From Going Out to the Belt and Road Initiative, China's strategic use of economic statecraft is not a new phenomenon. But how does China actually carry out its economic statecraft and how effective is it? James Reilly's excellent book, which offers the idea of “orchestration,” could give readers an answer.
Orchestration argues that, realizing limits in its military and soft power (p. 162), China relies on economic statecraft – a carefully calibrated strategy to use “economic resources to exert influence in pursuit of foreign policy objectives” (p. 2). Noting that economic statecraft generally has two dimensions – economic inducements and sanctions – Orchestration specifically focuses on China's economic inducements, consisting of a wide array of tools such as trade, investment, foreign aid and assistance offered to the target countries.
As the title suggests, Reilly's explanatory framework centres around the concept of orchestration – a term borrowed from the institutionalism literature (K. Abbott, et al. “Two logics of indirect governance: delegation and orchestration,” British Journal of Political Science, 46(4), 2016, 719–729) that describes the institutional behaviour relying on indirect governance: delegation and orchestration. While acknowledging that the functional roles of delegation and orchestration may overlap, Reilly argues it is more appropriate to interpret China's economic statecraft as an art of orchestration where an “orchestrator” (p. 7) deploys ideational and material resources to mobilize intermediary actors who voluntarily join the orchestrator for a joint governance goal. As the book suggests, orchestration involves a process of “nesting” (p. 2) an initiative in China's institutions where Beijing uses “tournaments” (p. 97) to retain oversight and facilitate coordination while incentivizing ministries, financial agencies, provincial governments and state/private businesses to compete for economic opportunities. In this process, the orchestrator uses institutional and ideational apparatus to ensure foreign policy goals and pursuit of profit goals are aligned.
Drawing extensively on Chinese-language sources and first-hand interviews in China, four cases are selected to illustrate how China's economic statecraft interacts with different types of political systems: Western Europe; Central and Eastern Europe; North Korea; and Myanmar. These cases show mixed results for China's orchestration efforts.
In Western Europe (chapter three), China sought to use the Eurozone crisis to advance its goals of influencing the region through a buying spree. China's purchase power was at first well received but later faced growing concerns shared among the Western European countries. In Eastern and Central Europe (chapter four), Reilly observes that China's economic statecraft was effective to a certain degree in making countries like Hungary and the Czech Republic more amenable towards China's interests. However, the economic statecraft impact appears quite modest at the regional level. In North Korea (chapter five), China's economic statecraft is not as powerful as is commonly assumed, even though this Leninist country is heavily reliant on China economically and politically. For instance, Beijing was seen to be frustrated at its failure to get North Korea to end Pyongyang's nuclear weapons programme. Different from China's economic statecraft in North Korea, where tight control by Pyongyang leaves limited space for China's economic activities, China's economic influence has massively infiltrated Myanmar's political economy. Despite the in-depth engagement in Myanmar (chapter five, written before the Myanmar military coup in 2021), Chinese economic statecraft did not go smoothly there either. During the democratic transition starting in 2011, Myanmar's surging civil society forces challenged the legitimacy of Chinese investments, resulting in huge economic losses for Chinese companies.
Based on these cases, Reilly concludes that Beijing's economic statecraft, while well-coordinated, quite often fails to realize its foreign policy goals. To Beijing's dismay, its economic statecraft sometimes generates counterproductive effects because it stokes public distrust of China in target states.
By focusing primarily upon positive economic statecraft, Orchestration constitutes a useful addition to the scholarship on China's economic influence. It also adds to the discussion of neoclassical realism to reassess the concept of power, where domestic political variables are significant factors in a state's ability to harness latent material power. By decoding domestic political and ideational variables, Reilly's book is aligned with the neoclassical realism that power can be used only if it can be mobilized. Two variables are particularly critical for the use of power: the state's extractive ability and its ideational capacity to influence domestic actors.
Notwithstanding the core merits of the book, several key aspects of Beijing's economic statecraft are missing. First, Reilly's conceiving of Chinese economic statecraft obscures distinctions between the Xi administration and those of his forerunners. Since the research has a time spectrum covering 2006–2019, the book does not offer an explicit comparative study on how changes in China's domestic political economy impact its orchestration efforts.
Second, probably due to limitations of the project's scope, Orchestration does not engage in debate about how China uses economic coercion/punishment as part of its statecraft strategies. China's propensity to apply economic coercion to protect its interest has clearly been growing over the past few years. Beijing has applied economic punishments to deter US arms sales to Taiwan, applied trade pressure on its neighbours over maritime disputes involving the East and South China Seas and pressurized international brands such as H&M on their stances relating to the Xinjiang human rights issue. How the orchestration framework can (or cannot) be applied to assess the effectiveness of China's negative economic statecraft will be equally interesting.
Lastly, given the opaque nature of policymaking in China, it is difficult to prove causal links between China's economic statecraft goals and the subsequent international activities of Chinese actors. Focusing on a single domain of Chinese economic activities as statecraft is too narrow. Such a focus might further politicize the analysis of China's development cooperation and overlook the possibility that China could contribute to international development goals.
In all, Reilly's book on China's positive economic statecraft is an important contribution for students, scholars and policymakers interested in studying governance, foreign economic policy and institutions. Now, as China's sanctions regime appears stronger with legal, administrative and financial instruments at its disposal, further research could extend Reilly's useful framework to those new frontiers.
