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The China Model: Beijing’s Economic Statecraft in Asia and Europe

Published 03 Aug 2017

Our speaker at Glover Cottages on Tuesday the 1st of August was associate professor James Reilly from the University of Sydney, who discussed China’s use of economic statecraft to further its overseas political objectives.

James characterised China’s economic statecraft as having three traits that reflect the country’s unique economic conditions and system of governance. It is state directed, multi-purposed, and involves the deployment of a full range of resources and techniques.  China often used a mixed ‘carrot and stick’ approach to get other countries to moderate criticism, for example  of its human rights record. Following  the Dalai Lama’s visit, Estonian exports of milk to China were temporarily halted until an apology was made.  Once Estonia undertook not to host the Dalai Lama again, trade and diplomatic relations were restored.

James believed that China’s economic statecraft is a double-edged sword. On one hand, direct oversight of offshore Chinese companies gives China immense lobbying power globally. On the other, Chinese strategy can lead its SEOs ignoring local laws and regulations. In Myanmar in 2013, domestic backlash towards this behaviour resulted in significant public outcry and the halting of the multibillion dollar Sino-Myanmar oil pipeline.

James closed with as analysis on the impact of the China Model on Australia. His key point was that Australia had nothing to fear and a lot to gain from China’s investment in Australia. He concluded that Australia’s robust regulatory system allowed it to withstand the predatory behaviour of Chinese companies. This was reinforced by China’s realisation that it was in for the long haul and therefore likely to adhere to Australian regulations. As Reilly put it, Australia had no cause for alarm and should “continue to be smart and confident’’.


Report by Regan Ho

AIIA NSW intern