Subversion or Seduction? Holding China’s Economic Statecraft Accountable

Audrye Wong is a Grand Strategy, Security, and Statecraft Postdoctoral Fellow at MIT’s Security Studies Program and the Harvard Kennedy School, and an incoming assistant professor of political science and international relations at the University of Southern California. Her research examines how states use non-military means, including economic and informational tools, to gain geopolitical influence. Her current book project, Subversion or Seduction? Holding China’s Economic Statecraft Accountable, examines the strategies and effectiveness of economic statecraft.

China’s relatively new economic clout has allowed it to use economic statecraft to persuade countries into doing its bidding. With Xi Jinping’s announcement of the Belt and Road Initiative in 2013, economic statecraft has been brought to the forefront of Chinese foreign policy. When is economic statecraft effective, and what are the implications of China’s economic statecraft for great power competition and the future of the international order? Dr. Wong seeks to answer these questions.

The success of economic statecraft in changing a target state’s behavior depends on the interaction between: (i) the sender’s inducement strategy and (ii) the target’s level of public accountability. The two types of inducement strategies are subversive carrots and legitimate seduction. “Subversive carrots” refers to bypassing proper bidding and regulatory approval procedures to solicit bribes or kickbacks to politicians, whereas legitimate seduction entails adherence to political processes and institutional standards.

Dr. Wong predicts that subversive carrots are only effective in target states with low public accountability, while legitimate seduction is only effective in target states with high public accountability. Subversive carrots fail in states with high public accountability because public awareness inevitably leads to backlash and institutional enforcement which constrains the behavior of political leaders. In states with low public accountability, however, a lack of transparency, oversight, and political constraints allows political elites to align with the sender state and increase policy cooperation. The opposite is true for legitimate seduction.

There are a number of possible alternative explanations for the success of economic statecraft, including economic interdependence. However, China’s subversive carrots backfire in countries with and high public accountability and high economic interdependence with China, such as the Philippines. In the mid-2000s, China invested nearly $2 Billion dollars in infrastructure projects in the Philippines, bypassing the competitive bidding process and involving the Philippine president and his allies in corruption. The press and general public demanded accountability, prompting a year-long Senate investigation, corruption charges, impeachment attempts, and the ultimate cancellation of the Chinese-financed projects. This marked a major setback for China’s foreign policy goals, as it led to the lapse of the JMSU agreement and caused the next Philippine president to be warier of China.

Dr. Wong’s research has a number of important takeaways and implications. It provides a new theoretical framework to explain the varied success of economic inducements within and across countries, marks the first disaggregation of inducement strategies, and highlights the important interactions between the sender’s foreign policy and the target’s domestic political conditions. Her research shows how economic capabilities translate into geopolitical influence and explains the challenges China has faced in the pursuit of geopolitical influences.






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