Coercive Statecraft in Disguise: China’s Threat Assessment of Economic Linkages

• In Event: Economic, Military, and Institutional Intervention in Great Power Competition

Abstract

Under what circumstances does the target state make political concessions to China’s coercive economic statecraft? This paper investigates this question by comparing China’s dispute with South Korea over the THAAD deployment in 2016-17 and its trade conflict with Australia in 2020. One of the most important patterns emerging in today’s global politics is the frequent use of economic coercion as a strategic tool in geopolitical rivalry. In the guise of domestic regulatory moves, China’s economic coercion evolved as a new diplomatic experiment in this century. Taking a domestic politics approach, I propose a new theoretical perspective to explain to the tactical outcome of China’s coercion focusing on the target country’s threat assessment of economic linkages with China. I argue that such preexisting assessments shape how political elites and the public in the target country translate economic grievances into political accountability of the crisis. When the target already had an adversarial threat perception, the coercion would likely reinforce that, and thereby compelling decision-makers into a rather hardline negotiating position. Drawing on an original dataset of economic coercion involving China as initiator since 2001, I compare the responses from South Korea and Australia based on a “most-similar systems” design. The paper concludes that as China seeks to lock in its perceived advantages as a global power by coercive economic tactics, heightened threat perception of economic linkages undermines its capacity to coerce, deter, and compel.

Author

• Gloria Xiong, Cornell University