On the fungibility of economic power: China’s economic rise and the East Asian security order

Abstract

China is now second only to the US as a world economic power. Its economic rise has challenged US ability to fundamentally shape the world trade order. However, the importance of the rise of the Chinese economy for international security affairs is less clear. The key analytical issue for international politics and for an understanding of the sources of power is whether economic power is fungible in international security affairs, whether it can independently determine the strategic alignments of small states. This is also the key question in assessing the implications of China’s economic rise for the East Asian security order. The political-economy literature argues that trade dependence can lead small states to realign within great power politics, regardless of the military balance. However, poor case selection challenges this prior literature. By using contemporary East Asia as a source of multiple bilateral case studies, I argue that the economic dependence of a small state on a great economic power is insufficient to influence independently small state strategic alignment preferences and that China’s rising economic power is not fungible in East Asian security affairs.