China has established a localized production relations in these ASEAN countries through infrastructure construction. From the perspective of the role attributes of producers within the production relations, the main entities engaging in infrastructure construction and investment in ASEAN countries are Chinese state-owned enterprises. The foundation for Chinese enterprises to participate in investment and undertake local infrastructure projects is the "Belt and Road" initiative promoted by the Chinese government. This

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 means that the projects undertaken by Chinese enterprises are essentially government projects guaranteed by China`s state credit. Therefore, the infrastructure construction carried out by these Chinese state-owned enterprises in the region inherently carries a political mission, rather than being solely aimed at pursuing capital profits. When undertaking projects in ASEAN countries, Chinese enterprises offer more reasonable bids, and exercise stricter control over subsequent construction schedules and additional costs, in order to fulfill the political responsibilities of the "Belt and Road" 36projects. Fundamentally, the primary attribute of Chinese state-owned enterprises taking the lead in contracting projects in ASEAN countries, guided by "political responsibility", means that Chinese companies must comprehensively consider the economic conditions of ASEAN countries, the natural and human environment of local construction, and provide the most suitable localized construction plans to minimize political frictions with the contracting countries or opportunities for Western medias to seize on contradictions for international public opinion hype. The "Belt and Road" projects must reach the height of China's "political business card" for economic diplomacy towards ASEAN countries. This greatly differentiates China's economic diplomacy towards ASEAN countries from that of the core Western countries. From the perspective of the means of production and the distribution of products in the production relations, the means of production used by Chinese enterprises and the final products in infrastructure construction projects are localized. During the infrastructure construction process of the "Belt and Road" projects, the construction capital used by Chinese enterprises as contractors is provided by the government of the contracting country. What’s more, the equipment, materials, and other constant capital, as well as the labor value of construction workers, which are the variable capital part used in the construction, are all provided by local countries as well. Taking the China-Laos Kunming-Vientiane Railway as an example, during the construction of the railway, Chinese enterprises spent over 3.6 billion yuan on materials such as sand, ballast, and cement within Laos, directly driving local employment for more than 32,000 person-times. Moreover, by implementing the project, they helped villagers along the route to renovate and build new roads and water channels, upgrade housing, and lay water pipes, effectively improving the local infrastructure conditions. Therefore, the means of production used by Chinese enterprises are localized. On the other hand, from the perspective of product distribution, the final products "produced" by Chinese enterprises are public infrastructure, which are of no liquidity but fixed in location, concrete in form, and difficult to directly generate capital returns. This characteristic means that the "products" such as bridges, highways, or high-speed railways "produced" by Chinese enterprises can only remain in the local countries, and it also means that the indirect capital returns generated by promoting the flow of various local economic means of production will also remain in the local areas. Thus, the final product distribution is also localized. Localized production relations help ASEAN countries resist the transfer of economic costs from core countries, and the key lies in the non-capital-oriented localization characteristics. Chinese state-

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 owned enterprises, whose primary mission is "political responsibility", differ from the private sector enterprises of core countries driven by "capital profit". The private capitals of core countries, represented by the United States, invest in industries that are of high liquidity such as finance and insurance, and subcontracting manufacturing factories in ASEAN countries. In contrast, China's economic diplomacy towards ASEAN countries focuses on infrastructure construction under the "Belt and Road" initiative. Taking 2021 as an example, the United States' foreign direct investment (FDI) into ASEAN countries amounted to 28.34 billion dollars in finance and insurance, accounting for 70.8% of the total FDI from the U.S. in ASEAN countries. The production relations established by the private capitals of core countries are centered on profit-making, with land acquisition, investment, and factory construction as the main means. It is obvious that the private capitals of core countries do not care about the economic and social development needs of ASEAN countries, nor do they care about the survival and development needs of the people in these countries, and are even less willing to invest in or undertake infrastructure projects with low returns and difficult to freely circulate for cost recovery. Whenever the Federal Reserve enters a rate-hiking cycle, financial capitals in the ASEAN countries' markets flows back to the United States with both principal and interest, leaving no localized benefits or means of production for ongoing production. All that remains are the labor-capital conflicts and human-land conflicts caused by the cheap occupation of local labor and environmental resources, ultimately leading to economic shocks in ASEAN countries. In contrast, China's economic diplomacy in ASEAN countries focuses on infrastructure construction, leaving both the means of production and product distribution in the local area. Taking the Jakarta-Bandung High-Speed Railway (referred to as the Jakarta-Bandung Railway) built by China as an example, from its opening of construction in September 2023 to the end of September 2024, the cumulative passenger volume of the Jakarta-Bandung Railway exceeded 5.4 million, enhancing the level of interconnectivity between people and the economy in different regions of Indonesia. The role of the Malaysia East Coast Railway project currently under construction is similar. These infrastructures generate long-term benefits in communicating local economic and social factors, and these benefits are ultimately owned by the people of ASEAN countries, not repatriated to China. Therefore, such localized production relations address the urgent needs of economic and social development in ASEAN countries, thereby alleviating the contradictions caused by 37the economic cost transferring from core countries. 4.2 New Regional Production Relations Built through the Connectivity of Infrastructure Cooperation From the perspective of the level and geographical scope of production relations, the infrastructure projects undertaken by Chinese enterprises involve strategic-level transportation line construction, which has promoted the establishment of a new type of regionalized production relations. The essence of China's "Belt and Road" initiative places "policy coordination" at the forefront, with "infrastructure connectivity" as the priority. At the strategic level of economic policy, through the "Belt and Road" initiative, China's economic diplomacy actively aligns with Vietnam's "Two Corridors and One Circle"

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 concept, Cambodia's "Rectangular Strategy", Indonesia's "Global Maritime Fulcrum" concept, and other economic strategies. The specific measures to build regionalized production relations that connect the economies of various countries first involve constructing a railway and highway network that connects China with the ASEAN countries. These railway and highway projects not only connect the different regions within ASEAN countries with the flow of people, means of production, and goods, but also facilitate flows between different countries, expanding the production relations of each country from a smaller geographical scope to a broader one. Taking the China-Laos International Railway as an example, in the first three quarters of 2024, the railway sent over 177.0 thousand passengers across borders and transported goods with a volume of 13.8 billion yuan, with year-on-year increases of 175.6% and 50.5%, respectively. The sources of passengers reached 101 countries and regions, and cross-border freight has already radiated to 19 countries including Laos and Thailand. In other words, the China-Laos Railway not only connects the flow of people, means of production, and goods between China and Laos, but also links other ASEAN countries such as Thailand, with fruits from Thailand being transported into China's Yunnan province via the China-Laos Railway. Thus, through the connectivity of infrastructure, a kind of regional, more macroscopic production relations has been established within Southeast Asia and even in a broader Asian region. The regionalized production relations are based on infrastructures of transnational transportation, with the goods trade of real economy led by industrial capital as its connotation, and the flow of production factors within a vast geographical scope of East 38and Southeast Asia as its core. The key to how the regionalized production relations help ASEAN countries resist the economic cost transferring from core countries lies in the effect to promote the development of regionalized real economy. For most Southeast Asian peripheral countries, the main economic entities are real economy, and the goods exported are mainly agricultural, forestry, and water products, as well as manufactured products. Real economy differs from virtual economy, as it is greatly affected by the costs of the flow of production means and product transportation. Therefore, before the "Belt and Road" initiative was proposed by China, the foreign trade of ASEAN countries largely depended on exporting goods to core countries such as the United States through ocean carriage. However, the markets of core countries are limited, and their domestic demand shrinks with the outbreak of cyclical crises, thus the driving force for the development of the real economy in ASEAN countries is insufficient and unstable. Small countries that rely on the export of resources and agricultural products that play vital roles as their main source of foreign exchange are more susceptible to market fluctuations. With the advancement of the "Belt and Road" initiative and the establishment of new regionalized production relations, ASEAN countries have been able to engage in the import and export trade of production means and products from the Pan-Asian region through connected infrastructure, leading to a significant development in trade between China and ASEAN countries: in 2014, the trade volume of goods between China and ASEAN countries was only 366.71 billion dollars, but by 2022, this figure reached 722.10 billion dollars; and the trade volume of goods among ASEAN countries also grew from around 600.0 billion dollars in

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 2014 to 856.47 billion dollars in 2022. Especially since 2020, when some large-scale infrastructure projects under the "Belt and Road" initiative have been completed one after another, the trade of goods within the ASEAN region has broken the long-standing situation of no development and even decline, with the annual growth rate of trade in goods among ASEAN countries reaching 25.5% in 2021. And this figure remained at a high level of 16.9% in 2022. It must be noted that the growth occurred during the pandemic when the economies of core countries faced severe crises and reduced imports. On the one hand, the tremendous development of commodity trade has driven the development of the real economy within ASEAN countries, and on the other hand, it has enhanced the balance and stability of the economies of ASEAN countries, reducing their dependence on exports to core countries. As a result, when the US dollar cycle enters a contraction phase, ASEAN countries are able to maintain the stability of their domestic eco39nomies through regionalized real economy production relations. 4.3 The International Production Relations with Settlement in Local Currency In addition to infrastructure projects under the Belt and Road Initiative, financial cooperation such as trade settlement in local currencies with ASEAN countries has also been a focal point of China's economic diplomacy towards the ASEAN periphery countries since the new era. From the perspective of the settlement method of production relations, China and ASEAN countries have jointly promoted bilateral trade in local currencies, driving the establishment of a new type of international production relations that are non-dollarized. With the continuous impact of the dollar cycle leading to the depreciation of the sovereign currencies of ASEAN countries, the impact of bearing the economic cost transferring from using the US dollar in international trade of commodity has become increasingly severe. Therefore, as ASEAN countries have been accelerating economic development and expanding foreign trade, they increasingly need to establish a new type of international trade production relations that do not rely on US dollar settlements. Both China and ASEAN countries share a common need as they both bear the cost transferring of dollar settlements in international trade. It is under this need that both sides began to explore financial cooperation in bilateral trade, such as local currency settlements: in September 2020, China and Indonesia signed a memorandum of understanding on the cooperation of settlement in local currency, and officially launched the bilateral local currency settlement cooperation framework in September 2021; in September 2016, the signing of the "China-Vietnam Border Trade Agreement" greatly promoted the cooperation of local currency settlements in border trade between China and Vietnam, and in August 2024, both sides further signed the "Memorandum of Understanding on Cooperation between the People's Bank of China and the State Bank of Vietnam" to "further promote cooperation in fields of interconnectivity, such as local currency settlements, local currency swaps, and cross-border payment "; in May 2024, China and Thailand signed the "Memorandum of Understanding on Promoting Bilateral Local Currency Transaction Cooperation Framework between the People's Bank of China and the Bank of Thailand"; in addition, China has reached agreements on local currency settlement cooperation in border trade with Myanmar, Cambodia, Laos, while Malaysia is actively promoting local currency trade settlement cooperation with China.

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 The key to helping ASEAN countries resist the economic cost transferring from core countries by promoting the settlement of trade in local currency lies in its avoidance of financial hegemony within the financial monopoly capitalist production relations. As mentioned above, in the financial capitalist world system, the kernel of the "core-periphery" unequal production relations is precisely financial hegemony. Therefore, non-dollarized settlement methods, such as local currency settlement, not only signify the respective avoidance by China and ASEAN countries of inflation caused by the overissuance of the US dollar, but also represent a joint resistance and consensus against the unequal production relations of the financial capitalist world system. When China and ASEAN countries engage in bilateral trade or investment, on the one hand, settlement in local currency can help reduce the inflationary pressure caused by the need to hedge against US dollar and issue more of their own currencies due to the receipt of US dollars. On the other hand, settlement in local currency can promote the reserves of the RMB and ASEAN countries' currencies in each other's banks, thereby improving both parties' structure of foreign exchange reserves and reducing the impact of dollar outflows as the Federal Reserve raises the interest rate, especially with the RMB playing a more prominent role as a "safe-haven currency." Moreover, trading with local currency will significantly increase the reserves of each other's sovereign currencies by both countries. Unlike holding reserves in US dollars, ASEAN countries and China can use the reserves of each other's currencies for trade of commodity, thereby avoiding the price impacts caused by fluctuations in the US dollar in the international market. As the world's largest manufacturing country and the most active trading region of commodity, China and ASEAN countries can largely meet each other's domestic needs for production and living materials through the way, thus avoiding social unrest caused by cyclical fluctuations in the US dollar. Additionally, China has signed local currency swap agreements with some ASEAN countries, such as Malaysia, to strengthen the stability of exchange rates of both countries' sovereign currencies and better resist the impact of the US 40dollar cycle. 5. Insights on Further Promoting Economic Diplomacy Between China and ASEAN Countries The economic diplomacy of China towards ASEAN countries in the new era has been remarkably effective, laying a solid economic foundation and direction for building a China-ASEAN community with a shared future, and providing valuable experience and insights for further deepening China's economic diplomacy with ASEAN countries. Specifically, these insights mainly lie in the following aspects: Firstly, China's economic diplomacy towards ASEAN countries should not only consider the domestic construction needs of each ASEAN country but also the position of ASEAN countries within the global production relations. It must be pointed out that it is precisely because China and ASEAN countries are both on the periphery of the financial capitalist world system and bear the harm of unequal economic relations together, that China can accurately perceive and grasp the common needs of ASEAN countries, thereby promoting and guiding the rapid development of relations between China and

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 ASEAN countries. The development of this political relations is fundamentally based on the development of "non-core-periphery" economic relations. Therefore, advancing China's economic diplomacy towards ASEAN countries must necessarily focus on developing "mutually beneficial and win-win" production relations, necessarily requiring a departure from the unequal production relations 41constructed by core countries represented by the United States. Secondly, China's economic diplomacy towards ASEAN countries in the new era is centered on establishing a "mutually beneficial" mode of production and plays a role of "sharing weal and woe," rather than being aimed against the United States. The most fundamental starting point of China's economic diplomacy towards ASEAN countries is and can only be the economic needs of both China and the ASEAN countries, not any geopolitical "zero-sum game." In other words, China's diplomacy towards ASEAN countries should be constructive and inclusive, not exclusive. Helping ASEAN countries to safeguard their own interests does not mean standing against the United States itself, but against unequal production relations in the world system. The core support for the tremendous development in relations between China and ASEAN countries lies in the maintenance and development of a production relations centered on "mutual benefit and win-win." Therefore, China's economic diplomacy towards ASEAN countries should aim to maintain and promote the development of the new production relations. Thirdly, in terms of helping ASEAN countries resist the transfer of economic costs, there is still room for China's economic diplomacy to expand its approach. In the financial capitalist world system, the key to "core-periphery" cost transferring lies in currency. Therefore, for peripheral countries, the fundamental way to avoid economic cost transferring is to minimize the use of the core country's sovereign currency as much as possible. Specifically, for ASEAN countries, in addition to local currency swap agreements and local currency settlements, barter trade is also an economic cooperation method that reduces inflationary pressure from the US dollar and maintains stable prices for goods on both sides. This method can mainly be carried out on a certain scale by both governments in key commodities related to people's livelihoods, to help ASEAN countries maintain domestic social stability when faced with imported inflation crises. It should be noted that this approach is difficult to carry out on a large scale under market conditions, and it is difficult to reflect changes in market supply and demand, let alone create capital profits through it. Therefore, the mainstays that lead the development of barter trade cooperation can only be the governments of both sides. However, precisely because of this, the significance of this approach in helping ASEAN countries resist economic cost transferring is even greater, and its political nature stronger. Therefore, economic diplomacy carried out through various approaches such as barter trade can more deeply promote the development of political relations between China and ASEAN countries. Thus, within the world system of financial capitalism, China's economic diplomacy towards ASEAN countries truly meets the needs of ASEAN countries to develop their own economies and better helps ASEAN countries to resist the transfer of economic costs. Only in this way can the “China-

J. Int. Eco. Glo. Gov. 2025, 2(1), 28-44 https://doi.org/10.12414/jiegg.250436 ASEAN Community of a Shared Future” be truly worthy of its name and provide a model for the 42construction of a broader Community of a Shared Future for Mankind. 6. Conclusion In the world system of financial capitalism, core countries represented by the United States must rely on the hegemony of the US dollar and use the dollar cycle as a means to transfer their economic cost to peripheral countries in order to address issues arising from their domestic economic structures that have shifted away from the real economy towards a debt-driven economy. ASEAN countries, which primarily export raw materials and mid-to-low-end manufactured goods, have naturally become the main recipients of the economic cost transferring from the core country, increasingly affected by the unequal production relations. Consequently, ASEAN countries and China have a shared need to resist the economic cost transferring imposed by core countries. China's economic diplomacy toward ASEAN countries in the new era helps these countries resist the economic cost transferring by establishing fundamentally different new types of production relations from the ones constructed by the core countries. On one hand, cooperation in infrastructure construction under the “Belt and Road” Initiative promotes the establishment of a regional, localized production relations of real economy, which is distinct from financial capital interest-oriented production relations established by speculative capital from core countries. On the other hand, financial cooperation such as trade settled in local currency between China and ASEAN countries fosters a new type of international production relations that is "non-dollarized," to avoid cyclical shocks from the dollar cycle. Through economic diplomacy toward ASEAN countries, China not only shares the opportunities of its own development, but also alleviates the pressure of cost transferring in the financial capitalist world system. It is precisely on the economic foundation of seeking mutual benefit through cooperation, sharing hardships through cooperation that the superstructure of building a China-ASEAN Community of Shared Future can be solidly advanced. Acknowledgement None. Funding Statement None. Author Contributions The author confirms sole responsibility for the following: study conception and design, data collection, analysis and interpretation of results, and manuscript preparation. Availability of Data and Materials The data and materials on which the study is based were accessed from a repository and are available for downloading through the following link.

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J. Int. Eco. Glo. Gov. Macao Scientifi Publishers（MOSP） https://www.mospbs.com/journal/jiegg45·Article· Interpreting the Global Digital Compact: Charting a New Vision Towards a Multi-Stakeholder Governance Model Qifan Jiang1, Yuhang Ma2* 1 Leiden Law School, Leiden University, Leiden, The Netherlands; School of International Law, East China University of Political Science and Law, Shanghai, China 2 Leiden Law School, Leiden University, Leiden, The Netherlands * Corresponding Authors: Yuhang Ma. Email: mayuhang0308@163.com Received: 9 November 2024 Accepted: 29 November 2024 Published: 25 February 2025 Abstract: The “Global Digital Compact” (GDC) published by the United Nations highlights that “multi-stakeholder” actors are the implementers of this compact, serving as a breakthrough for interpreting it. The multi-stakeholder governance model can effectively regulate the Internet; however, the roles played by various stakeholders differ significantly in practice, with governments and enterprises often dominating Internet governance while civil society remains in a disadvantaged position. The stakeholders referenced in GDC are not limited to governments and enterprises; civil society emerges as a third core stakeholder in the digital age, with its interests articulated as fundamental values of digital human rights. Based on this value order, the implementation of the multi-stakeholder governance model in GDC can be reflected in both horizontal and vertical interactions between the other two stakeholders: horizontal interactions aim to establish an international digital cooperation framework among governments through treaties and agreements, bridging the international digital divide between developed and developing countries, forming international standards for artificial intelligence governance, and promoting the sharing of technology and knowledge; vertical interactions aim to create a meta-regulatory relationship between governments and enterprises, achieving interaction and coordination between self-regulation and government regulation through risk assessment mechanisms and diverse accountability mechanisms. Keywords: Global Digital Compact; Multi-Stakeholders; Digital Human Rights; Global Governance 1. Introduction “It was the best of times, it was the worst of times.” There is no doubt that digital technology is changing society and people’s lifestyles in both breadth and depth, but while it has brought rapid development opportunities to the world, it has also created many problems. For example, there are a series of challenges such as privacy and personal information protection issues at the individual level,

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 digital platform monopolies and the problem of big data raising prices for frequent users at the corporate level, and automated decision-making and the digital divide at the national level. Under the backdrop of the digital age, the UN Secretary-General’s report Our Common Agenda released in September 2021 proposed that an agreement on GDC be reached at the Future Summit to be held in 2023 (now postponed 46to 2024), with a view to building an open, free and secure digital future for all people in the world. From the perspective of international law, the legal influence of GDC is currently unclear. To be more specific, the Compact has not come into force under international law, but merely an initiative document issued by the United Nations to promote international digital governance. However, despite its lack of effectiveness, it does not deny the forward-looking role of the document in future global digital regulation and governance. In particular, by influencing national legislation and international treaty negotiations, its pioneering and inspiring framework for promoting global digital governance will indirectly have an impact on future global digital governance. GDC seeks to address fragmented digital governance and foster cooperation across various entities, establishing “multi-stakeholders”—Member States and Stakeholders (including digital platforms, private sectors, alliances, and civil society organizations)—as the core actors. This model builds on the multi-stakeholder governance concept introduced at the 2003 World Summit on the Information Society, which emphasized decentralization and inclusivity. By encouraging a collaborative approach among governments, private sectors, and civil society, the GDC envisions an “open, free, secure, and people-oriented” digital future. Achieving this vision, however, depends on recognizing civil society’s vital role within global digital governance, beyond mere symbolic inclusion, to ensure a robust, interactive framework for digital governance in the modern era. 2. Literature Review GDC aims to address the fragmented landscape of digital governance by promoting a multi-stakeholder approach that includes governments, private sectors, and civil society. The GDC emphasizes cooperation among these groups, with member states primarily responsible for implementation, supported by stakeholders such as digital platforms, private entities, and civil organizations. This shift away from centralized governance models seeks to decentralize and democratize digital governance, enabling a more participatory framework that integrates diverse voices. The concept of multi-stakeholder governance in digital policy was first formalized in the 2003 World Summit on the Information Society (WSIS) Geneva Plan of Action. The Tunis Agenda of 2005 further established this approach by defining distinct roles for governments, the private sector, and civil society. Over time, the model has evolved to challenge the U.S.-centric governance of the Internet, especially after the 2013 Snowden revelations, which intensified calls for ICANN’s transition to a multi-stakeholder model. In response, the U.S. Department of Commerce began a phased relinquishment of its control, underscoring the importance of shared governance. This shift marked a significant step toward a globally inclusive Internet governance system.

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 The GDC reinforces the significance of a multi-stakeholder approach, recognizing that achieving an open, secure, and inclusive digital future necessitates balancing power among entities and empowering civil society as a full partner in governance. Existing literature critiques the dominance of governments and businesses in regulatory roles, often marginalizing civil society’s input. GDC’s framework, therefore, represents an opportunity to reimagine digital governance by embedding civil society’s role more centrally, advocating for digital human rights and collaborative policymaking that 47aligns with the needs of all stakeholders. 3. The Transmutation of Civil Society in the History of Internet Governance As shown earlier, civil society stands merely no position in the “multi-stakeholder” governance model, which has largely prevented the “multi-stakeholder” governance model from achieving its purpose in global digital governance. In fact, there has been a process of transmutation in the role of civil society in Internet governance. The logic of civil society’s decline in the multi-stakeholder model can only be understood in the context of historical evolution. Overall, since the born of Internet, it has gone through three stages: the period of “civil society autonomy”, the period of “cyber sovereignty” of countries with the United States at the core, and the period of global governance represented by “multi-stakeholder”. 3.1 Civil Society Autonomy: Utopia in Cyberspace The ARPANET, the Internet’s precursor, emerged during the Cold War era of the 1960s and 1970s. The U.S. Defense Advanced Research Projects Agency funded its development to secure military communication systems against potential Soviet attacks. Initially, ARPANET management was handled by several organizations: the Internet Configuration Control Board (ICCB) in 1979, followed by the Internet Advisory Board (IAB) in 1983, the Internet Activities Board (also IAB) in 1986, and the Internet Engineering Task Force (IETF). The IETF remained the primary body overseeing Internet governance until 1998. The IETF is neither a government agency nor an international organization. It is merely a loosely organized group of engineers dedicated to Internet technology. These engineers mostly hold a political orientation of the New Left, which rejects government regulation and advocates independence and freedom. Their core belief in terms of Internet governance is that cyberspace should be independent from government and corporate intervention, so as to realize the free nature of the Internet. Obviously, this view implies that the Internet is not only the object of governance, but also the subject of governance. That is, civil society on the Internet can achieve self-government without the supervision and intervention of governments and businesses. It can be seen that the concept of “civil society autonomy” originated from the trend of freedom supreme at the birth of the Internet. The concept of “civil society autonomy” reached a milestone in 1996. In that year, John P. Barlow, known as the “Jefferson of Cyberspace”, issued “A Declaration of Independence of Cyberspace” at the Davos Forum in Switzerland and Proclaiming that cyberspace should be free from government control and should be autonomous. “A Declaration of Independence of Cyberspace” separates civil society on the Internet from the physical world, arguing that the former has its own culture, ethics and laws, and can achieve self-governance without the intervention of power from the physical world, thus codifying the concept of “civil society autonomy”.

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 The concept of “civil society autonomy” represented by A Declaration of Independence in Cyberspace was also supported by the US judiciary at the time. In the case American Civil Liberties Union v. Reno (hereinafter referred to as the “Reno” case), a group of engineers represented by Barlow appealed to the Supreme Court to protest against the Communications Decency Act enacted by the US Congress in 1996. This law was the first attempt by the US government to regulate the Internet through legislation, and some of its provisions prohibit users from disseminating obscene information or materials to minors via the Internet, otherwise the disseminator may bear criminal liability. Barlow and others believed that the Communications Decency Act would lead to government suppression of freedom of speech in cyberspace and violate the independence of cyberspace. The US Supreme Court ultimately sentenced that the Communications Decency Act was invalid because it violated the “freedom of speech” of the First Amendment to the US Constitution, supporting the Internet as a democratic forum free from government regulation. In her concurrence, Justice O’Connor evoked the “masquerade” image that was very popular on the early Internet: on the Internet, no one knows you’re 48a dog. The Reno case legally confirmed the validity of the Declaration of Independence of Cyberspace and, to some extent, supported the idea of “civil society autonomy”. At that time, the mighty “electronic American revolution” seemed to have succeeded. 3.2 Civil Society and Cyber Sovereignty: Autonomy and Heteronomy As mentioned above, although the Internet’s “civil society autonomy” has initially been recognized by the US government, the Internet has been closely related to politics since its inception (the Cold War between the United States and the Soviet Union). Therefore, as American constitutional scholar Sunstein said, “despite many people’s claims that the Internet has been or should be free from government control, virtual space is no different from physical space. Regulation and the power of the government are still omnipresent.” Before 1998, the IETF, composed of engineers, dominated the management of the Internet. However, in the late 1980s, the US Department of Defense privatized the Internet domain name system through bidding, thus sharing control and management of domain names. It can be seen that although the United States has always maintained that the Internet does not belong to any single country, the US government has long held the notion of cyber sovereignty and has implemented governance measures on the Internet through various direct or indirect means. “Civil society autonomy” has become an ideal utopia (the ideal of autonomy), while the Internet is still under the control of national sovereignty (the reality of heteronomy). Facing the control of internet sovereignty, the internet civil society group actively carrying out autonomous practices to resist. In the 1990s, with the commercialization of the internet, the regulation of internet market order (such as domain name registration) became even more important. The Internet Association is an autonomous institution representing the Internet community. At the same time, there has been a movement in society for “civil society autonomy”. There is even a so-called “the Internet Constitution” in the private sector. Its preamble is based on the wording of the preamble to the US Constitution, and begins: “We, the people of the Internet community, in order to promote better collaboration between the various networks of the Internet, maintain a harmonious relationship between the networks, and ensure that all networks participating in the Internet can enjoy freedom and happiness, hereby enact and establish this constitution....”1 ISOC’s efforts represent the practice of self-

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 government by the Internet civil society. However, the US government does not agree with the so-called self-government of the Internet community without a doubt, and has continuously made its clear position on maintaining control of the Internet clear through interviews with key ISOC figures.32 The violent conflict between civil society and network sovereignty came to an end with the submission of the Internet Society to the will of the US government, which ultimately established its comprehensive control o49ver the Internet. In 1998, a global organization called the Internet Corporation for Assigned Names and Numbers (ICANN) was formally established, comprising groups such as URL registration authorities, contact groups, academics, and representatives of interest groups. Under public pressure against the “American-centric” model of Internet governance, the US government announced in a white paper, which was released the same year, to would hand over the right to govern the Internet to ICANN. Thus, ICANN’s “networked governance model” is activated. ICANN’s greatest feature is “multi-party participation.” That is, ICANN’s policy formulation process is a “multi-stakeholder model” involving “business stakeholders, civil society, the technical community, academia, Internet end users, and governments.” It can be seen that civil society, which has been suppressed by cyber sovereignty, has been “revived” in the “multi-stakeholder” governance model.38 However, this governance model is neither simply “civil society autonomy” nor heteronomy centered on cyber sovereignty, but rather “co-governance” by multiple subjects. 3.3 Decentralization of Network Sovereignty: The Decline of Civil Society It is worth noting that, while ICANN represents the “multi-stakeholder” governance model, it remains under U.S. government oversight. A memorandum of understanding between the U.S. Department of Commerce and ICANN outlines specific policy tasks for ICANN to carry out, with priorities and milestones that align with U.S. government interests. Thus, despite its global status, ICANN still significantly reflects U.S. national interests. When ICANN’s agreement with the Department of Commerce ended on September 30, 2015, “multi-stakeholder” governance officially became the internationally recognized approach for global Internet governance. Civil society has reshaped its new position in the “multi-stakeholder” governance model. The “multi-stakeholder” governance model is characterized by the diversification of governance entities, that is, the governance of the Internet is no longer simply “government-centralism” but reflects “regulatory pluralism” (government, business, civil society) in the digital age. This article will introduce regulatory theory for further development. The conventional approach holds that classic bureaucratic “government regulation” can maximize the concentration of regulatory resources to achieve specific public policy goals. However, the limitations of the effectiveness of this “government regulation” have been criticized by academia. Its dominant flaw is that the centralized approach of concentrating power cannot effectively face the increasingly complex regulatory needs. The criticism of traditional regulatory theory is based on the assumption that regulatory resources are not only in the hands of the government which represents the power of the state but are also dispersed among various non-governmental entities in the government and society. In the era of Web 3.0 and big data, the data deluge is driving the digital transformation of almost all enterprises. In the process of transformation, the value of data (especially big data) is further revealed, and data has begun to appear on the market as a resource, becoming a recognized competitive advantage for enterprises.

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 In this case, there are two transformations of power relations: in the case of the enterprise and the government, data has become a regulatory resource for the enterprise, and these regulatory resources have given the enterprise a considerable degree of informal power. This informal power can even have a significant impact on the government's formal power order, i.e., the government and the enterprise share regulatory power. In the case of enterprises and civil society, although they are both non-governmental entities, there is still a significant gap in the regulatory resources they control. Which means, as the most dynamic market players, enterprises often also have a huge wealth advantage and information advantage, and the big data resources they control in the era of algorithms are obtained from users in civil society. The digital wave has further created a factual power gap between enterprises 50and civil society. As a result, the theoretical (as shown in Figure 1 below) and practical (as shown in Figure 2 below) aspects of the “multi-stakeholder” governance model gradually became misaligned, and civil society gradually faded away in this misalignment: in the theoretical aspect, civil society, along with governments and businesses, exercised regulatory power as a mainstay of Internet governance. In the practical aspect, due to the huge gap in regulatory power with the government and enterprises, civil society's status as a governance entity has been formalized. At the same time, civil society itself has become the target of governance by the government and enterprises, that is, it has been“objectified” (externalized). Figure 1: Theoretical Aspects of the Multi-Stakeholder Governance Model

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 Figure 2: Practical Orientation of the Multi-Stakeholder Governance M51odel 4. The Global Digital Compact’s Revival of the Idea of Civil Society Civil society, which is gradually fading away, needs to be revitalized in the digital age, thereby realizing a new picture of the “multi-stakeholder” governance model. In this regard, an interpretation of the times for GDC will be crucial. To “revive” civil society in the digital age, it is necessary to return to the value basis of this group. Civil society on the Internet represents the public interest of the vast number of Internet users, and this public interest is generally represented in practice by civil organizations with public welfare. However, compared with governments and enterprises, which have huge regulatory resources, civil organizations are often unable to advocate for the public interests they represent. Therefore, to change this situation, it is necessary to transform the form of representation of civil society’s interests. Take the basic constitutional rights as an example. It has undergone a conceptual shift from “negative protectionism” to “positive protectionism” in the macro sense. The former advocates that the public power of the state should not interfere with citizens' exercise of basic rights, while the latter advocates that the public power of the state should take the initiative to provide material assistance and support for citizens to exercise their basic rights. When people see the protection of the interests of civil society on the Internet, what civil society in the “multi-stakeholder” governance model wants is the right to actively govern the Internet. The vast number of Internet users can participate in the formulation and implementation of Internet rules, thus achieving a certain degree of autonomy. Therefore, the interests of civil society require a “positive protectionism” protection concept, and the governments and enterprises outside civil society that enjoy a lot of regulatory power need to assume the obligation to protect the interests of civil society.

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 Therefore, the further question is: what is the basis for the obligation of the government and enterprises to safeguard the interests of civil society? This article believes that GDC proposes “digital human rights” as the answer to this question. Digital human rights are the main basis for governments and enterprises to safeguard the interests of civil society on the Internet. Digital human rights, as a value order, constitute the implementation premise and a new picture of the “multi-stakeholder” governance 52model. 5. Interaction Between “Stakeholders” Under the Framework of the Global Digital Compact The GDC represents a groundbreaking initiative in the quest for cohesive and inclusive digital governance. By outlining a framework that incorporates diverse stakeholders—governments, enterprises, and civil society—the GDC aims to address the fragmented approaches to digital regulation that currently prevail. This section delves into the overarching principles and objectives of the GDC, setting the stage for a closer examination of its proposed interactions and governance mechanisms. 5.1 General Overview of the Global Digital Compact 5.2 Horizontal Interaction: International Digital Cooperation Framework In horizontal interaction, governments need to continuously negotiate and form a digital cooperation framework through government-to-government negotiations. As stated in GDC, the United Nations is only a convening body that has facilitated GDC, and the specific implementation of the compact still requires the support and cooperation of governments. The international digital cooperation framework formed between governments has two main objectives: first, to form digital connectivity between governments to eliminate the digital divide between countries, especially between developed and developing countries (Global Digital Compact Initiative A). Specific methods include providing

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 online resources (Global Digital Compact Initiative B) and ensuring cyber security (Global Digital Compact Initiative D). Second, governments should reach a basic consensus on the concept of AI governance and codify it, so as to formulate international standards for AI governance and provide 53general guidance for national AI governance. 5.2.1. Digital Connectivity (Eliminating the Digital Gap) Digitalization indeed brings opportunities for enhanced efficiency, transparency, and accountability, yet significant infrastructure challenges remain. Additionally, surveillance risks and other potential threats to human rights persist. To bridge the Digital Divide, urgent international cooperation is necessary. As digitalization advances, there is an increasing risk that the gap between urban and rural areas will widen, leading to a surge in the number of people without access to digital technologies and services. Key digital technologies play an essential role in enabling access to resources, jobs, healthcare, education, and public services, positioning the digital divide as an emerging human rights issue. In line with the UN 2030 Agenda for Sustainable Development, it is vital that technological advancements are inclusive of all. With internet demand rising sharply during the COVID-19 pandemic, nations should aim to expand internet access as widely as possible. Closing the Digital Divide, including addressing the gender digital gap, is critical to delivering essential services. As countries outline their ambitions in artificial intelligence and digital transformation, they must prioritize societal needs and ensure that diverse groups have fair access to digital technologies, making genuine efforts to promote inclusivity. Member states shall commit to crafting policies and new financial strategies that incentivize telecommunications providers to deliver affordable connectivity in underserved regions. Additionally, they should work on enhancing or creating public education programs to improve digital literacy and cross-disciplinary skills, while promoting lifelong learning opportunities for workers. In this context, China has demonstrated a strong approach to addressing the digital divide. Since the inception of the Belt and Road Initiative, digital collaboration has rapidly progressed over the past decade, yielding numerous results, such as the gradual establishment of a digital cooperation framework, notable improvements in digital connectivity, the rise of e-commerce along the Silk Road as a new driver of trade and development, expanded mobile payment networks facilitating easier currency transactions, and a growing public sense of benefit from digital cooperation. For further details on specific achievements, please refer to the table below. Table 1: Digital Cooperation Systems Directly Signed by Governments Between China and Countries Along the Belt and Road Name of the Systems Participating countries Content and Meaning

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 “Belt and Road” Initiative on International Cooperation in the Digital 54Economy China, Egypt, Laos, Saudi Arabia, Serbia, Thailand, Turkey, United Arab Emirates Propose key areas, implementation mechanisms and main principles for international cooperation in the digital economy along the Belt and Road. Cooperation Agreement in the Field of Informatization and Digitalization China and Russia Encourage both sides to strengthen cooperation in the digital field Memorandum of Understanding on Building a “Digital Silk Road” China and 17 other countries, including Turkey, Saudi Arabia, Laos and Cuba Cooperate in human resources development, technology transfer, and regulatory development. Memorandum of Bilateral E-commerce Cooperation China and 30 other countries, including Italy, Argentina, Russia and Austria Partners will work together on multi-level and multi-field cooperation in policy communication, planning integration, and industrial promotion, and jointly explore new areas of economic and trade cooperation in the building of the Belt and Road.

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 Table 2: Digital Cooperation Systems Signed by China and Countries Along the Belt and Road Through International O55rganizations Name of the systems Participating countries or organizations content and meaning APEC Initiative for Internet Economy Cooperation, APEC Cross-Border E-Commerce Innovation and Development Initiative, APEC Roadmap for the Internet and the Digital Economy, APEC Framework for the Facilitation of Cross-Border E-Commerce, APEC Digital Economy Action Plan China and the Asia-Pacific Economic Cooperation (APEC) Systems and priority areas for digital economy cooperation under the APEC framework have been identified, and 37 digital economy cooperation projects have been led. “International Code of Conduct for Information Security” updated text China and the Shanghai Cooperation Organization (SCO) The first comprehensive and systematic international document to set out norms of behavior in cyberspace. It has made an important contribution to promoting the formulation of norms of behavior in cyberspace. G20 Digital Economy Development and Cooperation Initiative China and the Group of 20 (G20) It elaborates on the concept of the digital economy, clarifies the principles and priority areas of digital economic cooperation, and is the world's first digital economic policy document Data sources: Chinese government website, China Belt and Road website.

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 signed by leaders from multiple 56countries. Agreement on Trade and Economic Cooperation between China and the Eurasian Economic Union China and the Eurasian Economic Union (EAEU) Aims to improve trade facilitation, promote the in-depth development of economic and trade relations between China and the Eurasian Economic Union and its member states, bring benefits to enterprises and people of both sides, and provide institutional guarantees for bilateral economic and trade cooperation. China-Arab Data Security Cooperation Initiative China and the League of Arab States (LAS) This marks a new stage in strategic mutual trust and pragmatic cooperation in the field of digital affairs between the two sides. The two sides are willing to take this as an opportunity to continuously deepen cooperation and jointly promote global digital governance and international rule-making. G20 Action Plan for Digital Innovation Cooperation China and the Group of 20 (G20) The aim is to promote the innovative application of digital technology and achieve inclusive sharing of innovation. The two sides will work together to build a global digital economic structure that is inclusive, balanced, coordinated, win-win and prosperous.

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 Data sources: Chinese government website, China Belt and Road website.5747 5.2.1.1 Providing Online Resources The internet resource provisioning initiative, introduced by GDC, focuses on two main objectives. The first goal is to invest strategically in digital public infrastructure and services, fostering a global awareness of digital public goods and sharing best practices to drive progress toward the Sustainable Development Goals. The second goal is to harness data as a powerful tool to advance these goals by ensuring it is inclusive, interoperable, and accessible. Key areas of action include uniting data resources, artificial intelligence expertise, and infrastructure across borders to innovate in support of specific Sustainable Development Goal targets and creating a sustainable environment by establishing globally consistent digital standards and protections for environmental sustainability. Member States and stakeholders should develop a framework for inclusive, sustainable digital public infrastructure based on best practices and clear safety standards. This includes creating a global repository for digital service insights, dedicating funds for digital transformation, and addressing data gaps for tracking SDGs with a goal of 90% public data accessibility by 2030. Supporting open data ecosystems is crucial for effective disaster response, aided by UN and WMO initiatives. Priority areas for collaborative data and AI research include agriculture, education, energy, health, and sustainability. A secure global platform should also be created to provide researchers and policymakers with necessary data, licenses, and safeguards to support green digital progress. Multilateral organizations are encouraged to create pooled funds to support governments in planning and developing digital public infrastructure. This includes expanding the OECD’s purpose code to track funding for digital transformation aligned with the Sustainable Development Goals. A forthcoming UN digital transformation blueprint will provide a step-by-step guide, while the new digital window in the SDG Joint Trust Fund should support national digital projects with assistance from Resident Coordinators and UN Country Teams. 5.2.1.2 Ensuring Network Security There are two major cores to ensuring network security. First of all, safeguarding the free and shared nature of the Internet, so that it becomes a unique and irreplaceable global public asset that is not unreasonably restricted by public power or capital. In this regard, Member States should pledge to avoid broad Internet shutdowns, as such actions undermine efforts to close the digital divide. Instead, any restrictive measures should be proportional, non-discriminatory, applied only when essential, and accompanied by transparent reporting on their purpose and legal basis, in alignment with international human rights standards. Under the UN cyber diplomacy framework, there is a commitment to avoid disrupting critical infrastructure essential for cross-border services and the global stability of the Internet. Stakeholders should also pledge to uphold

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 network neutrality, fair traffic management, standardized technical protocols, and interoperability 58across infrastructure, data, platforms, and devices to ensure an open, interconnected Internet. 5.2.2 International Standard for Artificial Intelligence Governance While digital technologies and AI systems offer notable benefits for individuals and society, they also present certain risks that may impact human rights in the digital realm. These risks include the use of facial recognition for mass surveillance, algorithmic biases, and a lack of transparency that can lead to unfairness, privacy violations, data misuse, and the spread of disinformation through deepfakes. Governments and officials, in particular, bear a “special responsibility” to uphold human rights when deploying AI and automated decision-making systems, as highlighted by a landmark ruling in the Netherlands. In response, an increasing number of countries and international organizations are working to establish global standards for AI governance to manage and regulate its impact. From the perspective of extra-territorial and international law, many important data and artificial intelligence legislative initiatives have been proposed within the European Union, such as the “Proposal for a Regulation of the European Commission on an AI Regulatory Framework” (EU AI Act). This draft regulation centers on managing the “impact” of AI systems on individuals, while other related EU initiatives include the Digital Services Package and the 2020 European Data Strategy. In 2019, the OECD introduced the Recommendation on Artificial Intelligence, outlining principles for governing trustworthy AI. The OECD also serves as the secretariat for the Global Partnership on Artificial Intelligence (GPAI), launched in July 2020, aiming to foster responsible AI development that respects human rights, inclusiveness, diversity, innovation, and economic growth. At the EU level, CAHAI was established to explore a legal framework for AI systems that aligns with human rights, democracy, and the rule of law. Acknowledging the limits of self-regulatory ethical codes, CAHAI aims to safeguard these values through binding legal measures. This initiative involves all Council of Europe departments and includes tools like the Charter of Ethics on the Use of Artificial Intelligence in the Justice System, developed by CEPEJ. At the United Nations, UNESCO’s Commission on Social and Human Sciences has endorsed an “Ethical Recommendation for Artificial Intelligence,” marking the first global framework to address AI’s ethical implications. Similarly, UNICEF has drafted a “Policy Guidance for Artificial Intelligence for Children,” offering recommendations for creating AI policies and systems that uphold children’s rights and ensure the protection of their data and privacy. Numerous international and regional organizations, including the United Nations, have also established their own standards to regulate and govern AI within their specific domains. Member States should consider the High-level Advisory Committee on Effective Multilateralism's recommendation to create a fund supporting research and preparation for existential risks posed by unregulated AI advancement and to establish a high-level AI advisory body under the Global Compact on Data. This body could bring together experts from Member States, relevant UN agencies, industry, academia, and civil society, meeting regularly to assess new AI governance frameworks across regions,

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 countries, and industries. It would offer guidance on ensuring that ethical, safety, and regulatory standards align with and support universal human rights and the rule of law. This advisory group could publicly share its findings and, when applicable, recommend governance strategies and international standards for AI. Additionally, agreements with industry associations could be pursued to create sector-specific guidelines, ensuring that technology developers and users have tailored guidance for the design, application, and review of AI-59driven tools in various settings. 5.3 Vertical Interaction: Domestic Regulation of Resource Allocation In vertical interaction, there needs to be a virtuous coordination between the government and enterprises regarding the allocation of regulatory resources. The “multi-stakeholder” governance model not only means the diversification of governance entities, but also the coordination and cooperation between them. As stated in Action Line E of GDC, there should be enhanced cooperation between governance entities such as governments and enterprises to formulate and implement common domestic digital governance rules. 5.3.1 Risk Assessment System (Supervised Self-Regulation) After the enterprise has established a basic data compliance system, it needs to conduct a risk assessment of the data processing procedures under the compliance system, which is to some extent a verification of the effectiveness of the data compliance system. Article 35 of the EU GPDR stipulates that a “data protection impact assessment” shall be conducted when the data controller's data collection activities may pose a high risk to the natural person's right to freedom. As for the specific content of the assessment, some scholars have summarized three main parts: objective setting, scope and methods, and assessors. In China, the normative basis for the data compliance risk assessment mechanism for personal information protection is the “personal information protection impact assessment” stipulated in Articles 55 and 56 of the Personal Information Protection Law. At the theoretical level, some scholars have proposed that impact assessments can be carried out based on aspects such as application scenario investigation, personal information classification, interest impact analysis, and system risk assessment. This article argues that the current discussion on the data compliance risk assessment system mainly focuses on its specific construction and practical application, and lacks discussion on the effectiveness of the system, i.e., what legal effect does the result of the risk assessment have? How does it connect with other systems? Returning to the basic principles of data compliance, data compliance is not only a form of self-regulation by enterprises, but also an incentive for government regulation. Specifically, the data compliance risk assessment system can be linked to the leniency system for enterprises involved in cases. Taking Article 3 of the Shenzhen Enterprise Data Compliance Guidelines as an example, the result of the data compliance risk assessment can be used as the standard for fulfilling the obligation to “fulfill data compliance obligations” in Paragraph 1 of the Article. If the result of the data compliance risk assessment is good, it should be considered as proof of effective compliance in the

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 “effectiveness standard” in Paragraph 3 of the Article. It should be noted here that the data compliance risk assessment mechanism is based on a risk assessment of the entire data life cycle, involving multiple stages such as data collection, data transmission, data storage, data processing, data exchange, and data destruction. Therefore, the corresponding risk assessment results should also be phased, i.e., the determination of the data compliance risk assessment results should not be determined as a “package” but 60should be determined separately for each stage. 5.3.2 Pluralistic Accountability System (Self-Regulation of Being Held Accountable) Risk assessment as “supervised self-regulation” supervises the enterprise’s self-regulation from the perspective of ex-ante prevention by urging the enterprise to independently assess the risks under the data compliance system, thereby achieving supervision of the enterprise’s self-regulation. Pluralistic accountability in this part is a restriction imposed on the enterprise’s self-regulation from the perspective of ex-post relief. Compared with the previous two links, pluralistic accountability as “enforced self-regulation” more reflects the mandatory nature of public power intervention and serves as a bottom-up guarantee. Specifically, for enterprises that have legal risks such as infringement of information data due to non-compliance with data compliance standards, corresponding accountability mechanisms should be established. At the regulatory level, Article 5 of the GDPR, which is extraterritorial, clearly stipulates the accountability mechanism for enterprises as data processors. Article 51 of the domestic Personal Information Protection Law requires that personal information processors fulfill corresponding information protection compliance obligations. Organizational measures such as the adoption of security technical measures such as encryption and de-identification, as well as the identification of a person responsible for personal information protection and regular security education and training for employees should be implemented. The “pluralistic accountability” advocated in this article mainly refers to “multiple forms of accountability”. As a self-regulatory model, data compliance benefits from legal incentives for its smooth implementation. Therefore, regulatory accountability for data compliance should not be overly coercive (one-size-fits-all). When considering the cost and impact of law enforcement, regulators and the regulated often prefer a regulatory approach at the bottom of the enforcement pyramid, that is, encouraging companies to self-regulate. Therefore, accountability for data compliance can adopt a “enforcement pyramid” mindset, and different levels of responsibility can be determined and adjusted according to the attitude and response of the enterprise to accountability. According to the general corporate compliance theory, the compliance services provided by domestic lawyers for lawyers generally include three parts: creating a compliance plan, providing compliance investigations, and responding to law enforcement investigations. Correspondingly, the “enterprise-government” binary interaction in data compliance can be reflected at each stage, to determine the responsibility that the enterprise should bear when it fails to self-regulate.

J. Int. Eco. Glo. Gov. 2025, 2(1), 45-66 https://doi.org/10.12414/jiegg.250437 616. Conclusion GDC issued by the United Nations has a certain mission for the times. It aims to update the governance concept of the “multi-stakeholder” governance model and formulate common principles for building an open, free and secure digital future for all mankind. Although GDC has not yet obtained the clear force of international law, in today’s world, which relies more than ever on digital technology for interconnection and socio-economic prosperity, and the significance of GDC for the times is becoming increasingly prominent. In the specific implementation of GDC, attention should be paid to the value order of digital human rights in civil society as the core foundation governing global digital governance, thus distinguishing between “government-government” international horizontal interaction and “government-enterprise” domestic vertical interaction. Horizontal interaction aims to form an international framework for digital cooperation between governments, eliminate the international digital gap between developed and developing countries, and form international standards for the governance of artificial intelligence. Vertical interaction aims to form multi-regulatory interaction between governments and enterprises, and achieve interaction and coordination between self-regulation and government regulation through risk assessment mechanisms and multiple accountability mechanisms. Looking back at the world at the beginning of the 21st century, the world trade system with the WTO at its core gradually improved, and the wave of globalization, which represents barrier-free and free flow, swept through almost every country. In contrast, in the Internet era today, the wave of de-globalization is impacting on the framework and order of global digital governance. Under this background, this article hopes to promote GDC to activate the “multi-stakeholder” governance model through theoretical analysis and outlook, to achieve a new view of global digital governance. Acknowledgement The authors would like to express their heartfelt gratitude to Junxi Duan for providing valuable insights and inspiration that greatly contributed to the research direction of this paper. Without such guidance and encouragement, this work would not have been possible. Funding Statement None. Author Contributions Qifan Jiang: writing original draft, validation, investigation. Yuhang Ma: methodology, writing review and editing supervision. All authors reviewed the results and approved the final version of the manuscript. Availability of Data and Materials None.

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J. Int. Eco. Glo. Gov. Macao Scientifi Publishers（MOSP） https://www.mospbs.com/journal/jiegg 67·Article· Research on BDI Index Prediction Based on LSTM Neural Network Wenjie Li1,*，HaiBo Bao2，Xinge Lei3 1 Department of Economy, Party School of Zhejiang Provincial Committee of C.P.C, Hangzhou, China 2 Department of Economy, Party School of Zhejiang Provincial Committee of C.P.C, Hangzhou, China 3 Department of Economy, Party School of Zhejiang Provincial Committee of C.P.C, Hangzhou, China * Corresponding Authors: Wenjie Li. Email: jerome17398267942@163.com Received: 17 November 2024 Accepted: 5 December 2024 Published: 25 February 2024 Abstract: This study utilizes the Long Short-Term Memory (LSTM) neural network model to predict the Baltic Dry Index (BDI), a crucial indicator of the global economy and international trade. By analyzing historical data and related economic indicators of the BDI, a dataset incorporating multiple time series characteristics was constructed. The study finds that a univariate LSTM model demonstrates higher accuracy and stability in predicting the BDI index due to its ability to capture nonlinear dynamic features. This model can provide market trend forecasts for investors, assist in formulating investment strategies, and support economic policy decisions for government policymakers in adapting to changes in international trade and shipping markets. The results indicate that the LSTM model has practical value in financial market forecasting and offers a new direction for the application of deep learning technology in this field. Keywords: Shipping Market; LSTM Model; BDI Index; Index Forecasting 1. Introduction Since the time of Adam Smith, trade has been recognized as a catalyst for economic development. Through trade between nations, the uneven distribution of resources across different countries has been addressed. The shipping market, as a vital facilitator of international trade, has successfully overcome the barrier of distance in international trade, making the connections between international trade more tightly knit. Ocean transportation, as an important mode of long-distance transport, boasts advantages such as large cargo capacity, a wide variety of goods that can be transported, and low unit transportation costs. The Baltic Exchange is the world's first shipping market futures exchange. The Baltic Dry Bulk Freight Index (BDI) is a comprehensive index composed of freight rates from several traditional dry bulk shipping routes, weighted according to their importance and proportion in the shipping market. It is one of the most important indices in the global shipping market and is considered a barometer and

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 weathervane for the entire international dry bulk shipping market. In recent years, due to unstable international situations and the impact of the pandemic, market supply and demand have changed rapidly, leading to significant fluctuations in the BDI index, which affects the operation of the international trade market. Moreover, compared to other futures indices, the BDI index is not easily manipulated by governments or speculative institutions and is entirely determined by the spontaneous equilibrium of market supply and demand. Therefore, accurately predicting the trend of the BDI index 68is beneficial to the development of the entire shipping market. Current research on BDI index forecasting focus on traditional time series analysis methods, machine learning methods, and deep learning methods. Given the high volatility and non-stationary nature of shipping market data, accurate prediction of the BDI index has always been a hot topic in current shipping research. Utilizing LSTM models to analyze and forecast the time series of the BDI index, neural network models can effectively handle long-term dependencies in time series data, giving LSTM models an advantage in predicting long-term sequence data of the BDI index. In terms of the complexity and non-stationarity of data, LSTM models can also learn and capture features within the data, thereby enhancing the accuracy and reliability of the forecast results. 2. Literature Review The Baltic Dry Index (BDI), as a barometer of the international dry bulk shipping market, has always been a focus of attention. In recent years, with the fluctuations in the global economy and the recovery of the shipping industry, the changes in the BDI index and the analysis of its influencing factors have become hot topics in academic research. This paper provides a review of the current state of research on the factors influencing the BDI index from multiple perspectives. 2.1 Literature Review on the Factors Influencing the BDI Index Firstly, from the perspective of the global economy and trade, many scholars have explored the association between the BDI index and economic conditions and trade activities. Gao, Ruzhao et al. analyzed the linear and nonlinear Granger causal relationships between global economic policy uncertainty and the BDI index, concluding that the causal relationship between them changes over time. Tiwari, A.K. (2024) studied the impact of the shipping market on the commodity market, concluding a two-way causal relationship between shipping market freight prices and the commodity market. Ma Shaohui et al. (2017), through cointegration tests and causal analysis, revealed a one-way Granger causal relationship between the BDI index and the order volume of dry bulk ships, indicating that global trade demand has a significant impact on the BDI index. At the same time, Lan Xian Gang (2023), when analyzing the fluctuations of the BDI index, also emphasized the impact of international oil price trends on the BDI index, reflecting the important role of global economic factors in the shipping market. Secondly, the ship market factors are also one of the key factors affecting the BDI index. Zhang Yongfeng et al. (2016) used the GARCH model to analyze the correlation between commodity trade and the capital market, revealing the close connection between the ship market and the capital market.

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 Wu Huahua et al. (2019) used the VMD-FFT-LSTM combined forecasting model to improve the prediction accuracy of the BDI index, further proving the importance of ship market factors in predicting 69the BDI index. In addition, some scholars have explored the influencing factors of the BDI index from other perspectives. For example, Gu, YM. (2019) studied the interaction between the BDI index and iron ore spot prices under the new pricing mechanism, indirectly illustrating the impact of iron ore prices on the BDI index; besides the controlled variables, a significant spillover interaction between BDI and the iron ore market was found. Liu Bin et al. (2010), by comparing the BDI index with the Shanghai Composite Index, found a positive correlation between the two, revealing the impact of the capital market on the BDI index. Wang Xian (2023) used EMD algorithm and machine learning models to perform frequency decomposition and predictive analysis on the influencing factors of the BDI index, providing new ideas and methods for the prediction of the BDI index. This review highlights the multifaceted nature of the BDI index, with its fluctuations being influenced by a complex interplay of global economic conditions, trade activities, ship market dynamics, and other factors. The ongoing research in this area aims to provide a more comprehensive understanding of these influences and to develop more accurate forecasting models for the BDI index. 2.2 Research Status of LSTM Neural Network Models With the rapid development of big data and artificial intelligence technologies, Long Short-Term Memory (LSTM) models, as an important branch of deep learning, have been widely applied in various fields such as time series prediction, natural language processing, and speech recognition. Particularly in the area of financial time series forecasting, LSTM models have gradually become a research hotspot due to their strong memory capabilities and nonlinear fitting abilities. Scholars both domestically and internationally have conducted extensive research on this topic. For instance, Bae, S.-H. (2021) utilized deep learning models to predict the trends of the Baltic Dry Index (BDI), comparing the forecasting effects of algorithms such as Recurrent Neural Networks (RNN) and determining the optimal parameters. Yang Chen et al. (2023) employed a combination of Empirical Mode Decomposition (EMD) and LSTM models for predicting international gold futures prices, conducting an empirical analysis on gold futures price data from 2011 to 2021. The results indicated that the LSTM neural network model had better predictive accuracy, providing a more effective method for investment decisions in the gold futures market. In the field of stock index prediction, Yang Qing et al. (2019) compared the performance of LSTM models with Support Vector Regression (SVR), Multilayer Perceptron (MLP), and Autoregressive Integrated Moving Average (ARIMA) models in forecasting 30 global stock indices, finding that LSTM neural network models demonstrated excellent predictive accuracy for different time horizons of stock indices. Peng Yan et al. (2019), in response to the volatility characteristics of the stock market, built network models with different numbers of LSTM layers, effectively improving the accuracy of stock price predictions and providing valuable references for stock trend forecasting.

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 Additionally, Ouyang Hongbing et al. (2020) combined wavelet analysis with LSTM models to model and predict the closing prices of the Dow Jones Industrial Average; through comparisons with various models, it was found that LSTM neural network models had higher predictive accuracy, providing a scientific basis for investment decisions in the financial market. In terms of stock index prediction, Li Jia et al. (2019) used LSTM neural networks and other deep learning technologies for an in-depth analysis of China's CSI 300 Index and Shanghai Composite Index, finding that LSTM models showed higher precision in predicting stock indices, offering valuable reference information for investors. Zhang Wei et al. (2022) conducted an LSTM network prediction study on the stock prices of China's petroleum industry, discovering through comparisons with traditional time series analysis methods that LSTM had better predictive capabilities and stability when dealing with nonlinear and highly volatile financial time series data, providing strong support for investment decisions in the petroleum market. Yao Honggang et al. (2021) compared the standard LSTM model with prediction methods combined with EMD, using the Shanghai Composite Index data for empirical analysis. The results showed that the proposed EMD-LSTM model had better predictive effects, offering investors 70more accurate market trend predictions. In summary, existing research primarily utilizes neural network models for predictive analysis of time series indices; due to the influence of multiple international factors on the BDI index, there is a scarcity of predictive research on the BDI index. Some literature only examines the macroeconomic factors affecting the BDI index without further subdividing these factors from multiple perspectives. Additionally, there is a lack of research that continues to decompose the prediction of the BDI index using existing machine learning models based on the analysis of influencing factors. Accordingly, the marginal contributions of this paper are mainly reflected in the following two aspects: First, in terms of analyzing influencing factors, the paper subdivides the main influencing factors for different industries and identifies the primary micro-level factors of each macroeconomic factor through various causal analysis methods. This provides a new approach for in-depth research on the influencing factors of the BDI index. Second, in terms of predicting the BDI index, the paper innovates and optimizes the prediction model by constructing a four-factor LSTM model based on the analysis of specific influencing factors, and compares the results with those of single time series models, providing empirical support for the innovation of BDI index prediction models. 3. Analysis of Factors Influencing the BDI Index The Baltic Dry Index (BDI) is published by the world-renowned Baltic Exchange, which succeeded the Baltic Freight Index (BFI) launched in 1985. The BFI was initially designed to reflect changes in international dry bulk shipping rates, with a base point of 1,000, and was composed of freight and charter rates from 13 internationally significant shipping routes. The cargoes covered by these routes primarily consisted of bulk commodities such as iron ore, coal, crude oil, and grain. As international trade continues to evolve, the number of shipping routes has increased, and freight rates have fluctuated, leading to constant adjustments in the weighted proportions of freight rates for

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 different routes. In 1999, the Baltic Exchange restructured the BFI into three components based on different ship types: the Baltic Capesize Index (BCI), the Baltic Panamax Index (BPI), and the Baltic Handsize Index (BHSI), expanding the number of routes t71o 24. The Baltic Handsize Index (BHSI) is categorized based on the deadweight of the vessels, generally referring to dry bulk carriers with a capacity between 50,000 and 60,000 tons. With the development of international trade, distinct differentiations emerged in different handysize vessel markets. In 2005, the Baltic Exchange introduced the Baltic Supramax Index (BSI) and adjusted the BDI to consist of four parts: the Baltic Capesize Index (BCI), the Baltic Panamax Index (BPI), the Baltic Handsize Index (BHI), and the Baltic Supramax Index (BSI), with each index contributing 25% to the BDI. After 2009, to more accurately reflect changes in the international shipping market, the average rental was adopted as the calculation standard for the BDI. Concurrently, due to the continuous increase in international trade routes, the calculation of the BDI underwent several adjustments. Since the 2017 revision, the BDI has been composed of three weighted parts: the Baltic Capesize Index (BCI) accounting for 40%, the Baltic Panamax Index (BPI) accounting for 30%, and the Baltic Supramax Index (BSI) accounting for 30%, forming an average rental index. The BDI index is influenced by a multitude of factors, including but not limited to: 1. Global Economic Conditions: The state of the global economy significantly impacts the demand for dry bulk commodities, thereby affecting the BDI. 2. Trade Patterns: Changes in international trade patterns, such as the volume of commodities being shipped, can influence the demand for dry bulk shipping services. 3. Shipping Market Dynamics: The supply and demand dynamics within the shipping industry, including the number of vessels, their sizes, and the availability of shipping capacity, play a crucial role in determining the BDI. 4. Commodity Prices: Fluctuations in the prices of commodities like iron ore, coal, and grains can impact the volume of trade and, consequently, the BDI. 5. Geopolitical Factors: Political stability and conflicts can disrupt trade routes and affect the BDI. 6. Seasonal Variations: Certain commodities have seasonal trade patterns that can influence the BDI. 7. Technological Advancements: Improvements in ship design and fuel efficiency can impact the cost of shipping and the BDI. 8. Environmental Regulations: Changes in environmental policies and regulations can affect the operation of ships and the BDI. Understanding these factors is crucial for stakeholders in the shipping industry, as it allows them to make informed decisions regarding fleet management, route planning, and market strategies. The BDI index serves as a key indicator for these analyses, reflecting the broader health of the global dry bulk shipping industry.

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 Figure3-1 72BDI Index Trend 3.1 Metal Market Price Factors The transportation of metal bulk cargo is primarily dominated by shipping. Due to the rapid development of the metal materials industry and the continuous growth of international trade in recent years, the volume of metal bulk cargo shipped has been increasing. Among them, iron ore is the metal raw material with the largest proportion of seaborne trade, accounting for about 40%. Bauxite, as the main source of aluminum, is widely traded globally. The demand for bauxite remains stable due to the application of aluminum in industries such as automobiles, construction, and packaging, thus promoting its position in the dry bulk shipping market. Copper, being an important raw material for the electrical and electronics industries, has a consistently high demand for copper ore. Long-distance transportation from large copper mines in countries like Chile and Peru to major consumer countries has increased the demand for dry bulk shipping. These metal bulk cargoes occupy a significant share in the dry bulk shipping market due to their key role in global industrial production. Their trade flows and price fluctuations have a significant impact on the supply and demand conditions of the shipping market and freight indices such as the Baltic Dry Index (BDI). This paper mainly selects the copper futures price index, 62% iron ore price index, and bauxite futures price index data from January 1, 2013, to March 2024, as the objects of analysis for metal bulk cargo market price factors. Since the New York Mercantile Exchange (COMEX) is the world's main center for metal futures trading, the data for copper futures and bauxite futures come from COMEX; China, being the main trading country for iron ore, provides the 62% iron ore price index from Chinese futures exchanges. Data queries are all from Wind. Since the premise of the Granger causality test is that the data is a stationary time series, we first conduct a unit root test on the multivariate time series data. As the unit root test did not pass, we difference the data and then conduct the unit root test again. The first-order differenced multivariate time series is a stationary time series. Therefore, we perform a cointegration test on this multivariate time series, and the cointegration test is significantly established at the 1% level. Table 1 shows the results of the Granger test. Through the Granger test results, we can find that there is a significant causal relationship between the BDI index and the futures prices of Al and Fe.

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 Table 1 Granger Causality Wald T73ests Equation Excluded Chi2 df Prob>chi2 BDI Cu 5.3389 2 0.069 BDI Al 9.9409 2 0.007 BDI Fe 16.276 2 0.000 BDI ALL 32.988 6 0.000 In the Granger causality test table, the Chi2 represents the chi-squared statistic with 2 degrees of freedom, and Prob>chi2 is the p-value used for judgment in this study. When the p-value is less than 0.05, we can reject the null hypothesis, implying that the causal relationship is significant. Since this study analyzes the influencing factors of the BDI index, the experimental results only display the one-way causal relationships between the futures prices of various financial market commodities and the BDI index. At a statistically significant level of 0.05, the futures price trends of Al (aluminum) and Fe (iron) have a significant causal relationship with the BDI index. 3.2 Agricultural Product Market Price Factors Agricultural products are indispensable raw materials in life and industrial production and constitute a highly significant component of international trade. Due to the supply and demand of agricultural products and their important position in the dry bulk shipping market, many countries around the world rely on importing these basic commodities to meet domestic needs. The transportation of agricultural products often involves the transnational shipment of large quantities of goods, especially from countries with high production but low consumption (such as Brazil, the United States, Canada, Russia, Australia, etc.) to countries with high demand (such as China, Egypt, Iran, European Union countries, etc.). In these dry bulk shipments of agricultural products, shipping is the primary mode of transportation, hence its impact on the international shipping market is self-evident. Countries with high demand for agricultural products are mainly developing nations, which have large populations but relatively lower levels of technology compared to developed countries, resulting in insufficient food production. In global agricultural trade, exporting countries are primarily developed nations, thus these countries have a more significant advantage in market pricing of agricultural products. China, as the world's largest importer of grain, holds an indispensable position in the international agricultural product trade market. Additionally, China is the world's largest importer of soybeans, with soybean imports accounting for approximately 90% of the annual grain import volume. During the China-U.S. trade friction period, international trade volumes of soybeans were severely affected. However, as trade relations between the two countries eased, the import and export volumes of soybeans began to gradually increase. In the entire international trade market for agricultural dry bulks, soybeans, wheat, cotton, and corn account for the main market transaction volumes. The Chicago Board of Trade is the world's largest agricultural futures exchange, and its futures price data is more authoritative. Therefore, this paper

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 selects the futures price index data of soybeans, wheat, cotton, and corn from January 1, 2013, to March 742024, as the objects of analysis for agricultural product market price factors. Table2 Granger Causality Wald Tests Equation Excluded Chi2 df Prob>chi2 BDI Corn 1.8946 2 0.388 BDI Wheat 0.81336 2 0.666 BDI Soybean Meal 0.1694 2 0.919 BDI Cotton 13.769 2 0.001 BDI ALL 19.575 8 0.012 From Table 2, it can be observed that the causal relationships between the prices of the four agricultural product futures and the BDI index vary. The p-values in the last column show that only the p-value for cotton futures is less than 0.05, allowing the rejection of the null hypothesis. This indicates a significant causal relationship between cotton prices and the BDI index. Conversely, the p-values for the other three agricultural product futures are greater than 0.05, signifying no evident causal relationship between their prices and the BDI index. Therefore, only cotton futures prices can be considered as input variables for the BDI index prediction model. 3.3 Factors Influencing Prices in the Energy Market The impact of energy market price factors on the Baltic Dry Index (BDI) is multifaceted. On one hand, in the dry bulk energy market, key traded energy commodities include coal and timber. Among these, coal has become a relatively stable trade commodity in the international market. There is a wide variety of coal types transported as dry bulk, with coking coal and thermal coal being the most significant. Thermal coal, which is increasingly in demand for electricity generation and industrial production, is notable for its high calorific value and ability to generate significant thermal energy. Due to the concentrated distribution of coal resources, global coal mining and production are mainly centered in China, the United States, Australia, and India. Australia, often referred to as the "oasis of coal," boasts one of the largest coal reserves in the world. Australian coal not only meets domestic demand but also generates substantial revenue from exports, contributing significantly to the country's economic growth. Timber, as a renewable energy resource, also holds a considerable share in the international dry bulk trade market. Its processing and use as an energy source contribute to environmental sustainability, further driving the growth of international timber trade. China, as the world's largest importer of timber, accounts for 25% of the international timber trade annually. On the other hand, oil prices play an indispensable role in maritime transport. Fluctuations in international oil prices significantly impact the shipping market. As dry bulk shipping typically involves long-distance international voyages, fuel consumption is substantial. Changes in oil prices directly influence shipping costs and, consequently, the BDI. According to data from Clarkson Research, fuel costs constitute 30% to 50% of shipping transportation expenses. During the COVID-19 pandemic,

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 international oil prices experienced dramatic volatility, which significantly affected the global shipping market. To more accurately analyze the impact of the price indices of the three energy commodities on the Baltic Dry Index (BDI), this study conducted a Granger causality test. The results of the analysis 75are presented in Table 3. Table 3 Granger Causality Wald Tests Equation Excluded Chi2 df Prob>chi2 BDI Thermal Coal Futures 14.749 2 0.001 BDI Timber Futures 6.0796 2 0.048 BDI WTI Crude Oil Futures 0.86021 2 0.650 BDI ALL 22.999 6 0.001 From the table, it is evident that the significance levels of the causal relationships between thermal coal futures, timber futures, WTI crude oil futures, and the Baltic Dry Index (BDI) vary. Among the three energy commodity futures, the p-values for thermal coal and timber futures are less than 0.05, indicating a significant causal relationship with the BDI. This finding underscores the growing impact of increasing demand for thermal coal futures on the international shipping market. Consequently, the price of thermal coal futures can be considered a key input variable for predicting the BDI. 3.4 Global Economic Factors The Baltic Dry Index (BDI), as a benchmark for international maritime trade, is closely linked to changes in the global economic landscape. Shifts in global economic conditions significantly influence international trade dynamics, which in turn impact the BDI. The status of dry bulk trade depends on the performance of the real economy and expectations for future economic activity. When the real economy performs well, international trade tends to flourish. Additionally, external market economic conditions also shape trade dynamics, thereby affecting the BDI. Stock market indices serve as specific indicators of real economic performance and future expectations, functioning as barometers of economic trends. Among global economic indicators, U.S. stock indices are particularly influential due to Wall Street's central role in the global economy. U.S. Treasury bonds, considered a safe haven for asset allocation during economic shifts, experience significant trading volumes and are regarded as proxies for risk-free interest rates. Among the three major U.S. stock indices, the Nasdaq Composite Index and the S&P 500 Index are highly representative, encompassing stocks from diverse industries with significant influence. For the analysis of global economic factors, this study selected the S&P 500 Index, the Nasdaq Index, and the U.S. Dollar Index as variables to assess their correlations with the BDI. All data were sourced from the Wind database. From 2013 to 2022, the Nasdaq Composite Index and the S&P 500 Index showed a steady upward trend. During the 2022 Russia-Ukraine conflict, both indices experienced a decline followed by a recovery. Despite the severe economic impact of the COVID-19 pandemic,

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 global economic conditions improved with post-pandemic recovery, and the BDI followed a similar 76trajectory. To more accurately analyze the effects of these three indices—the Nasdaq, S&P 500, and the U.S. Dollar Index—on the BDI, a Granger causality test was conducted. This analysis evaluates the causal relationships between these indices and the BDI. Table 4 Granger Causality Wald Tests Equation Excluded Chi2 df Prob>chi2 BDI U.S. Dollar Index 3.3913 2 0.183 BDI Nasdaq Composite Index 2.2455 2 0.005 BDI S&P 50 Index 1.287 2 0.525 BDI ALL 25.353 6 0.000 In conducting the Granger causality test on global economic factors, since the time series data are stationary, the original data can be directly used for the Granger causality test. As shown in Table 4, the test results indicate that only the Nasdaq Index and the Baltic Dry Index (BDI) have p-values less than 0.05. This suggests a significant causal relationship between the Nasdaq Index and the BDI within the context of global economic factors, making them suitable input variables for the LSTM model. 4. LSTM Neural Network Model Construction After analyzing four key market factors, including metal market prices, agricultural product market prices, energy market prices, and global economic factors, this study reveals that the correlation between the different analysis variables and the Baltic Dry Index (BDI) varies across these factors. In order to better analyze the trends of the BDI and improve its forecasting accuracy in subsequent LSTM models, this study selects the most highly correlated indicators. 4.1 Identification of Key Determinants These selected variables are then combined with the results from the previous Granger causality tests for further analysis and prediction. The heatmap illustrating the correlations between the BDI index and the different analysis variables across the factors is shown in Figure 4-1

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 Figure 4-1 77Heatmap of Influencing Factors Based on the results of the Granger causality analysis conducted earlier across the four market categories, and in conjunction with the correlation heatmap, the following conclusions can be drawn: In the metal market, since the price of Aluminum (Al) futures exhibits a Granger causality relationship with the Baltic Dry Index (BDI) and shows the highest correlation, Al futures price is selected as the first input variable for the LSTM model. In the agricultural product market, cotton futures price also demonstrates a Granger causality relationship with the BDI and has the strongest correlation, making cotton futures price the second input variable. In the energy market, the price of thermal coal futures shows a significant Granger causality relationship with the BDI and exhibits a strong correlation, thus it is chosen as the third input variable. Finally, in the global economic factors, the Nasdaq Index shows a Granger causality relationship with the BDI, with the highest correlation, so the Nasdaq Index is selected as the fourth input variable for the model. 4.2 Principle of LSTM Neural Network Models Long Short-Term Memory (LSTM) networks, an innovative extension of Recurrent Neural Networks (RNN), were proposed by Hochreiter and Schmidhuber in 1997. The primary design goal of LSTM is to address the issues of vanishing and exploding gradients that are commonly encountered by traditional RNNs when processing long sequences of data. 4.2.1 Model Principles The core of Long Short-Term Memory (LSTM) networks lies in their unique unit structure, which includes three primary gating mechanisms: the input gate, forget gate, and output gate. These gates collectively manage the flow of information within the unit, enabling LSTM to selectively store and

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 modify information. This gating structure addresses the limitations of traditional Recurrent Neural Networks (RNNs), which struggle to maintain long-78term memory. Input Gate: The input gate controls the extent to which the current input and the previous state influence the memory cell. It utilizes a Sigmoid function and a Tanh function to determine which information is important and should be retained in the cell’s long-term state. The input gate allows the LSTM to capture relevant new information at each time step, facilitating the model’s ability to learn from important temporal patterns. Forget Gate: The forget gate’s role is to decide which information should be discarded from the cell’s internal state. By applying a Sigmoid function, the forget gate enables the model to remove data that is no longer relevant or useful for future predictions. This selective forgetting mechanism ensures that the LSTM unit remains adaptable, continuously updating its memory by removing outdated or unnecessary information. Output Gate: The output gate determines how much information from the current cell state should be passed to the next hidden state and, ultimately, to the model’s final output. This mechanism allows the LSTM to generate accurate outputs based on both the current memory cell content and the current input. The output gate plays a key role in regulating the flow of information, ensuring that relevant data is transmitted to subsequent layers of the network. Through these three gating mechanisms, LSTM units effectively manage the flow of information, enabling them to learn and retain long-term dependencies, which is crucial for tasks involving sequential data. Figure 4-2 Gate Control Mechanisms in the LSTM Neural Network Model =  +−f W h x bt f t f( [ , ] )1 t (4.1) =  +−i W x bt i t t i( [h , ] )1 (4.2) tanh( [ , ] )t C t t CC W h x b=  +−1 (4.3) t t t t tC f C i C=  + −1 (4.4)

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 79=  +−o W h x bt o t t o( [ , ] )1 (4.5) = h o Ct t ttanh( ) (4.6) In addition to the gating mechanisms, the Long Short-Term Memory (LSTM) network introduces the concept of the memory cell (cell state), which is central to its architecture. The memory cell enables the network to retain and propagate state information across time steps, effectively addressing the problem of information loss during the processing of long sequences. The memory cell can be thought of as a highway that runs through the entire LSTM network, providing a pathway for the flow of information and helping the network maintain long-term memory. The memory cell plays a critical role in overcoming the limitations of traditional Recurrent Neural Networks (RNNs), where the ability to remember long-term dependencies is often compromised due to vanishing gradients. By introducing a cell state that carries information across time steps, LSTM networks ensure that relevant information is retained and passed along through the sequence. At each time step, the information within the memory cell is carefully adjusted: The input gate controls how much new information should be added to the memory cell, allowing the model to incorporate relevant data. The forget gate determines which information should be removed from the memory cell, ensuring that outdated or irrelevant information is discarded. The output gate then decides how much of the current memory content should be passed to the output layer, determining the information that will influence the next hidden state and the final output. Through these processes, the memory cell maintains the flow of information across time steps, enabling the LSTM network to capture long-term dependencies and avoid the information degradation commonly encountered in traditional RNNs. This structure is key to the model's effectiveness in tasks such as time series forecasting, language modeling, and speech recognition, where retaining contextual information over time is crucial. From an overarching perspective, Long Short-Term Memory (LSTM) networks, with their sophisticated gating strategies and the design of memory cells, possess a highly efficient capability to capture long-term dependencies in sequential data. This research effectively addresses several challenges encountered by traditional Recurrent Neural Networks (RNNs) when processing continuous, long-duration data, such as gradient vanishing and gradient explosion. By overcoming these issues, LSTM significantly enhances the model's ability to handle long time series data and improves its generalization performance. In practical applications, LSTM has proven to be highly successful across a wide range of sequential modeling tasks. These include, but are not limited to, language modeling, text generation, speech recognition, machine translation, and complex time series analysis. The effectiveness of LSTM in these domains demonstrates its powerful capabilities and broad application potential. Its ability to

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 maintain long-term memory and manage the flow of information across time steps makes it an 80invaluable tool in areas requiring the modeling of complex temporal patterns. Figure 4-3 LSTM (Long Short-Term Memory) Neural Network Model Structure 5. Forecast of the BDI Index After analyzing the main factors of the BDI index, this paper establishes two types of LSTM models for predicting the BDI index. Due to the capability of the input gate in the LSTM model to handle both univariate and multivariate information, the models can be differentiated into two categories: the LSTM model with a four-factor input gate and the LSTM model with a single-factor input gate. 5.1 Recent Forecast of the BDI Index The four-factor input gate model incorporates aluminum futures prices, cotton futures prices, thermal coal futures prices, and the NASDAQ index as the four variables for the input gate. In contrast, the single-factor input gate model utilizes the time series of the BDI index's price trends as the variable for the input gate. 5.1.1 Forecasting with a Four-Factor LSTM Neural Network Model The four-factor input gate model includes aluminum futures prices, cotton futures prices, thermal coal futures prices, and the NASDAQ index as the four variables for the input gate. The final training results are depicted in Figure 5-1.

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 Figure 5-1 Four-81Factor Prediction Model Using LSTM As shown in Figure 5-1, the blue curve represents the actual values, and the yellow curve represents the predicted values. From the trend, there is a significant discrepancy between the predicted and actual values. The actual values exhibit noticeable fluctuations, while the predicted values maintain an unchanging trend, resulting in excessive deviations in the curves. This indicates that the predicted values fail to provide a clear predictive effect, and the prediction accuracy is low. The reason for this situation may be the presence of correlations among different factors in the four-factor model. If these factors provide similar information or are redundant with each other, the model may struggle to distinguish their individual impacts on the BDI index. This could lead to instability in the model's fitting process or the model learning the average effect of these correlated factors rather than the independent effects of each factor. 5.1.2 Single-Factor LSTM Neural Network Model for Prediction In the testing and training of the single-factor LSTM model, the entire training dataset is traversed by the model 10 times. Before each weight update, to enhance the model's generalization performance, gradients are calculated for the samples, and its internal parameters are updated. The final training results are presented in Figure 5-2.

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 Figure 5-2 Single-82Factor Time Series Analysis In the single-factor model, the input gate takes the time series of BDI index price trends as the input variable. After continuous tuning of the coefficients, the model's training and actual test set prediction results are shown in the figure above. The mean squared error (MSE) of the training set is 11,440.6, with an R2 value of 0.92, while the test set prediction results yield an MSE of 223,880.3 and an R2 value of 0.79. Based on the R2 coefficient, the model demonstrates strong explanatory power for the data and exhibits a high level of predictive performance. From the analysis of Figure 5-2, the prediction results reflect the performance of the Long Short-Term Memory (LSTM) neural network across different time window strategies for both long-term and short-term forecasts. As shown in the figure, for long-term performance, the green curve represents the predicted values, and the blue curve represents the actual values. Comparing the predicted and actual values reveals that, although there is some deviation, the overall trends of the curves align closely. This indicates high prediction accuracy, with the primary upward and downward trends being fully captured. For short-term performance, the red curve represents the predicted values, while the blue curve represents the actual values. The comparison shows that although the overall trend of the curves is consistent, the predicted curve exhibits more deviations. Compared to the long-term performance, the fitting degree does not show a significant advantage. However, the prediction accuracy remains relatively high. 5.2 Comparative Analysis of Single-Factor and Four-Factor LSTM Model Results From the analysis of the above results, it is evident that the fitting degree between actual and predicted values in the four-factor model is lower, while the single-factor model demonstrates a higher fitting degree with significant predictive advantages. 5.2.1 Analysis of Causes 1. Interrelations Among Features

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 In the four-factor model, the various factors appear to have certain interrelationships. If these variables or information exhibit similarities or contain unnecessary redundancies, the model may struggle to clearly differentiate their individual impacts on the BDI index. Consequently, the fitting process might become unstable, with the model capturing only the average response among these factors 83rather than the independent effects of each. 2. Differences in Feature Importance In the single-factor model, the LSTM focuses solely on the interaction between one specific feature and the BDI index. However, in the four-factor model, the integration of multiple features introduces complexity. Features with minimal impact on the BDI index or those containing significant noise may interfere with the model's ability to learn from the more important features, thereby reducing its accuracy. 3. Complexity of the Model vs. Dataset Size The introduction of additional input features in the four-factor model necessitates more parameters to capture the relationships among these features. If the dataset is not sufficiently large to support this increased complexity, the model's performance may suffer. Moreover, an overly complex model may lead to overfitting, where it performs well on the training data but poorly on the test data. 4. Parameter and Structure Adjustment For LSTM models, the configuration of parameters (e.g., the number of hidden layers and units) and hyperparameters (e.g., learning rate and optimization strategies) is crucial for achieving good fitting quality. While it is easier to identify suitable parameters and structures in the single-factor model, the adaptability of these parameters may diminish in the four-factor model, necessitating further adjustments. 5.2.2 Solutions To address the challenges of lower fitting performance in the four-factor LSTM model compared to the single-factor model, the following optimization measures can be considered: 1. Feature Importance Evaluation Use feature selection algorithms, such as model-based feature selection or recursive feature elimination, to evaluate the contribution of each feature to the BDI index prediction. Based on importance scores, select the top-ranked features for modeling or assign different weights to each feature. 2. Increase Dataset Size or Apply Data Augmentation If the dataset size is limited, data augmentation techniques, such as sliding window sampling, data interpolation, or synthetic data generation, can be employed. Additionally, collecting more historical data or utilizing related data sources can help increase the number of training samples. 3. Feature Preprocessing and Engineering (1). Normalization or Standardization: Standardize or normalize each feature to eliminate scale differences between them.

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 (2). Encoding Categorical Features: Convert categorical features into numerical representations using encoding techniques such as one-84hot encoding or label encoding. (3). Create Synthetic Features: Generate new features by combining or transforming existing ones to capture additional useful information. (4). Model Simplification and Regularization Simplify the four-factor model by reducing the number of layers or units to better match the dataset size. Regularization techniques, such as dropout or L2 regularization, can also be employed to mitigate overfitting. 4. Hyperparameter Tuning Perform hyperparameter optimization to find the most suitable settings for learning rate, batch size, and optimizer type. This can be achieved through grid search, random search, or Bayesian optimization techniques. 5. Model Ensembling Combine predictions from multiple single-factor models, each trained on a specific feature, to create an ensemble model. This approach can leverage the strengths of each individual model while mitigating the weaknesses of the four-factor model. By implementing these strategies, the four-factor model can be optimized to achieve improved performance and predictive accuracy comparable to or exceeding that of the single-factor model. 6 Conclusions and outlook This study employs the LSTM neural network model to predict the Baltic Dry Index (BDI), revealing that the single-factor model demonstrates superior predictive performance compared to the four-factor model. The single-factor model accurately forecasts the trends of the BDI, providing a deeper understanding of LSTM neural network applications in time series forecasting. Additionally, the research offers a robust theoretical foundation for investment decision-making in the shipping market. The high precision of LSTM models in prediction enables shipping companies, traders, and investors to better comprehend market dynamics and devise more reasonable and efficient strategies for transportation and trade. Accurate predictions of the BDI not only help enterprises allocate resources more efficiently but also reduce operational costs and strengthen their competitive edge in the market. The exceptional performance of the LSTM neural network model in handling complex time series data indicates its potential for extensive applications in fields such as finance and economics. Currently, the LSTM neural network model demonstrates impressive performance in predicting the BDI index, attributed to advancements in deep learning technology. However, there remains significant potential for further optimization and refinement of these models. 1. Integrating LSTM with Other Models； Combining LSTM models with other deep learning architectures, such as Convolutional Neural Networks (CNN) and attention mechanisms, could improve predictive accuracy and enhance generalization performance.

J. Int. Eco. Glo. Gov. 2025, 2(1), 67-88 https://doi.org/10.12414/jiegg.250438 2. Incorporating Additional Feature Information: Enriching the input data by introducing more feature information can provide the model with a broader understanding of the BDI index's influencing factors. Exploring more comprehensive and relevant datasets can further reveal the patterns of BDI fluctuatio85ns and enhance prediction accuracy. 3. Advanced Optimization Techniques: Utilizing improved optimization methods and regularization techniques can increase training efficiency and reduce overfitting. These strategies would allow the model to achieve better balance between complexity and performance. Overall, research leveraging LSTM neural networks for BDI index prediction holds substantial practical potential and academic value. To deliver more precise forecasts for the shipping market, the following strategies can be adopted: Continuous Model Optimization: Refining the model architecture and hyperparameters to maximize predictive performance. Enhancing Data Accuracy: Improving data quality through better collection and preprocessing techniques. Promoting Interdisciplinary Collaboration: Encouraging cooperation across fields such as economics, computer science, and maritime studies to integrate knowledge and achieve innovative breakthroughs. Fostering Innovation in the Shipping Industry: Driving ongoing development through accurate predictions and informed decision-making. Through these efforts, LSTM-based predictive research can significantly contribute to the innovation and progress of the shipping market and related industries. Acknowledgement None. Funding Statement None. Author Contributions Wenjie Li: Writing, Original draft, Conceptualization, Methodology. Haibo Bao: Data curation, Visualization Formal analysis, Data curation, Supervision, Validation. Xinge Lei: Conceptualization, Writing–review & editing. All authors reviewed the results and approved the final version of the manuscript. Availability of Data and Materials None. Conflicts of Interest

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J. Int. Eco. Glo. Gov. Macao Scientifi Publishers（MOSP） https://www.mospbs.com/journal/jiegg 89·Article· U.S. Arctic Situational Awareness Capacity-Building: Motivations, Paths and Its Implications for China’s Promotion of the “Polar Silk Road” Bo Yang1,* 1 Institute of International Relations, China Foreign Affairs University, Beijing, China * Corresponding Authors: Bo Yang. Email: yangbo0321@163.com Received: 8 November 2024 Accepted: 5 December 2024 Published: 25 February 2025 Abstract: As the United States increasingly identifies the Arctic region as a strategic area of competition, there is a corresponding emphasis on developing situational awareness capabilities in the region. The United States' motivations for enhancing its situational awareness in the Arctic include the opportunity of climate change, the implications of great power competition and geopolitics, and the necessity of ensuring security in the region. The United States' practical paths to developing Arctic situational awareness capabilities entails collaboration with private enterprises and academic institutions, internal mechanism coordination, C5ISR capability building, joint promotion with allies, and the advancement of AI technology. China has made significant contributions to the Arctic region in three key areas: these include the governance of the Arctic, scientific exploration, and economic development. In promoting the “Polar Silk Road”，China can learn from the experience of the United States, enhance its knowledge of the Arctic environment through technological empowerment, strengthen international cooperation with Arctic countries, actively participate in Arctic governance, and strengthen its basic capabilities to cope with geopolitical competition. Against the backdrop of Trump's return, China needs to prepare for geopolitical changes, maintain flexibility and strategic certainty, and contribute China's strength to peace, stability, and sustainable development in the Arctic. Keywords: American Arctic Strategy; Situational Awareness; Arctic Governance; Polar Silk Road 1. Introduction Since the 21st century, the geopolitical situation in the Arctic region has become increasingly contentious, with the United States putting the Arctic on the track of strategic competition. On October 7, 2022, the Biden administration issued the National Strategy for the Arctic Region (NSAR 2022), which outlined the U.S. approach to the region in the context of growing great power competition. On 18 October 2023, the Biden administration published the Implementation Plan for the 2022 National Strategy for The Arctic Region (2022 Arctic Strategy implementation plan), and in July 2024, the U.S.

J. Int. Eco. Glo. Gov. 2025, 2(1), 89-103 https://doi.org/10.12414/jiegg.250439 Department of Defense (DoD) launched the 2024 DoD Arctic Strategy. U.S. Arctic situational awareness capabilities are emphatically highlighted in these reports, and relevant content repeatedly appears in these 90reports. Current academic research on U.S. Arctic strategy focuses on the historical evolution of U.S. Arctic strategy, the latest trends, the interpretation of the U.S. government's overall Arctic strategy, and issue-specific Arctic policy analyses. First, a number of studies have focused on the historical evolution of the U.S. Arctic strategy, from which regular explanations are sought. Some scholars value the importance of international cooperation (S Haycox, 2020), while most agree that the main consideration of US Arctic strategy is security (WANG, 2020; CAI, 2023). Secondly, a number of studies have focused on the analysis of Arctic policies implemented by a specific US administration. Some scholars have conducted an analysis of the Obama administration's Arctic strategic framework from three distinct perspectives: the strategic value of the Arctic region, the necessity of aligning interests, and geopolitics (LIU, 2014; SUN & YANG, 2016). In the context of the Trump administration, research has concentrated on the influence of the 'America First' philosophy on Arctic policy (XIN & ZHANG, 2021; SON & GENG, 2021). Thirdly, a number of studies have followed the latest trends in United States Arctic policy. After the Russian-Ukrainian conflict, some scholars believe that the Arctic will become an important arena for the United States to promote a “Rules-Based International Order” (XU, 2023). Fourthly, a number of scholars have conducted detailed examinations of specific topics within the field of U.S. Arctic policy. This area of study encompasses both internal mechanisms and external system building. The internal mechanisms include the scientific community, think tanks, and the role of the U.S. Coast Guard, among others (HUANG et al., 2023; SON, 2023; WU, 2024). At the external level, numerous scholars have contributed to the study of factors such as the formation of alliances, geopolitical dynamics, and climate and environmental change (JIANG, 2023; M Paul, 2023; VN Konyshev & AA Sergunin, 2022). The majority of extant research concentrates on the particular policy initiatives of the United States government in the Arctic region. Conversely, there is a paucity of attention devoted to the investment and development of the United States in high-technology fields in the region, particularly the construction of situational awareness capabilities. It is evident that situational awareness capabilities, a pivotal element of U.S. strategic forces in the Arctic, offer meticulous technical assistance for strategic decision-making and bolster its responsiveness to potential threats and opportunities in the Arctic. The United States employs effective situational awareness to monitor environmental changes, military dynamics, and other security threats in the Arctic region in real time. This enables the achievement of strategic objectives in a complex international situation. Consequently, an exhaustive examination of the United States' construction of situational awareness capability in the Arctic region will not only elucidate the technical foundation of its Arctic strategy but also furnish invaluable lessons for China's proposal of the "Polar Silk Road" as well as its involvement in the governance and development of the Arctic.

J. Int. Eco. Glo. Gov. 2025, 2(1), 89-103 https://doi.org/10.12414/jiegg.250439 2. 91The United States' Motivations for Enhancing Arctic Situational Awareness Capacity Arctic situational awareness can be defined as the process of establishing a comprehensive understanding of the Arctic region, including the potential impact of Arctic-related conditions on U.S. security, the economy, and the environment. This understanding is crucial for effective decision-making and response strategies. The United States government considers the construction of an enhanced Arctic situational awareness capability to be conducive to more effective Arctic policymaking and to provide a fundamental capability for responding to climate change and great power competition. The range of opportunities presented by climate change, great power competition, and geopolitics, as well as the necessity for United States security in the Arctic, have motivated the United States to build situational awareness capabilities in the Arctic. 2.1 Opportunities Arising from Climate Change The Arctic is undergoing rapid climate change, which is resulting in the gradual melting of the ice. According to the American Science Association, since 2012, the Arctic has had almost no perennial ice remaining for more than four years. A U.S. Department of Defense report suggests that the Arctic could potentially have ice-free summers as early as 2030. Driven by climate change, the region will see new opportunities, including richer fisheries, more navigable Arctic shipping lanes, and more easily exploitable hydrocarbon resources. The accelerated melting of sea ice in the Arctic due to climate change is increasing the navigability of Arctic shipping lanes, enhancing the strategic value and economic potential of the Arctic region, which will require enhanced situational awareness to protect its resource interests in the Arctic and to participate in rule-making. Responding to the range of environmental and ecological issues posed by climate change is also placing greater demands on the U.S. Arctic science detection system. 2.2 Increased Great Power Competition and the Return of Geopolitics The United States is seeking to enhance its situational awareness capabilities in the Arctic, with the objective of tackling the return of great power competition and geopolitics. The United States posits that the Arctic's growing strategic importance is a primary driver of increased competition in the region. This is largely attributed to the heightened activity of China and Russia in the Arctic. The United States is seeking to reinforce its dominant position in the context of growing strategic competition. Russia has persisted in bolstering its military presence in the Arctic, encompassing the reinforcement of the Arctic region's strategic importance in national defense, the advancement of maritime capabilities, the enhancement of its situational awareness in the region, the expansion of the Northern Fleet, and the approval of the 2022 Maritime Code of the Russian Federation. These actions undoubtedly reinforce U.S. threat perceptions of Russia in the Arctic. China's normal activities in the Arctic have also given rise to concerns among the United States about its own security in the region. Some politicians in the United States have accused China of dramatically increasing its economic

J. Int. Eco. Glo. Gov. 2025, 2(1), 89-103 https://doi.org/10.12414/jiegg.250439 development and scientific research activities in the Arctic over the past decade with the actual purpose 92of military involvement. 2.3 The Security Needs of US Arctic Interests The absence of suitable situational awareness and communication capabilities not only impairs the U.S. military's capacity to respond to competitors' activities in the Arctic but also undermines the U.S. ability to protect its Arctic interests as a whole. The distinctive environment of the Arctic region gives rise to a heightened need for security measures in this region. The continuous exposure of sparse infrastructure to extreme weather conditions, restricted satellite coverage, and distinctive electromagnetic phenomena that impair communication quality pose significant challenges to U.S. capabilities in the Arctic. The United States has historically encountered a dearth of capabilities in the Arctic region. The U.S. Coast Guard has repeatedly asserted that it lacks an adequate number of polar icebreakers, thereby limiting its capacity to provide robust and effective security services for US interests in the Arctic. 3. The Practical Path of the United States to Build Situational Awareness Capability in the Arctic Region The U.S. government has explicitly highlighted the importance of enhancing the resilience of the Arctic region in numerous strategic documents, emphasizing the necessity to bolster situational awareness capabilities in the region. The 2024 DoD Arctic Strategy outlines a plan to enhance the construction of Arctic situational awareness capabilities, including C5ISR, through a range of approaches. These strategies exhibit a multifaceted and pragmatic character. As far as the main body of construction is concerned, the United States not only emphasizes capacity building at the government level but also actively promotes public-private partnership construction and joint development with allies. In terms of construction content, the program encompasses the construction of scientific systems for the purpose of climate and environmental governance at the non-traditional security level, as well as the construction of military situational awareness systems at the traditional security level. 3.1 Arctic Situational Awareness Capacity-Building in Cooperation with Corporate Universities and Internal Coordination The United States depends on the collaboration between companies and research institutions to transform cutting-edge technologies into practical situational awareness tools. The collaboration between companies and universities has resulted in innovations in sensor technology, AI algorithms, and unmanned aerial and satellite systems. To illustrate, Lockheed Martin and the Massachusetts Institute of Technology have collaborated to develop remote sensing technology that can more accurately monitor changes in the polar environment, thereby assisting the defense sector in better understanding the situation in the Arctic. The Alaska Center for Climate Assessment and Policy (ACCAP) at the University of Alaska Fairbanks established a sustained scientific study of the Alaska region and conducted long-term trend analyses (1957-2021) of key Alaskan climatic parameters, including temperature, precipitation, and sea ice, which informed the U.S. Fifth National Climate Assessment. The Department of Homeland Security (DHS), with more than fifty partners, including corporate university government agencies, has undertaken the Arctic Domain Awareness Center

J. Int. Eco. Glo. Gov. 2025, 2(1), 89-103 https://doi.org/10.12414/jiegg.250439 (ADAC) program in the hope of improving situational awareness and crisis response capabilities to address emerging maritime challenges posed by the dynamic Arctic environment. The U.S. National Oceanic and Atmospheric Administration (NOAA) established the U.S. Arctic Observing Network (U.S. AON) to develop a platform for sustained and integrated scientific observations of the rapidly changing Arctic environment and to make targeted recommendations on the regional and global environmental 93risks it poses. The United States is also working on intergovernmental coordination and resource integration to increase the ability to coordinate the building of polar situational awareness. The United States seeks to provide efficient resource coordination among agencies such as the Department of Defense, the Department of Homeland Security, and the intelligence community to optimize the allocation of resources for Arctic situational awareness capacity-building, reduce duplication, and establish a network of systems. The United States has been implementing enhancements to its leadership structure for Arctic affairs. During the Trump administration, the U.S. State Department established the position of U.S. Coordinator for Arctic Affairs. In contrast, the Biden administration has nominated an ambassador for Arctic regional affairs, who will assume the role of coordinating Arctic foreign affairs. In addition, the United States uses the Arctic Executive Steering Committee (AESC) as a mechanism to promote U.S. Arctic interests and coordinate federal actions in the Arctic, and its members include the undersecretaries of the relevant U.S. departments, such as the Departments of State, Defense, and Homeland Security, and the Office of the Director of National Intelligence, among others. In terms of specific actions, the Ted Stevens Center for Arctic Security, which was established on 9 June 2021 at Joint Base Elmendorf-Richardson in Anchorage, Alaska, integrates the U.S. Departments of Defense, the Defense Security Cooperation Agency, and NORTHCOM with the objective of providing intellectual support for U.S. defense affairs in the Arctic. The Center's key mission is to enhance situational awareness and capacity building in the Arctic. Furthermore, the Centre has established the School of Arctic and Climate Security Studies, which aims to enhance the comprehension and professional advancement of Arctic security practitioners, encompassing both military and civilian roles, on a spectrum of security matters pertaining to the Arctic and regional climate. 3.2 U.S. Army C5ISR Capacity Building in the Arctic Region In 2024 DoD Arctic Strategy, a major operational orientation is the development of C5ISR capabilities for command, control, communications, computers, networks, intelligence, surveillance, and reconnaissance, in addition to improving knowledge of the electromagnetic spectrum, among other things. Depending on the domain, the United States is progressively improving its Arctic-wide C5ISR sensing network of sea, land, air, space, and electromagnetism. In the sea-based domain, the US Naval Research Laboratory (NRL) has developed ice-tethered acoustic buoys (IBAs) to monitor the changing acoustic and oceanic environment of the Arctic. They use buoys to provide real-time monitoring and operational capabilities in the Arctic environment, as well as under-ice acoustic communications and navigation capabilities for mobile platforms such as ocean gliders and underwater autonomous vehicles. The Assured Arctic Awareness (AAA) program of the US Defense Advanced Research Projects Agency

J. Int. Eco. Glo. Gov. 2025, 2(1), 89-103 https://doi.org/10.12414/jiegg.250439 (DARPA) is developing new technologies for advanced distributed sensor systems to monitor the Arctic ice surface and subsurface to provide full-94time situational awareness. In the air-based domain, the US Department of Defense claims that by the 21st century and 30s, the US and its Arctic allies will have more than 250 multi-purpose combat aircraft processing Arctic data to improve Arctic data coverage and capabilities. The University of Maine and the U.S. Air Force (DAF) have also completed a partnership on Arctic research that aims to improve the nation's ability to monitor the Arctic. The University of Maine will form the team that will evaluate current methods, research techniques, sensors, and perception systems used in the U.S. Air Force Weather Agency to observe and predict weather patterns that affect Air Force operations. In the land-based domain, improving Arctic infrastructure and environmental resilience has become an important underpinning of the U.S. C5ISR buildout. In the U.S. Department of Defense Climate Adaptation Plan, it is stated that the North American Aerospace Defense Command and U.S. Northern Command staffs are working on operational standards for the Arctic Fuel Supply Chain Distribution System (AFSCDS) to better understand its deficiencies and advocate for future Arctic infrastructure development to enhance resilience to climate change. In the space domain, the United States Department of Defense, in partnership with commercial satellite operators such as SpaceX, Iridium, and OneWeb, is attempting to build a high-coverage, high-bandwidth, high-availability communications capability in the Arctic using low-Earth-orbit (LEO) satellites. In the electromagnetic domain, the United States Space Force has also emphasized the modernization of Arctic-related space assets and overcoming the unique orbital mechanics and electromagnetic barriers of the Arctic through technology development and capacity building. 3.3 Work with Allies to Build Arctic Situational Awareness Collaboration among allies to build an Arctic situational awareness system not only reduces the U.S. technical and cost burden but also promotes alliance relations and helps the U.S. lead Arctic governance, which encompasses not only bilateral joint construction but also multilateral joint research programs as well. For example, the United States, together with NATO allies such as Norway, has developed the Integrated Remote Sensing System for the Arctic (IRSA), which is used to optimize Arctic remote sensing data acquisition and decision support analysis, communications, and enhanced navigation. The IRSA platform system integrates communications and remote sensing satellites, high-, medium-, and high-altitude long-endurance manned aircraft, unmanned aircraft, and observation facilities such as submarines and surface vehicles. On 24 March 2023, Biden and Canadian Prime Minister Trudeau issued a joint statement to modernize and upgrade the surveillance systems of the North American Aerospace Defense Command, including, among other things, the procurement and deployment of a next-generation radar system with polar coverage.

J. Int. Eco. Glo. Gov. 2025, 2(1), 89-103 https://doi.org/10.12414/jiegg.250439 At the multilateral level, the United States is also committed to working with Arctic allies to advance Arctic situational awareness capabilities. During the Obama years, the United States, along with Canada, Denmark, Finland, New Zealand, Norway, and Sweden, formed the International Cooperative Polar Research Participation Programme (ICE-PPR). The program, under the primary responsibility of each country's defense ministry, aims to leverage their respective research and technology development capabilities to improve defense capabilities and joint warfighting requirements through new and emerging technologies, and one of the key areas of focus is Arctic situational 95awareness capability cooperation. 3.4 Enhanced AI technology Enablement for Arctic Situational Awareness Capabilities The U.S. government is using machine learning and other AI technologies to optimize its Arctic situational awareness system in order to strengthen the situational awareness capabilities it needs to achieve its Arctic strategic objectives. In July 2023, the U.S. Coast Guard (USCG) icebreaker Healy crossed the Arctic and captured a large number of images, the data from which will be used to develop artificial intelligence tools, in particular the application of computer vision for automated analysis in the Arctic environment. A team of researchers led by MIT's Lincoln Laboratory used these image datasets to train AI to help improve its ability to provide situational awareness of Arctic waters. The United States government has employed the use of artificial intelligence-enabled Arctic situational technologies with the objective of enhancing its Arctic military situational awareness capabilities. The United States, in collaboration with its NATO allies, has established the Andøya Space Surveillance and Sensing project in the Arctic. This initiative encompasses a significant investment in satellite, drone, unmanned ship, and unmanned submarine technologies, with the objective of enhancing military surveillance capabilities and facilitating the real-time exchange of data on enemy vessels, aircraft, and submarines with NATO allies. Furthermore, the United States is employing AI technology to augment the implementation of situational awareness capabilities in Arctic communities, particularly in the domains of environmental security and animal protection. The Polar Bears International team in the United States employed artificial intelligence (AI) technology and radar systems to develop a system, colloquially termed a "bear-dar," that monitors the approach of any animal to a human community. This allows sufficient time for humans to utilize non-lethal deterrents to repel the animal, thereby reducing the threat to the safety of community members and the risk of harm to endangered animals. The Alaska Fisheries Science Center has also developed artificial intelligence systems to monitor ice seals, polar bears, and other mammalian marine animals photographed during aerial surveys of Arctic sea ice, allowing for more rapid assessments of Arctic mammal populations and more effective conservation plans. Artificial intelligence vision tools are being used to help the United States Coast Guard plan guard missions and automatically analyze images at sea, adding to the effectiveness of the Cold Regions Imaging and

J. Int. Eco. Glo. Gov. 2025, 2(1), 89-103 https://doi.org/10.12414/jiegg.250439 Surveillance Platform (CRISP), jointly developed by the Coast Guard and Lincoln Laboratory, in 96combating illegal fishing. 4. China's Efforts and Contributions to Arctic Development and Governance China has historically demonstrated a keen interest in matters pertaining to the polar regions. It has actively engaged in, contributed to, and continues to play a pivotal role in Arctic affairs. China's stance on the Arctic is one of commitment to the promotion of peaceful development and global governance. Additionally, it strives to contribute Chinese wisdom and Chinese power to the development of the Arctic. In May 2013, China was formally designated as an official observer state of the Arctic Council. In December 2017, the concept of the “Polar Silk Road” was proposed. This initiative aims to facilitate cooperation with Arctic countries with a view to developing shipping lanes, promoting maritime trade, and facilitating infrastructure construction in the region. 4.1 China's Participate in Arctic Governance In 2018, China published a white paper titled “China's Arctic Policy”, which explicitly delineates China's Arctic policy objectives, which may be summarized as follows: “participation in, understanding of, protection of, and use of the Arctic.” China plays an active role in the formulation of international norms and standards pertaining to global environmental governance, climate change, marine resources, and fisheries management and is committed to fulfilling its associated obligations. China is committed to conducting its Arctic activities within the framework of existing international law, including the Charter of the United Nations, the United Nations Convention on the Law of the Sea, multilateral treaties on climate change and environmental protection, and the relevant rules of the International Maritime Organization. China promotes maritime safety and environmental protection within the International Maritime Organization, advocates technical cooperation with the objective of reducing greenhouse gas emissions from shipping, and has participated in the negotiation of international instruments on biodiversity conservation. 4.2 China's Scientific Expedition to the Arctic The year 2024 will mark the 40th anniversary of China's polar expedition, and China has been committed to making a significant contribution to Arctic scientific research and study. China has currently organized 14 expeditions of a scientific nature in the Arctic region. Furthermore, in July 2004, the Yellow River Station was established in the Arctic, and in July 2019, the MV Xue Long 2, which was the first polar icebreaker to be constructed independently by China, was delivered and put into use. China has assumed a pioneering role in the implementation of international cooperation programs, including the Joint Exploration of the Mid-Ocean Ridge of the International Arctic Ocean, the joint surveys of the East Siberian Sea with Russia, and the international cooperative expeditions and scientific research initiatives undertaken in collaboration with the United States, Canada, Russia, Finland, and numerous other countries. China's scientific expeditions to the Arctic have encompassed a range of

J. Int. Eco. Glo. Gov. 2025, 2(1), 89-103 https://doi.org/10.12414/jiegg.250439 disciplines, including climate change, marine biodiversity, geology, and the environment. These endeavors have made significant contributions to the maintenance and promotion of peace, stability, 97and sustainable development in the Arctic. 4.3 China's Arctic Economic Development China persists in its efforts to advance economic growth in the Arctic region. With regard to mineral investment, Chinese enterprises have been making incremental efforts to invest in the Arctic mining industry, with participation in the operation of 13 projects, primarily in Denmark (Greenland), Canada, and the United States. With regard to oil and gas resources, the Chinese Yamal project was initiated in 2017. This represents the inaugural mega energy cooperation project implemented in Russia subsequent to China's proposal of the “Polar Silk Road” initiative. Following the successful implementation of the Yamal project, the Arctic LNG 2 Project was officially initiated in September 2019. In the context of waterway development, the Nordic countries of Finland, Iceland, and Norway undertook their inaugural joint visit to China in 2018, expressing their desire for enhanced Arctic cooperation with China in the realms of climate change response, maritime waterways, undersea fiber optic cables, and ecology. In August 2024, the China-Russia Sub-Committee on Arctic Waterway Cooperation was established with the specific objective of promoting the development of the Arctic waterway. Despite the current suspension of China's involvement in the Arctic economic development initiative for various reasons, the underlying potential for Chinese engagement in this field remains significant. 5. U.S. Arctic Situational Awareness Capacity Building Implications for China's Promotion of the Polar Silk Road In promoting the 'Polar Silk Road' initiative, China can draw on the experience of the United States in developing situational awareness capabilities in the Arctic region. This was achieved through the utilization of technology, international collaboration, active involvement in Arctic governance, and the enhancement of fundamental capabilities. This approach enabled a more effective response to the evolving challenges and changes in the Arctic region. 5.1 Enhancing Environmental Awareness in the Arctic with Technology Utilization Awareness of environmental changes in the Arctic can be significantly enhanced through technology Utilization. The United States has placed special emphasis on the importance of technological empowerment in the construction of situational awareness capabilities in the Arctic, especially when it comes to the application of artificial intelligence technology. China can learn from this practice, strengthen the application of AI technology in this field, establish a green and intelligent polar three-dimensional monitoring network through the development of air-, ice-, and sea-based intelligent observation equipment, and enhance its ability to monitor Arctic climate change, sea ice melting, and other environmental changes. At the same time, it has strengthened cooperation with

J. Int. Eco. Glo. Gov. 2025, 2(1), 89-103 https://doi.org/10.12414/jiegg.250439 scientific research institutions at home and abroad and made use of advanced remote sensing technology, ocean observation technology, and environmental monitoring technology to enhance its ability to monitor and recognize environmental changes in the Arctic. This will not only help China to better understand and adapt to the Arctic environment but also provide a scientific basis for China's shipping, 98resource development, and scientific research in the Arctic. 5.2 Promote International Cooperation in the Arctic Through Technical Exchanges and Data Sharing In promoting the construction of the “Polar Silk Road”, China can promote international cooperation and jointly address the challenges of Arctic governance by strengthening technical exchanges and data sharing with Arctic countries. China could play an active role in the international governance of the Arctic. This can be achieved by establishing and participating in multilateral cooperation platforms, which would facilitate technical exchanges and data sharing with Arctic countries and other stakeholders. Such platforms could take the form of joint expeditions, the construction of field observation stations, and the sponsorship of large-scale scientific programs. Such an approach would not only facilitate the acquisition of further information on the Arctic environment and resources but would also contribute to the establishment of strategic mutual trust in the Arctic region, the promotion of international cooperation, and the joint addressing of the challenges posed by changes in the Arctic environment. 5.3 Promoting the “Polar Silk Road” Agenda Through Active Participation in Arctic Governance The United States' establishment of an international collaborative mechanism in the context of Arctic governance serves as a model for China's potential involvement in this field. As an observer state to the Arctic Council, China has the potential to promote regularity through active participation in Arctic governance, thereby facilitating coordination and cooperation in areas such as climate change, the protection of indigenous cultures, and scientific research. Concurrently, China should demonstrate respect for the sovereignty, rights, and interests of Arctic countries in matters pertaining to the Arctic. Furthermore, it is imperative that China advocate for the establishment of a fair and reasonable Arctic governance mechanism. Additionally, China must address the current shortcomings of Arctic governance, including the compartmentalization and exclusion of regional and multilateral governance, the deficiencies in the provision of institutional global public goods, the lack of convergence and coherence between internal and external rules, and the transmission of "high-political" rules to influence "low-political" rules. The objective is to facilitate the construction of the “Polar Silk Road” by ensuring the provision of effective public goods for the governance of the Arctic.

J. Int. Eco. Glo. Gov. 2025, 2(1), 89-103 https://doi.org/10.12414/jiegg.250439 5.4 Strengthen Basic Capabilities to Cope with the Arctic Geopolitical C99ompetition In capacity-building efforts in the Arctic with regard to situational awareness, the United States has placed particular emphasis on the importance of basic capabilities, including communication, surveillance, and reconnaissance needs, as well as solutions to the problem of poor communication signals in the Arctic. As China advances the concept of the “Polar Silk Road”, it is essential that it concurrently enhances its foundational capabilities. This entails, inter alia, the modernization of its polar icebreaking fleet, the reinforcement of polar scientific research and technological innovation, and so forth. The objective is to equip China with the means to navigate the challenges of Arctic geo-competition and environmental degradation while ensuring the security and efficiency of its maritime trade routes. By implementing these measures, China can more effectively protect its interests in the Arctic region, thereby establishing a robust foundation for the sustained operation of the “Polar Silk Road”. 6. Conclusion The return of Donald Trump to power in the 2024 US presidential election introduces a significant degree of instability to the future governance of the Arctic. It will be challenging for the region to revert to a system of assisted governance, and the prevailing geopolitical climate is likely to remain volatile. In Trump's first term, the US Arctic policy has generally embodied distinctly conservative and isolationist colors, emphasizing resource development, national security, and economic growth while relatively neglecting the topics of environmental protection and climate change. First, the Trump administration has emphasized the development of energy resources in the Arctic, particularly in Alaska. In 2017, the Trump administration eased restrictions on resource extraction in Alaska's Arctic National Wildlife Refuge (ANWR) and pushed for oil and natural gas exploration in order to promote US energy independence and economic growth. Second, the Trump administration views the Arctic as a geopolitically competitive strategic region and has intensified its focus on Arctic military presence. The Trump administration has intensified its military deployments to the Arctic, military exercises, and cooperation with allies. Third, the Trump administration has taken a very conservative stance on climate change, denying climate change, withdrawing from the Paris Climate Agreement, and deregulating environmental regulations on Arctic energy extraction. Fourth, the Trump administration's Arctic foreign policy emphasizes the primacy of US interests and reduces multilateralism and international cooperation. The Trump administration's support for international organizations such as the Arctic Council has been more limited, and cooperation on environmental protection and climate change, in particular, has been less active than under previous administrations. The Trump administration prefers to negotiate bilaterally with other Arctic states rather than relying on multilateral frameworks. Fifth, the Trump administration supports increased development of Arctic shipping lanes, particularly the use of the Northeast Passage, and Trump has proposed increased investment in U.S. Arctic infrastructure to enhance U.S. strategic influence and economic interests in the region.

J. Int. Eco. Glo. Gov. 2025, 2(1), 89-103 https://doi.org/10.12414/jiegg.250439 In light of the Trump administration's probable inclination towards unilateralism and a hard-line stance towards China, it is imperative for China to anticipate and prepare for potential geopolitical shifts. This entails the reinforcement of bilateral relations with other Arctic countries, in addition to the safeguarding of China's interests and influence within the multilateral framework. It would be prudent for China to maintain flexibility and strategic patience while remaining vigilant against potential shifts in U.S. Arctic policy. This approach would allow China to gradually promote multilateralism and the rule of law in Arctic governance through long-term cooperation and dialogue. China should have a clear understanding of the evolving patterns and characteristics of the Arctic region. This understanding should inform the implementation of China's Arctic policy, which should, in turn, facilitate the building of a community of human destiny. Communication and cooperation with relevant parties in the fields of energy development, waterway management, scientific research, and ecological protection should be strengthened. New areas and opportunities for cooperation should be constantly explored, and a blue partnership should be actively built. The “Polar Silk Road” should be promoted to achieve more positive results. We will continue to identify new areas of cooperation and opportunities, actively build a blue partnership, promote the “Polar Silk Road” to achieve more positive results, and contribute China's 100strengths to the peace, stability, and sustainable development of the Arctic region. Acknowledgement None. Funding Statement None. Author Contributions The author confirms sole responsibility for the following: study conception and design, data collection, analysis and interpretation of results, and manuscript preparation. Availability of Data and Materials None. Conflicts of Interest The authors declare that they have no conflicts of interest to report regarding the present study. References [1]. Haycox, S. (2020). Arctic policy of the United States: An historical survey. The Palgrave handbook of Arctic policy and politics, 233-250. [2]. Wang, C. (2022). A Study on the Evolutionary Trend of the U.S. Arctic Strategy. Northeast Asia Forum. 31(03), 79-82.

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