Great Power Competition and Middle Power Strategies: Economic Statecraft in the Asia-Pacific Region (The Political Economy of the Asia Pacific)

This edited volume addresses geo-economic strategic competition in the Indo-Pacific, exploring both the theoretical and thematic contours of this concept and issue-specific dynamics in the areas of finance, trade, energy, and technology competition. Chapters focus on the impact of renewed great power competition between Washington and Beijing in the Indo-Pacific region across these four areas. Each addresses central concerns for the future of the global economic order and offers a lens to understand interstate competition in light of the geopolitical shifts resulting from the COVID-19 pandemic. Written by an international panel of experts, this volume provides a cohesive view of the region's most pressing issues. As such, it will be relevant to scholars specializing in Indo-Pacific domestic politics and foreign policy, U.S. foreign policy, middle powers, China-U.S. relations, China-EU relations, Asia-Pacific developments, international security, international political economy, and emerging markets. Preface 6 Contents 8 Contributors 10 Part I: Introduction 12 Middle Power Economic Statecraft in a World of Geoeconomic Competition 13 1 Introduction 13 2 Trends in the Global Economy 14 3 Geoeconomics, Economic Statecraft, and Institutional Design 19 4 Overview of the Empirical Chapters 24 5 Common Themes and Conclusions 29 References 30 Part II: U.S.-China Competition and International Institutions 34 Pseudo Institutions: A Comparative Analysis of China’s BRI and the US-Led B3W 35 1 Introduction 35 2 Institutions: Orthodox and Pseudo 37 3 Hub-and-Spoke System: BRI 39 4 Hub-and-Spoke System: B3W 40 5 Comparing the Two Hub-and-Spoke Systems 41 Institutional Strength 42 Nature 43 Actor Scope and Geography 44 Partner Size 45 Sector Coverage 46 Aggregate Monetary Value 47 6 Prospects for the BRI and B3W and Implications 50 7 Conclusion 53 References 54 Middle Powers and Institutional Design: A Case Study of the CPTPP and DEPA 59 1 Introduction 59 2 The Influence of Middle Powers 63 3 Institutional Design 65 4 Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) 68 Membership 68 Control 69 Scope 71 Flexibility 72 Centralization 73 5 Digital Economy Partnership Agreement (DEPA) 73 Membership 73 Scope 74 Control 75 Flexibility 76 Centralization 76 6 Conclusion 77 References 78 EU’s Geo-economic Strategy in the Indo-Pacific 81 1 Introduction 81 2 EU’s Policies in the Indo-Pacific 83 3 EU’s Multilevel Governance in External Actions 86 4 EU’s Geo-Economic Strategy and the Principled Pragmatism Maneuver in the Indo-Pacific 91 5 Conclusion 95 References 97 Part III: East Asian Economic Statecraft 100 Between Big Push (Quantity) and Bankability (Quality): Geoeconomics of Infrastructure Financing in the Indo-Pacific 101 1 Introduction 101 2 Infrastructure Investment, Development Finance, and De-Risking 103 3 Infrastructure Investment by Japan and China: A Road to BRI and PQI in the Indo-Pacific 106 4 Economics and Politics of Infrastructure Funding 109 Funding China’s BRI 110 Transformation of Japan’s Infrastructure Financing 112 Quality Cum Bankability 117 5 Conclusion 119 References 121 Geo-economics of the Chinese Shipping Industry: Building Maritime Commercial Power from Bust to Boom, 2008–2021 125 1 Introduction: A Tale of Divergent Crisis Responses 125 2 Geo-economics of the Chinese Shipping Industry 127 PRC as a Maritime Commercial Power 128 Riding the Wave of Industry Consolidation 129 The Rise of the Chinese Shipping Industry Since 2000 130 3 Directing Traffic: Managing Container Shipping Bottlenecks, 2020–2021 133 COVID-19 Impact: Shortages and Misplacement of Vessels and Containers 134 Chinese State Intervention 136 Impact of Container Traffic on the Allocation of Shipping Capacities in Asia 137 US Exporters Left High and Dry 139 4 In a Holding Pattern? Directions for Further Research 141 References 142 Part IV: Middle Power Case Studies 147 The US-China Strategic Competition and Korea’s Economic Statecraft: Combining Bilateral and Regional Strategies 148 1 Introduction 148 2 The US-China Strategic Competition and Korea’s Strategic Ambiguity 150 The Origins of Strategic Ambiguity in Korea 150 Hedging Between the United States and China 153 The Restructuring of Supply Chains and the “China+α” Strategy 158 The Korea-US Alliance and Cooperation with Like-Minded Countries 160 3 Korea’s Regional Strategy as Economic Statecraft 162 4 Conclusion 166 References 167 Vietnamese Geoeconomics in a Polarized Global Economy: Understanding Bamboo Diplomacy and Its Viability 170 1 Introduction 170 2 Vietnam’s Emergence in the Intensification of World Polarization 171 3 Statecraft of Emerging Regional Middle Powers 172 4 A Three-Force Framework for Understanding the Regional Middle Power Concepts 173 Spatial Proximity 174 Historical Heritage and the Kinship System 174 External Driving Forces 175 5 Vietnam’s Statecraft in the Three-Factor Framework 176 Spatial Proximity: The Chinese Factor 177 Historical Heritage and the Kinship System: The Chinese Factor, Again 178 External Factors: Dualism in a Polarized World 179 6 Middle Power as a Good International Citizenship: Vietnam and Other Asian Nations 180 7 Discussion: The Viability of the Bamboo Diplomacy 181 8 Conclusion 185 References 187 Establishing Multilateral and Regional Rules on Digital Trade: The Role of Japan and Middle Powers 189 1 Introduction 189 2 Divergent Approaches to Data Governance in China and Emerging Economies 190 3 The Formation of a Multilateral and Regional Digital Trade Rule 194 The Formation of Regional Digital Trade Rules 194 Formation of Rules on Digital Trade in the Asia-Pacific and Indo-Pacific Region 203 4 Conclusion 207 References 209 South Korea’s Renewable Energy Odyssey: A Failed Attempt at Carbon-Neutral Growth Without Nuclear Energy 212 1 Introduction 212 2 South Korea’s Energy Mix Policy, Past and Present 215 3 A Nuclear-Free, Renewable Moonland 218 4 Making Nuclear Power Unrenewable 221 5 Conclusion 226 References 227