The Jade Straitjacket: Measuring Reactions to China’s Rise

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Since the Cold War, the Global South has become the basis of China’s political, economic, and military interests, as well as the major theater of China’s power competition with the United States. It is thus necessary to recognize how developing states have responded to changes in the international system brought on by China’s rise. Given the tide of nativism opposing trade and globalization, mostly studied through a Western lens, this study extends the analysis to the attitudes of the Global South. I outline the Western reaction to China’s rise to differentiate the factors that provoke backlash in the developed and developing world. Analyzing the relationship between China’s economic engagement and the degree of anti-China sentiment in a given region, as compared to the same relationships for the United States, I provide an amendment to Friedman’s “Golden Straitjacket” thesis to better understand China’s role in the processes of globalization and discuss the implications of the relationship between trade and domestic attitudes on the liberal theory of trade interdependence and conflict. I argue that since China’s “Jade Straitjacket” is a destabilizing force that provokes negative backlash stronger than reactions to American trade based on the findings of this study, policymakers must contend with the disconnect between elites who make the decision to don the straitjacket and domestic audiences who react adversely to the societal ramifications of these decisions.

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Dale C. Copeland is Assistant Professor in the Department of Government and Foreign Affairs at the University of Virginia. For their helpful comments on previous drafts of this article, I would like to thank Robert Art, V. Natasha Copeland, Michael Desch, Angela Doll, John Duffield, Matthew Evangelista, Richard Falkenrath, James Fearon, Joseph Grieco, Atsushi Ishida, Irving Lachow, Alastair Iain Johnston, Andrew Kydd, Jack Levy, Lisa Martin, Michael Mastanduno, John Mearsheimer, Andrew Moravcsik, John Owen, Paul Papayoanou, Stephen Rhoads, Gideon Rose, Richard Rosecrance, Len Schoppa, Herman Schwartz, Randall Schweller, Jitsuo Tsuchiyama, David Waldner, and Stephen Walt. This article also benefited from presentations at the Program on International Politics, Economics, and Security at the University of Chicago; the University of Virginia Department of Government's faculty workshop; the annual meeting of the American Political Science Association, Chicago, September 1995; the Olin security workshop at the Center for International Affairs, Harvard University; and the Center for Science and International Affairs, Harvard University (under whose auspices it was written). All errors remain mine. 1. For a summary of the causal variables in the two schools, see John J. Mearsheimer, "Back to the Future: Instability in Europe After the Cold War," International Security, Vol. 15, No. 1 (Summer 1990), pp. 5-56; Robert O. Keohane, "International Liberalism Reconsidered," in John Dunn, ed., The Economic Limits to Modern Politics (Cambridge: Cambridge University Press, 1990), pp. 165-194. 2. Four other subsidiary liberal arguments, employing intervening variables, are not sufficiently compelling to discuss here. The first suggests that high trade levels promote domestic prosperity, thereby lessening the internal problems that push leaders into war. The second argues that interdependence helps to foster increased understanding between peoples, which reduces the misunderstandings that lead to war. The third asserts that trade alters the domestic structure of states, heightening the influence of groups with a vested interest in peaceful trade. The final argument contends that trade has the "spill-over" effect of increasing political ties between trading partners, thus improving the prospects for long-term cooperation. For an critical analysis of these views, see Dale Copeland, "Economic Interdependence and the Outbreak of War," paper presented to University of Virginia Department of Government's faculty workshop, March 1995. 3. Richard Cobden, The Political Writings of Richard Cobden (London: T. Fischer Unwin, 1903), p. 225. 4. Norman Angell, The Great Illusion, 2d ed. (New York: G.P. Putnam's Sons, 1933), pp. 33, 59-60, 87-89. 5. Ibid. , pp. 59-62, 256. 6. Richard Rosecrance, The Rise of the Trading State: Commerce and Conquest in the Modern World (New York: Basic Books, 1986), pp. 13-14; 24-25 (emphasis added); see also Rosecrance, "War, Trade and Interdependence," in James N. Rosenau and Hylke Tromp, eds., Interdependence and Conflict in World Politics (Aldershot, U.K.: Avebury, 1989), pp. 48-57; Rosecrance, "A New Concert of Powers," Foreign Affairs, Vol. 71, No. 2 (Spring 1992), pp. 64-82. 7. A book often seen as a statement on the peace-inducing effects of interdependence—Robert O. Keohane and Joseph S. Nye, Power and Interdependence (Boston: Little, Brown, 1977)—actually contains no such causal argument. For Keohane and Nye, "complex interdependence" is more peaceful by definition: it is "a valuable concept for analyzing the political process" only when military force is "unthinkable" (pp. 29, 24). In the second edition: "since we define complex interdependence in terms of [policy] goals and instruments," arguments "about how goals and instruments are affected by the degree to which a situation approximates complex interdependence or realism will be tautological." Thus, "we are left essentially with two dependent variables: changes in agendas and changes in the roles of international organizations." Keohane and Nye, Power and Interdependence, 2d ed. (Glenview, Ill.: Scott, Foresman, 1989), p. 255; emphasis in original. The dependent variable of this article—the likelihood of war—is nowhere to be found, which is not surprising, since it is assumed away. Other works on interdependence from the 1970s, which largely examined dependent variables other than war, are discussed in Copeland, "Economic Interdependence and the Outbreak of War." 8. One might contend that realists doubt the causal importance of economic interdependence, since relative gains concerns convince great...
Some recent analyses challenge previous reports which show that economically important trade significantly reduces the probability of militarized disputes between countries. Beck et al. (1998) address the effect of temporal dependence in the time-series data on empirical support for the liberal peace, while Barbieri (1998) makes a number of important changes in theoretical specification and measurement. Using data for nearly the entire post-World War II era (1950-92), we first replicate the specifications of the challengers. When analyzing all dyads, we find no relationship between interdependence and peace, but the pacific benefits of trade become evident among the politically relevant dyads (those including a major power, or two contiguous states), among whom the great majority of disputes occur. Subsequently, we introduce, in stages, an alternative method of controlling for temporal dependence, our theoretically preferred measures of interdependence and proximity, and new dyadic estimates for unreported trade. With these sequential modifications we find increasingly strong support for the liberals' belief that economic interdependence and democracy have important pacific benefits. This support is largely robust to the methods of controlling for temporal dependence and to whether an attempt is made to explain involvement in disputes or merely their onset. We find no evidence that asymmetric trade increases conflict.
It is widely accepted that democracies are less conflict prone, if only with other democracies. Debate persists, however, about the causes underlying liberal peace. This article offers a contrarian account based on liberal political economy. Economic development, free markets, and similar interstate interests all anticipate a lessening of militarized disputes or wars. This “capitalist peace” also accounts for the effect commonly attributed to regime type in standard statistical tests of the democratic peace.
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