China's Economic Diplomacy, Interdependence Theory

Economic diplomacy refers to the foreign policy and actions taken by a sovereign state and its representative institutions or officials in order to achieve economic goals or it refers to the use of economic means to achieve a state's non-economic objectives.The changes in the international structure in the post-Cold War era, as well as the new needs for domestic development in China, made it necessary for China to develop its economic diplomacy. Especially since the 1990s, China has had such a positive attitude towards economic cooperation in East Asia that surpassed the expectations of the international community. Therefore, currently China's economic diplomacy in East Asia has achieved considerable success.This paper analyzes the background and main concept as well as strategies and tactics of China's economic diplomacy by focusing on China's efforts to promote financial cooperation in East Asia. This essay suggests that the background in which China carries out its economic diplomacy is the relationship of asymmetric interdependence among East Asian countries and the developed ones. China's regional financial cooperation concept is also perceived as China's actions of economic diplomacy in East Asia region in order to achieve some of its political objectives in international relations.The theory of complex interdependence and its concepts of sensitivity and vulnerability, introduced by Robert O. Keohane and Joseph S. Nye, are the theoretical framework and tools of analysis for this essay.This paper concludes that China's ultimate purpose behind its constructive promotion of financial cooperation in East Asia region is the overall reform of the international financial system. China's diplomatic efforts have successfully consolidated regional economic cooperation in East Asia, have promoted partial reform of the international financial system as well as have created for China the image of "a responsible nation" in the international community.Due to the fact that China is the world's most populous country, therefore, it is easily understood that domestic factors deeply affect her economic diplomacy. However, China needs to recognize that, at the same time, she is the world's second largest economy. Therefore, it is advisable for China to overcome any pragmatistic approaches to her foreign policy, balance the relationship between domestic factors and international obligations as well as take more international responsibilities so as to become actually a responsible big power. However, this would be a great challenge for China to prove whether she is really insisting on her route of peaceful development. This paper suggests that China should take more initiatives in adopting constructive regional economic diplomacy as a means to achieve this goal.