China’s Coercive Economic Diplomacy

Bonnie S. Glaser in the Diplomat reports on ASEAN’s failure to reach an agreement on the wording of a joint communiqué for the first time in 45 years. In so doing, she points out pundit commentary blaming ASEAN’s chair, Cambodia, for failing to reach consensus. Conflict reportedly occurred when China protested to keep the recent standoff with the Philippines in the Scarborough Shoal out of the statement. She reports:

Beijing has provided billions in aid to Cambodia.  In 2011 alone the amount of foreign investment pledged to Phnom Penh by China was 10 times greater than that promised by the United States. For more than a decade, China has pursued a strategy in Southeast Asia that relied heavily on economic carrots to increase the stake of the Southeast Asian countries in maintaining good relations with China.

The China-ASEAN FTA, Chinese foreign direct investment, foreign assistance, and trade have all been used to encourage countries to consider Beijing’s interests when formulating policies and eschew actions that China would view as objectionable.  In the past few years, however, China has directly used economic relations to compel target countries to alter their policies.  And this growing trend is worrisome.

She goes on to address the recent economic sticks utilized against the Philippines fruit exports to China, 2010’s action to block rare earth exports to Japan as well as Beijing’s actions to curb salmon imports from Norway during the Liu Xiaobo episode.

Diplomat 25JUL12

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One thought on “China’s Coercive Economic Diplomacy

  1. Pingback: China’s use of economic stick is troubling « China Daily Mail

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