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Research Questions

  1. What is China's grand strategy, how does it involve institutions, and what are its implications for Asia?
  2. How might other Asian countries respond to China's grand strategy?

China's economic growth has been accompanied by a rise in its regional and global ambitions. It has sought to fulfill these ambitions in various ways, including through the promotion of new initiatives and institutions. The large number of new institutions and initiatives that China, in recent years, has chosen to promote or be actively involved in suggests that its grand strategy may have changed.

Some of these initiatives may accomplish multiple outcomes. For example, in addition to providing development finance to developing countries, the trillion-dollar Belt and Road Initiative's corridors integrate China's economy more closely with those of developing countries. Through the land corridors, China could transport its goods to Asia and Europe if maritime routes, which are currently the main routes for transport, are blockaded in a war. China's regional and global ambitions now encompass the attainment of technological, diplomatic, cultural, and military power.

In this report, the authors review the literature on China's grand strategy, its use of institutions, and its emphasis on Asia. Drawing on the input of policy experts, the authors further discuss China's use of institutions in implementing its grand strategy toward Asian nations of interest to China, including, as a case study, the countries of the Korean Peninsula.

The case study suggests that China mostly uses institution-based strategies to accomplish greater economic integration with both North and South Korea. To manage its rivalry with the United States in the Korean Peninsula and build soft power, China uses both institutional and noninstitutional initiatives.

Key Findings

China's grand strategy since the end of the Cold War has consistently been guided by one long-term goal

  • China's long-term goal is to build a preeminent Asian presence and a larger global presence in the socioeconomic, diplomatic, and defense arenas.

To achieve its long-term goal, China currently desires to accomplish three outcomes

  • China wants to achieve greater economic integration with Asia and the rest of the world and primarily uses outbound foreign direct investment to do so.
  • China needs to manage its more competitive rivalry with the United States.
  • China seeks to build soft power engagement globally instead of only in the developing world.

China's strategies to achieve its desired outcomes have evolved in response to changing circumstances within and outside China

  • China's increased use of multilateral, regional, and bilateral institutions to address the socioeconomic, diplomatic, and national security dimensions of China's interests is one main change.
  • A second change is that economic integration has replaced trade openness for Asia and globally. China has now assumed a role traditionally played by the United States and other developed countries by providing development finance to create a set of Chinese-funded land and sea infrastructure corridors that link China to the rest of Asia and Europe.

China's arrival on the world stage in recent years requires other Asian countries to respond to China's grand strategy

  • Countries must choose between working with Chinese economic institutions or diversifying their economies and between accepting Chinese primacy in addressing their security needs or building their own coalitions.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Defining Grand Strategy

  • Chapter Three

    China's Grand Strategy—An Increased Reliance on Institutions

  • Chapter Four

    China's Grand Strategy and the Korean Peninsula

  • Chapter Five

    Concluding Discussion

  • Appendix A

    Subject-Matter Expert Sample Description

  • Appendix B

    Glossary

This research was sponsored by the Korea Foundation under its Policy Oriented Research Program and conducted within the International Security and Defense Policy Center of the RAND National Security Research Division (NSRD).

This report is part of the RAND Corporation Research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

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