Never in world history has one government had so much control over so much wealth. It is no surprise, therefore, that Beijing is deploying its vast economic wealth to advance foreign policy goals. China is using economic statecraft more frequently, more assertively, and in more diverse fashion than ever before. Yet fears of China’s economic coercion should not be overdrawn. Diverging interests across the broad array of state and commercial actors engaged in China’s economic statecraft impedes effective policy implementation. A review of cases where China has used economic sticks or carrots shows a mixed record of success. Indeed, in many respects China’s use of economic statecraft has been counterproductive. These constraints, along with China’s domestic challenges and Australia’s considerable economic advantages, limit Australia’s vulnerability to potential economic coercion from its largest trading partner.
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