Peddling or Persuading: China's Economic Statecraft in Australia

Abstract

With the globalization of Chinese capital, economic statecraft has become an increasingly prominent component of China's foreign policy. In this article, I examine China's use of economic inducements in developed democracies, a topic of growing concern for policymakers, focusing on the case of Australia. I show how Beijing's attempts to coopt public voices and influence Australia's foreign policy using non-transparent political donations and academic funding generated a strong backlash. At the same time, economic interdependence has provided a buffering effect, with key domestic actors in Australia advocating for cooperative relations, although this effect can in turn be limited by Beijing's coercive economic tactics. My findings underline the reputational costs of certain approaches to economic statecraft, the value of building supportive coalitions, and the challenges faced by China's authoritarian state capitalist model. They also highlight the impacts of globalized Chinese capital in developed democracies, including the resilience and vulnerabilities inherent in democratic political processes.

Chinese investment and elite sentiment in Southeast Asia: An event study of influence along the belt and road

“…On the other hand, foreign influence attempts may also risk creating backlash in the target state. Foreign aid from China has been found to increase the local perception of corruption in Sub-Saharan Africa (Isaksson and Kotsadam 2018), while Wong (2021) shows that China’s political donations and academic funding have generated popular resentment in Australia. China’s lending practices in such countries as Sri Lanka (The Washington Post 2022) and Zambia (African Business 2020) have similarly created negative political fallout.…”

US economic statecraft and great power competition

“…Wong (2021);Norris (2018); Pak (2020); Andy Bounds, 3 December 2021, "Lithuania Complains of Trade 'Sanctions' by China after Taiwan Dispute," Financial Times, https://www.ft.com/content/0ebaa7c7-761d-445e-b3e4-f5d2c9b4768f…”

“… 51 Wong (2021); Norris (2018); Pak (2020); Andy Bounds, 3 December 2021, “Lithuania Complains of Trade ‘Sanctions’ by China after Taiwan Dispute,” Financial Times , …”