With China’s growing economic (and political) clout, economic diplomacy has become an important tool in Chinese foreign policy. Beijing has provided extensive inducements in the form of aid and investment to many developing countries in Southeast Asia, Africa, and Latin America, including its much-vaunted One Belt One Road (OBOR) initiative. At times, it has also enacted episodes of trade sanctions toward countries such as Japan and the Philippines, over territorial disputes. As the notion of China exercising economic statecraft and throwing around its hegemonic clout has prompted much debate, speculation, and even alarm among foreign observers, there remains relatively little analysis on the motivations, conditions, and effectiveness of such purported statecraft. In reviewing and discussing a number of Chinese-language sources on economic diplomacy, this article sheds light on the debates within China regarding the concept of economic diplomacy, how it has evolved over time, the formulation and implementation process, how this fits into broader frameworks of Chinese foreign policy, and challenges and expectations for the future.

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