Executive Summary

As the second largest economy in the world, the biggest international trader, the holder of the largest amount of foreign reserve, and one of the most rapidly growing economies, China has emerged as an economic powerhouse. International reaction towards China’s growing economic power is mixed with expectations and anxieties. Much of the anxieties originate from the uncertainties of how China will use its economic leverages for the pursuit of its strategic, political, and security objectives.

Speakers from different backgrounds intensively discussed various ways that China is using economic tools to achieve its policy goals. The workshop started with an overview of the concept of China’s economic statecraft and laid a solid theoretical foundation to guide the rest of the discussions. The session on China’s economic power and major foreign policy issues focused on China’s use of economic statecraft in advancing Sino-U.S. relations, securing energy and food resources overseas, gaining bigger roles in international financial institutions Intellectual Property Rights issues as well as in protecting China’s interests over.

Discussions on China’s core Interests and economic statecraft delved into China’s management human rights dispute with EU, Cross-Strait relations, maritime boundary and territorial disputes in the East and South China Seas and its effectiveness. The last session touched on the use of China’s economic tools in its international partnerships, particularly in Sino-North Korea relations and in Sino-Africa relations.

Workshop participants engaged in an exchange of views on China’s multi-dimensional economic statecrafts. Some of the key findings are as follows:

1. Even though for the long time, China has employed political, diplomatic, and in some cases, even military tools to advance its economic interests in foreign countries. There is clear evidence showing that the trend is reversing. China is more willing to use economic and technological clout to pursue other interests.
2. Although China may continue to feel more comfortable to use economic benefits as a tool to change the policies and behaviour of other countries, it may resort to coercive economic tools for signaling and for punishment from time to time.
3. The defensiveness of Chinese foreign policy is gradually giving way to a growing self-confidence in Beijing’s economic and political clout to advance its interests in the international arena.
4. The effectiveness of China’s development of economic statecraft depends on a variety of factors such as coordination among different domestic actors, the level of economic dependence, and reactions from other major powers.
5. While China apparently has utilised its aggregate economic power to enhance its position in the global and regional affairs, this has been a gradual and slow process.