Abstract
Latecomer countries – including Asian, post-colonial and transition states – are strengthening their role and influence in global politics and economics in a system that has long been dominated by Western countries. Confronted with the visco of global governance and international political and financial institutions, the governments of these emerging countries primarily use economic tools and commercial relations to strengthen their position. This makes for paradoxical responses of established powers, with European ‘old money’ being haughty against and at the same time afraid of Asian ‘new money’ that is pouring in to save several European countries from bankruptcy. The unfolding reality raises important but complex questions about the role that economic factors play in the way power is conceived by governments of both industrialized and emerging countries, and how economic power is projected and exercised on the international stage.
This chapter owes much to earlier collaboration and joint publication with Frans-Paul van der Putten, a colleague at the ‘Clingendael’ Institute. The author wishes to thank him for his creative inspiration then and now, and for his (in)direct support for this writing. The author is furthermore grateful to other colleagues for useful comments on an earlier draft.
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Notes
- 1.
Throughout this chapter, the term ‘emerging countries’ is used interchangeably with ‘emerging economies’ and ‘advanced developing economies’ – all of which can be found in scholarly and newspaper articles on related topics. The focus in this chapter is on emerging countries in Asia, with a particular emphasis on China.
- 2.
For a useful analysis of how capitalism within the United States and European countries evolved since 1815, see Kaletsky (2010).
- 3.
Established powers have followed a similar path that emphasised economic tools and purposes in an early stage of development, see also Chang (2003).
- 4.
Recent examples of state intervention in Western countries include bailouts of private companies and quantitative easing in the late 2000s.
- 5.
Tilly argues that the expansion of military force drove the processes of state formation in Europe (1990: 122–126).
- 6.
- 7.
This phenomenon has also been referred to as ‘mercantile realism’: mobilizing potential power while carefully hedging against possible threats (Heginbotham and Samuels 1998).
- 8.
For more on this argument see Radtke (2008).
- 9.
This contrasts with the noncontextual definition of power typically adopted by realists, who argue that capabilities as such make for power. See for example Gilpin (1981: 13).
- 10.
This paragraph follows Knorr (1975: 79, 84).
- 11.
More on this in the next section.
- 12.
This illustrates why Japan, which also heavily subsidizes its inefficient agricultural sector, can – to a certain extent – be characterized as a clientelized state.
- 13.
- 14.
This conceptual framework is expounded in Okano-Heijmans (2011).
- 15.
This definition follows Kopp but distinguishes more explicitly between ODA and other commercial activities in which the government is involved (2004: 1).
- 16.
More on this in the empirical section.
- 17.
For more on this, see Ikenberry and Inoguchi (2010: 383–388).
- 18.
The political dimension of power stems from influence in international governance, for example the International Monetary Fund or the World Bank. This is different from but complementary to political power gained through economic and military capabilities.
- 19.
This paragraph builds on Okano-Heijmans and van der Putten (2009b).
- 20.
In hindsight, the actual benefits of this clause to ASEAN-countries have been disputed by many analysts. See for example Bello (2010).
- 21.
To Beijing’s credit, it may be added that the Chinese government in July 2010 had announced plans to cut rare earth export quotas for the second half of that year, leaving the theoretical possibility that this caused the sudden drop in exports in the case of the US and European countries.
- 22.
This violated a bilateral agreement on consular relations between the two countries (Ching 2010).
- 23.
For a critical US perspective, see US-China Economic and Security Review Commission (2010: esp. 257–266).
- 24.
On this front, policies of established powers – the US and, to a lesser extent, European countries – are not so different from China’s, although the political objectives differ.
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Okano-Heijmans, M., Okano-Heijmans, M. (2012). Power Shift: Economic Realism and Economic Diplomacy on the Rise. In: Fels, E., Kremer, JF., Kronenberg, K. (eds) Power in the 21st Century. Global Power Shift. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-25082-8_14
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