Author's Response: Understanding China's Economic Statecraft

Abstract

Author's Response:Understanding China's Economic Statecraft James Reilly (bio) How do domestic factors affect China's foreign policy? This question has been at the core of my research agenda since graduate school. Over the past decade, I have sought to understand how Chinese policymakers strive to utilize China's vast wealth to advance their foreign policy objectives. Orchestration: China's Economic Statecraft Across Asia and Europe represents the culmination of these efforts. It is an honor to have three such distinguished scholars discuss my book alongside the excellent study by Kathryn Stoner. Alexander Korolev's response most directly engages my book's core approach by asking, "Why is it orchestration and how useful is the concept for grasping the intricacies and uniqueness of economic statecraft in China?" Orchestration theory was developed by international relations theorists who noted that in practice most governance is indirect since "governors" frequently rely upon third parties to increase efficiency, effectiveness, and legitimacy.1 They divide indirect governance into two "ideal types": delegation and orchestration. Emerging out of the dominant principal-agent framework, delegation presumes that the agent's initial interests diverge from the principal's goals, requiring contract-like compensation, oversight, and punitive measures to shape the agent's behavior. In an orchestration strategy, the "orchestrator" instead identifies a like-minded agent who shares the orchestrator's basic goals and then incentivizes and supports the agent to act in ways that should advance both the agent's and the orchestrator's goals. I was introduced to this framework by one of the concept's originators during my 2015–16 fellowship at the European University Institute in Florence, Italy. Amid my struggles to conceptualize what I was learning about China's economic statecraft, it was as if someone had suddenly turned on the lights. For the first time, I had a conceptual framework that accurately and yet parsimoniously encapsulated what I had long sensed [End Page 236] about how Chinese policymakers sought to utilize their nation's vast wealth to advance their foreign policy goals. In the book, I argue that Chinese leaders seek to retain a central role for the party-state while relying on a broad array of economic statecraft techniques to advance multiple policy goals. This ambition creates considerable implementation challenges. Orchestration—designing economic statecraft initiatives to maximize interest alignment between the foreign policy goals of central leaders and the interests of key implementing actors—eases these difficulties. If implemented smoothly, China's economic statecraft thus requires only a light touch. The Belt and Road Initiative is the latest and largest manifestation of Beijing's orchestration strategy.2 I deploy orchestration as a conceptual framework to describe the implementation of China's economic statecraft. As such, it is distinct from models of policy deliberation (such as the "wisdom-pooling" framework Korolev mentions). Korolev also asks, "Which processes are thus not an orchestration?" Two stand out: when top Chinese leaders personally implement economic statecraft initiatives (clearly not an instance of indirect governance), and when they rely on oversight and punitive mechanisms that fit more neatly within the traditional principal-agent framework. To answer Korolev's initial question then, the payoff from my use of the orchestration framework arises in illuminating the realms of China's economic statecraft that go beyond direct leadership action and instances where leaders strive to mobilize bureaucratic or economic actors to advance foreign policy objectives. Such examples dominate my book's empirical material and, I would contend, account for the vast majority of China's economic statecraft. Korolev suggests that I might disagree with his interpretation that my book's analysis builds on neoclassical realism. In fact, as I explain, "economic statecraft…shares a core assumption with neoclassical realism: domestic ideas and institutions shape how rising power affects a country's foreign policy" (p. 4). After quoting Rose's seminal article, I add: "Realism alone, however, offers little guidance into how these domestic ideas and institutions actually influence policy outcomes." My book's core premise is that domestic ideas and institutions exert a powerful influence on how a country engages in economic statecraft—helping explain why different countries do economic statecraft differently. The first [End Page 237] chapter...