Anti-Foreign Boycotts as a Tool of Economic Coercion: The Case of China

• In Event: The New Era of Economic Statecraft in Asia and Latin America

Abstract

Why did anti-foreign boycotts occur only under some international conflicts but not others? Anti-foreign boycotts didn’t occur in all cases of China’s international disputes. For instance, boycotts didn’t happen during Sino-Japanese conflicts in 2005, but when China’s relations with Japan had gone through major setbacks after Japanese government formally nationalized Senkaku/Diaoyu islands as its territory in 2012, Japanese products faced huge blow. Then, what explains that anti-foreign boycotts occurred only in certain occasions?
This paper argues that Chinese government manages anti-foreign boycotts catering to its foreign-policy goals. On the one hand, citizens might mobilize to boycott or not, depends on whether there is genuine anti-foreign sentiment. On the other hand, the Chinese government manages to direct popular boycotts against its foreign opponents according to its foreign-policy goals. Using text analysis, this paper finds that the Chinese government guided its citizens’ anti-foreign sentiments via the state media, signaling “green light” or “red light” to anti-foreign boycotts, and even encouraged boycotts when the withdrawal from commercial relations favor Chinese foreign policy. For Chinese government, allowing boycotts not only show anti-foreign sentiment from the public but also creates economic costs toward its opponents.
The popular boycotts also carry some risk for China of adverse collateral consequences, particularly if Chinese citizens reduce purchases of foreign-branded goods that are actually manufactured in China. In other words, Chinese government also impose economic costs on itself by allowing boycotts, acts as a credible signal of resolve to its foreign foes. In addition, the paper also finds that boycott could work as economic statecraft, only when media is fully controlled by state. That is only if media is monitored, could it becomes a tool to manage the anti-foreign sentiment. Moreover, foreign products could be targets of boycotts, only when the boycotting country has to be integrated into world economy, —i.e., the foreign products is in the market of boycotting country.
This paper presents three cases to support the argument above. The first case, the 2012 conflict with Japan over the Senkaku/Diaoyu islands, shows an orchestrated anti-foreign boycott lasting several months. In the second case, following the 2016 judgment of an arbitration tribunal in Hague that rejected China’s claims to historic rights in the South China Sea, the Chinese government instead discouraged anti-foreign boycotts, judging that this would not advance its foreign policy interests. In 2017, the Chinese government encouraged boycotts against Korean products after Korea’s decision to deploy anti-missile system, known as Terminal High Altitude Area Defense (THAAD). These three cases provide support of my claim that the Chinese government is able to allow, to block or to create voluntary consumer boycott of a foreign product being sold in China, and that the Chinese government pursues anti-foreign boycotts only when they pose relatively low costs to its overall international trade strategy.

Author

• Mingmin Yang, University of Southern California