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Abstract
Economic statecraft, by which countries pursue national foreign- and security-policy aims through economic means, has a long tradition in international affairs, but was sidelined after the end of the Cold War. Since 2008, however, the global financial crisis and the rise of China have weakened the dominant position of the West, eroded the forces of globalisation and revived economic nationalism. In their book EU and US Foreign Policy Responses to China: The End of Naivety, Joachim Schild and Dirk Schmidt assess how the United States and European Union responded to China’s challenge through their foreign economic policies. They find a paradigm shift away from the liberal framework towards economic nationalism on both sides of the Atlantic, and many parallels in the specific tools and means deployed. At the same time, they identify significant differences, most notably on the underlying rationale of relations with China and the role of military security.
Notes
1 William Davies, The Limits of Neoliberalism: Authority, Sovereignty and the Logic of Competition, rev. ed. (Thousand Oaks, CA: Sage, 2017), p. xiv.
2 See Helen Thompson, Disorder: Hard Times in the 21st Century (Oxford: Oxford University Press, 2022); and Martin Wolf, The Crisis of Democratic Capitalism (New York: Penguin Press, 2023).
3 See Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World (New York: Penguin Press, 2019).
4 Earlier European and American thinking and practice – notably that of Friedrich List and Alexander Hamilton, respectively – inspired the concept. See Chalmers Johnson, MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975 (Stanford, CA: Stanford University Press, 1982); and Robert Wade, Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization (Princeton, NJ: Princeton University Press, 1990). For a fascinating comparison between contemporary China and imperial Germany, see Markus Brunnermeier, Rush Doshi and Harold James, ‘Beijing’s Bismarckian Ghosts: How Great Powers Compete Economically’, Washington Quarterly, vol. 41, no. 3, Fall 2018, pp. 161–76.
5 See Nancy M. Birdsall et al., The East Asian Miracle: Economic Growth and Public Policy (Oxford: Oxford University Press for the World Bank, 1998).
6 The formulation ‘rich country, strong army’ originated in ancient China during the period of the warring states and was later taken up by imperial Japan as well as communist China. See Oliver Corff, ‘“Rich Country, Strong Army”: China’s Comprehensive National Security’, Security Policy Working Paper No. 17/2018, Federal Academy for Security Policy, 2018, https://www.baks.bund.de/en/working-papers/2018/rich-country-strong-army-chinas-comprehensive-national-security; and Richard J. Samuels, ‘Rich Nation, Strong Army’: National Security and the Technological Transformation of Japan (Ithaca, NY: Cornell University Press, 1994).
7 For details, see Jost Wübbeke et al., ‘Made in China 2025: The Making of a High-tech Superpower and Consequences for Industrial Countries’, Mercator Institute for China Studies (MERICS) Papers on China, no. 2, December 2016, https://espas.secure.europarl.europa.eu/orbis/system/files/generated/document/en/MPOC_No.2_MadeinChina_2025.pdf.
8 See Rush Doshi, The Long Game: China’s Grand Strategy to Displace American Order (Oxford: Oxford University Press, 2021); and Aaron L. Friedberg, A Contest for Supremacy: China, America and the Struggle for Mastery in Asia (New York: W. W. Norton & Co., 2011).
9 See David A. Baldwin, Economic Statecraft (Princeton, NJ: Princeton University Press, 1985); Albert O. Hirschman, National Power and the Structure of Foreign Trade (Berkeley, CA: University of California Press, 1945); and Klaus Knorr, Power and Wealth: The Political Economy of International Power (New York: Basic Books, 1973).
10 Richard A. Bitzinger, Yoram Evron and Zi Yang, ‘China’s Military–Civil Fusion Strategy: Development, Procurement, and Secrecy’, Asia Policy, vol. 16, no. 1, January 2021, pp. 1–64.
11 This has also become a key theme in the China policy of the Biden administration. See Kurt M. Campbell and Jake Sullivan, ‘Competition Without Catastrophe: How America Can Both Challenge and Coexist with China’, Foreign Affairs, vol. 98, no. 5, September/October 2019, pp. 96–110; and White House, ‘Remarks by National Security Advisor Jake Sullivan on Renewing American Economic Leadership at the Brookings Institution’, 27 April 2023, https://www.whitehouse.gov/briefing-room/speeches-remarks/2023/04/27/remarks-by-national-security-advisor-jake-sullivan-on-renewing-american-economic-leadership-at-the-brookings-institution/.
12 See Hanns W. Maull, Angela Stanzel and Johannes Thimm, ‘United States and China on a Collision Course: The Importance of Domestic Politics for the Bilateral Relationship’, Stiftung Wissenschaft und Politik, SWP Research Paper 5, May 2023, https://www.swp-berlin.org/10.18449/2023RP05/.
13 See ‘China’s “Dual-circulation” Strategy Means Relying Less on Foreigners’, The Economist, 5 November 2020, https://www.economist.com/china/2020/11/05/chinas-dual-circulation-strategy-means-relying-less-on-foreigners. See also Barry Naughton and Briana Boland, ‘CCP Inc.: The Reshaping of China’s State Capitalist System’, Center for Strategic and International Studies, January 2023, https://csis-website-prod.s3.amazonaws.com/s3fs-public/2023-01/230131_Naughton_Reshaping_CCPInc_0.pdf.
14 See Özgür Özdamar and Evgeniia Shahin, ‘Consequences of Economic Sanctions: State of the Art and Paths Forward’, International Studies Review, vol. 23, no. 4, December 2021, pp. 1,646–71.
15 See ‘Are Sanctions on Russia Working?’, The Economist, 25 August 2022, https://www.economist.com/leaders/2022/08/25/are-sanctions-working.
Additional information
Notes on contributors
Hanns W. Maull
Hanns W. Maull is Senior Distinguished Fellow at Stiftung Wissenschaft und Politik (SWP) and an adjunct professor for international relations and strategic studies at the Johns Hopkins School of Advanced International Studies (SAIS) Europe. He is co-author (with Alexandra Sakaki, Kerstin Lukner, Ellis Krauss and Thomas Berger) of Reluctant Warriors: Germany, Japan, and Their U.S. Alliance Dilemma (Brookings Institution Press, 2019).