The Demonstration Effects of China’s Economic Coercion and Their Limits

• In Event: Outgoing China: Domestic Politics and International Implications

Abstract

Much has been made about China’s apparent use of punishments to coerce other states to conform to its preferences in recent years. Work on these cases has drawn from and informed the existing literature on coercive diplomacy and economic statecraft. Some evidence suggests that governments not targeted by the PRC take cues from these episodes and preemptively accommodate Beijing to avoid potential punishment. This purported phenomenon gives rise to claims that Beijing deliberately makes coercive efforts public to create demonstration effect to discourage others from challenging its interests, a practice termed “killing chickens to scare the monkeys” or kill one, scare a hundred”. Such a phenomenon raises insufficiently answered puzzles about why and to what extent states preemptively accommodate major powers based on observations of costs imposed on third-parties.

Our paper asks what affects the sensitivity of states toward the coercion of third-parties, seen in the magnitude of preemptive conformity with states and, or, anticipated major power positions. To do so, we use two sets of paired comparisons of Malaysia and Taiwan as well as France and the United Kingdom to examine how states react to purported PRC punishment of neighbors. We submit that perceived familiarity with pressure from the coercing state diminishes preemptive accommodation after demonstrated punishment on third parties. In particular, recent experience of the limited effects of direct punishment dampens the effects of domestic lobbying by groups interested in establishing or maintaining close relations with the major power in question, a key mechanism behind preemptive accommodation. The paper seeks to extend and refine existing theoretical conversations about reputation and coercive diplomacy in international politics, particularly when, why, and how actors respond to demonstrated, indirect coercion.

Author

• Ja Ian Chong, National University of Singapore