Bonnie Glaser, senior fellow at the Center for Strategic and International Studies in Washington, recently published an article entitled China’s coercive economic diplomacy.
In her article, Glaser asserts that China has used the China-ASEAN free-trade agreement (FTA) — and overseas, investment, assistance and trade — to encourage other countries to consider its national interests when formulating policies.
The trend Glaser observes is not a new one; it is an expression of the Chinese Communist Party’s (CCP) doctrine that everything must serve a political end.
In her article, Glaser, an expert on China, presents a categorized list of major, recent international disputes to demonstrate how China’s policy of integrating politics with economics is becoming ever-more pervasive.
As an example, Glaser mentions the ASEAN Ministerial Meeting held in Cambodia in the middle of last month, which for the first time in 45 years did not release a joint communique. This was apparently the result of pressure exerted by China with Cambodia providing compliant support.
As Glaser explains: “Beijing has provided over US$10 billion in aid to Cambodia. Last year alone the amount of foreign investment pledged to Phnom Penh by Beijing was 10 times greater than that promised by the US.”
Glaser says that China has been offering major economic “carrots” in a bid to expand its influence in Southeast Asia, the “ASEAN plus one” China-ASEAN FTA being one example.
Of course, where there are “carrots,” there are also “sticks.”
For example, after an ownership dispute broke out in April between China and the Philippines over the Scarborough Shoal, known in Taiwan as Huangyan Island (黃岩島), China blocked banana shipments from the Philippines from entering Chinese ports on the grounds that the fruit was contaminated with insects. This dealt a major blow to the Philippines, which exports over 30 percent of its bananas to China.
Consequently, business interests in the Philippines pressured their government to make concessions
In 2010, following Japan’s detention of the captain of a Chinese trawler that had entered waters near the disputed Diaoyutai Islands (釣魚台), China retaliated by blocking shipments of rare earth minerals to Japan.
After the Norwegian Nobel Committee awarded the 2010 Nobel Peace Prize to Chinese dissident Liu Xiaobo (劉曉波), China froze FTA talks with Norway and imposed new veterinary inspections on imports of Norwegian salmon. As a result, last year, China’s imports of salmon from Norway fell by 60 percent.
Glaser’s findings are nothing new for those who have lived through Taiwan’s experience, but now — as a rising Chinese uses economic pressures to achieve its political goals — Glaser perceives that it is gradually encroaching on US benefits and values.
In China there is no such thing as pure economics, but only political economy based on the Karl Marx’s economic theory as outlined in Das Kapital. Economy and politics are inseparable.
There is a clear difference between China’s situation and the kind of relationship that exists between business and politics under capitalism where businesses use their economic muscle to influence politics, pushing for beneficial and preferential policies or preventing things that would be harmful to their interests. Their motive is simply to maximize their profits.