One Chinese size fits all? Response to Allison and Blackwill

One Chinese size fits all? Response to Allison and Blackwill

On January 28th the Financial Times published a piece by Harvard’s Graham Allison and CFR’s Robert Blackwill entitled Beijing still prefers diplomacy over force. This piece makes claims about China’s use of economic coercion as a strategic tool against the Philippines and Japan while acknowledging that China understands that its growth depends on imports.

The latest trade figures, according to Allison and Blackwill, show a 20% drop in exports to China from the Philippines in the past year and a 16% drop in exports from Japan while exports from other nations in the region have been rising. Allison and Blackwill assert that, “As Manila and Tokyo have become vocal about their claims to the Spratly Islands and what the Japanese call the Senkaku Islands (Diaoyu to the Chinese), China is using its economic power to send them a message.” Ostensibly then, China can impose economic sanctions simply by denying access to its market of 1.3 billion people.

Allison and Blackwill’s Philippines assertion is built on relatively solid ground: at the height of the Philippine-Chinese standoff over the Scarborough Shoal, China imposed a series of travel bans as well as punitive nontariff barriers against the Philippines’ banana exports, valued at $200 million. However, the idea that China’s responded to the Senkaku/Diaoyu incident with economic coercion is shakier. Anti-Japanese protests in more than 80 Chinese cities suggested that the Chinese leadership approved of the outpouring of nationalism, though in part as insulation against criticism of the party itself during the transition of power. Regardless, the Chinese government quickly reversed its approval. “Patriotism is a noble act, but protestors should avoid any irrational or violent behavior,” the official Xinhua News Agency editorialized in a story with the headline, “Irrational, violent anti-Japanese protests should be avoided.” In September 2012, economic growth slowed to its lowest level since the global financial crisis as a result of the Sino-Japanese flareup. According to Hu Shuli, one of China’s chief economic journalists, so many Chinese workers are employed at Japanese-owned companies that the escalation of tensions could lead to significant job losses. These aspects gave Beijing an incentive to soothe tensions with Tokyo and pressured a careful response.

China’s reported economic coercion lies in contrast to Allison and Blackwill’s quoting of Lee Kuan Lew: “China understands that its growth depends on imports, including energy, and that it needs open sea lanes.” Then can we take away that Beijing still prefers diplomacy over force? While China clearly responded to the Philippines with economic coercion, Beijing qualified its economic threat to Japan in its subdual of protest. Of note is China’s comparative trade relationships with the Philippines and Japan: $30 billion vs. $341 billion, respectively, in 2011. Clarifying and softening Allison and Blackwill’s assertions, we are left with a China that appears to be measuring its capacity to apply its economic coercion rather than foolhardily sanctioning any and all irritants. Allison and Blackwill suggest that fulfilling China’s intention to become the greatest power in the world will require that Beijing “exercise greater caution and subtlety than it has shown recently, in order to avoid an accident or blunder.” While one must be careful to not give Beijing too much undeserved praise, the re-analysis of Allison and Blackwill’s argument suggests that China may be making more progress than it has received credit for through its weighing of economic give-and-take. While this behavior has not yet resolved the security dilemma, it does foster hope that Beijing can behave as a rational actor on the security plane.

Categories: Asia Pacific, Politics

About Author

Taylor Wettach

Taylor is a participant in the Government of Japan-administered Japan Exchange and Teaching (JET) Program. Previously, Taylor worked for the Office of the Senior Vice President for Asia and Japan Chair at the Center for Strategic and International Studies (CSIS). He graduated magna cum laude graduate of Georgetown University’s Edmund A. Walsh School of Foreign Service.