China's ascent in the economic, technological, and military spheres and its assertive foreign policy have disrupted geopolitical paradigms, prompting intensified discussions of great power competition and rivalry. But how did China achieve great power status and build it from a weaker resource position in a U.S.-dominated international system?

Stanford political scientist Oriana Skylar Mastro, an expert on Chinese military and security policy, sets out to answer this question in her new book, “Upstart” (Oxford University Press), which offers a novel framework for understanding how China chose to compete on the international stage. A center fellow at the Freeman Spogli Institute for International Studies and faculty at the Shorenstein Asia-Pacific Research Center (APARC), Mastro draws on the political science and business literature to explain China’s thinking that allowed it to enter the great power club.

Mastro joined APARC Publications Manager George Krompacky to discuss her new book. Listen to the conversation on our SoundCloud or YouTube channels. A transcript is also available to download.

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The Startup Approach

In debating about China’s rise, one might fall into the trap of assuming that China would pursue its ambitions like the United States has. Mastro, however, argues that China does not act the same way as the United States or other would-be superpowers and does not have to compete everywhere and in the same manner to yield influence or dictate outcomes.

Acknowledging the highly politicized nature of China’s rise and U.S. competition with China, Mastro emphasizes a pragmatic approach in her book. “For the United States to compete effectively, we have to understand first what the situation is,” she says, ascribing her pragmatic outlook, at least partially, to her military career. Mastro continues to serve in the U.S. Air Force Reserve, currently as the deputy director of reserve global China strategy at the Pentagon.

Mastro shows that China’s buildup of power over the past three decades stems from pursuing a “startup approach,” that is, a careful mix of three strategies: emulation (mirroring U.S. activities in similar areas), exploitation (adopting U.S. strategies, but in different areas of competition, where the United States isn't strongly present), and entrepreneurship (applying innovative approaches to new and existing areas of competition). Throughout her book, she provides 22 case studies in the economic, military, and political realms to illuminate when China has used each of the three components of the startup strategy and explain why it has chosen a certain pathway at a given time.
 

Emulation, for example, is manifested in China's approach to mediation diplomacy, as it attempts to present itself as an international mediator to gain power and influence; in its pursuit of humanitarian aid, disaster relief, and peacekeeping operations; and its attempts to internationalize the renminbi.

Instances of exploitation include China’s use of arms sales to countries that can't buy them from the United States due to factors like treaty obligations or embargoes; its approach to free trade and industrial policy; and its ability to keep most U.S. forces out of Asia and disrupt those operating there (known as its anti-access/ area denial capability.

Examples of China’s entrepreneurial approach include its reliance on strategic partnerships instead of alliances; its nuclear strategy and protection of overseas interests (unlike the United States, China has no overseas bases and has not relied on a large nuclear arsenal); and its Belt and Road Initiative.  

By no means is China always successful. Mastro lists various examples indicating, she argues, that China chose the wrong strategy in its pursuit of power buildup, such as its attempts to emulate U.S. soft power or aircraft carrier capabilities. ”But I don't want us to be blind to the realities that a lot of what China does has been effective,” says Mastro. “It’s indisputable that what China has accomplished over the past 30 years is impressive.”

Emulation and Exploitation in Foreign Policy

One salient example of the United States’ misunderstanding of China's strategic approach pertains to China’s participation in international organizations. It is also a lesson in the importance of reevaluating and reinforcing the frameworks that govern international institutions.

International institutions, Mastro explains, have been a key mechanism for the United States to build and exercise power in a flexible, innovative manner. Confident in these institutions' ability to regulate state power in alignment with American interests, many in the United States believed that integrating China into the global order would push Beijing towards political and economic liberalization. This belief underpinned the U.S. support for granting China a most-favored-nation status in the 1990s and its entry into the World Trade Organization.

By the early 21st century, China had joined 50 international governmental organizations and more than a thousand international non-governmental organizations. Within these bodies, China sought to assume a leadership role comparable to that of the United States and its allies, aiming to steer agendas and influence outcomes. Not only did China turn out to be adept at working within the rules to shift institutional directions but also at exploiting loopholes, as, for example, in trade organizations, where its compliance with the established norms has been selective. The U.S. expectations about China’s economic liberalization and democratic reform, however, proved to be distorted.

“The underlying issue was the assumption that China would adopt a worldview similar to the U.S. upon deeper integration,” Mastro says. “Had there been a more nuanced understanding of China's strategic intentions, the U.S. might have reinforced certain norms and established new rules to limit China's influence more effectively.”

Taiwan and a Changing Military Balance of Power

Just as the United States was mistaken in believing that international institutions would limit China's actions in foreign policy, it might also be wrong in assuming that China's integration into the global economy has changed its stance on the use of force or that China will consider the cost of attacking Taiwan too high.

According to Mastro, Taiwan is another case where Beijing measures costs and benefits differently from Washinton. “While we might think there are constraints on Chinese [calculus on Taiwan], those constraints are often not actually in place.”

For China, Mastro explains, Taiwan is of utmost importance and deeply connected to the legitimacy of the Chinese Communist Party. She stresses that her research indicates that, as part of China's use of economic power, there is good reason to suspect that international isolation and condemnation in response to a Chinese assault on Taiwan would be relatively mild. ”Most strategic partnerships include clauses where countries agree not to let political issues like Taiwan affect their economic relationships,” Mastro says. “This, combined with the changing military balance of power, is something I hope readers understand from my book.

Lessons for U.S. Strategy

In the last chapter of her book, Mastro discusses the implications of China’s upstart strategy for U.S. policy and offers guidance on how Wahington can address China’s rise. “The United States needs to target its approaches to build and maintain a competitive edge with its own version of an upstart strategy,” Mastro writes. Specifically, the United States should avoid emulating all of China's successes, promote emulation where it maintains competitive advantages, close the gaps China exploits to build power, and embrace its unique entrepreneurial approaches.

“The overall goal should be to move competition into areas where the United States has an advantage and reduce the impact of Chinese strategies where China enjoys advantages,” Mastro notes.

But how realistic is it for the United States to play the long game in this manner, given its four-year election cycle and current politically polarized environment?

Mastro recognizes that not only does the U.S. domestic political system make it difficult for policies to continue from one administration to another, but it also increases the cost of entrepreneurial thinking for any administration interested in implementing a new approach during its four-year term. Entrepreneurial actions require a degree of experimentation, but our politicians are averse to taking risks with actions and policies that might require course adjustment.  

Ultimately, Mastro concludes, it is a question of leadership. “I think the rise of China and the challenge of China is of such importance and urgency that you need leaders to put their political aspirations aside and think in a more calculated, strategic way. You need that kind of leadership and courage in our system for us to be able to compete with China.”

This article originally appeared on the Stanford Law School's website.

Curtis J. Milhaupt, the William F. Baxter-Visa International Professor of Law at Stanford Law School, recently received a “Best Paper” award from the European Corporate Governance Institute (ECGI) for his 2023 working paper, “The (Geo)Politics of Controlling Shareholders.” Milhaupt is also a senior fellow, by courtesy, at the Freeman Spogli Institute for International Studies and affiliated faculty at Shorenstein APARC.

Milhaupt’s paper “makes a substantial and novel contribution to the literature on corporate governance and controlling shareholders by analyzing how the features of firms with controlling shareholders enhance their geopolitical significance,” according to a press release from ECGI. His paper advocates for the study of corporate governance to extend beyond traditional economic analysis to incorporate geopolitical and political-economic dimensions.

“Corporate governance scholarship on controlling shareholders has focused almost exclusively on shareholder wealth diversion and creation,” said Milhaupt, who was appointed a Fellow of the ECGI in January 2024. The ECGI selects as fellows individuals who have demonstrated scientific excellence or other outstanding achievements in the area of corporate governance and stewardship.

“It is an honor to be recognized for my effort to analyze the complex interplay between corporate control and wide-ranging geopolitical and domestic political concerns,” he said.

Milhaupt focuses his research and teaching on comparative corporate governance, the legal systems of East Asia, and Chinese state capitalism. In addition to numerous scholarly articles, he has co-authored or edited seven books, including Regulating the Visible Hand? The Institutional Implications of Chinese State Capitalism (Oxford, 2016), Law and Capitalism: What Corporate Crises Reveal about Legal Systems and Economic Development Around the World (Chicago, 2008) and Transforming Corporate Governance in East Asia (Routledge, 2008).

The prize will be awarded at the ECGI Annual Conference in Brussels on October 8, 2024.

You can view Professor Milhaupt's presentation of his award-winning paper on the Stanford Law School's YouTube channel.

Stanford University’s Walter H. Shorenstein Asia-Pacific Research Center (APARC) is delighted to share that Chris Buckley, the chief China correspondent for the New York Times, has won the 2024 Shorenstein Journalism Award for Excellence in Asia-Pacific Coverage. The award recognizes Buckley’s expertly crafted narratives unraveling the intricate tapestry of politics, social dynamics, and security issues in China and Taiwan. He will receive the award at a public ceremony at Stanford in October 2024.

Buckley’s reporting journey spans over two decades, covering Chinese politics, foreign policy, social change, and environmental issues. In recent years, he has focused on detailing the complex dynamics of the Chinese Communist Party’s governance, the transformative impact of Xi Jinping's leadership on China’s’ domestic and international affairs, and the varied responses to these developments from the Chinese populace. Since relocating to Taipei in late 2022, he has expanded his coverage to include Taiwanese society, politics, and culture, providing a comprehensive view of the region’s evolving landscape. His perceptive coverage navigates the challenges of tightened restrictions on foreign press reporting on China.

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Buckley was with colleagues a finalist for the 2020 Pulitzer Prize in international reporting for gripping accounts that revealed China's covert efforts to repress millions of Uyghurs and other ethnic groups in the Xinjiang region through a system of labor camps, harsh treatment, and extensive surveillance. He was also part of the Times team that won the 2021 Pulitzer Prize in Public Service for coverage of the Covid pandemic. One of several Times correspondents to race into Wuhan in the earliest days of the Covid outbreak, he spent 76 days in the city during the lockdown there, reporting on the Chinese government’s opacity as the Coronavirus spread and covering the public outcry following the death of whistleblower Dr. Li Wenliang.

In May 2020, Buckley was forced to leave mainland China, where he had lived and worked for more than two decades, and was then barred from working in Hong Kong. Based in Taipei since 2022, he has continued to report on China and now also covers Taiwan.

“With his journalistic prowess, profound insights into China’s political system, and finely honed accounts, Chris Buckley has shined a critical light on the shifts in Chinese society and politics and broke numerous stories despite facing government backlash and personal sacrifices,” said APARC Director Gi-Wook Shin. “We are honored to recognize him with the Shorenstein Journalism Award.”

Before rejoining the New York Times in 2012, Buckley was a senior correspondent in Beijing for Reuters News Agency for 7 years, and before that worked as a researcher and reporter for the Times and International Herald Tribune in Beijing. He grew up in Sydney, Australia, earned a bachelor's degree in history from the University of Sydney, studied Chinese Communist Party history at Renmin University in Beijing, and received a doctorate in Chinese studies from Australian National University.

Presented annually by APARC, the Shorenstein Award carries a $10,000 cash prize and commemorates the legacy of APARC’s benefactor, Mr. Walter H. Shorenstein, and his twin passions for promoting excellence in journalism and understanding of Asia. The selection committee for the award praised Buckley’s exemplary work as embodying the award’s purpose, commenting that he is “truly unparalleled in his knowledge and understanding of China.”

The committee members are William Dobson, co-editor of the Journal of Democracy; Anna Fifield, the Washington Post's Asia-Pacific editor and recipient of the 2018 Shorenstein Journalism Award; James Hamilton, the Hearst Professor of Communication, chair of the Department of Communication, and director of the Journalism Program at Stanford University; Louisa Lim, associate professor, Audio-Visual Journalism Culture and Communication at the University of Melbourne; and Raju Narisetti, publisher of McKinsey Global Publishing at McKinsey and Company.

Twenty-two winners previously received the Shorenstein Award. Recent honorees include The Caravan, India's premier magazine of long-form journalism; Emily Feng, international correspondent for NPR covering China, Taiwan, and beyond; Swe Win, editor-in-chief of Myanmar Now; and Nobel Laureate Maria Ressa, CEO and president of the Philippines-based news organization Rappler.

Information about the 2024 Shorenstein Journalism Award ceremony and panel discussion celebrating Buckely will be forthcoming in the fall quarter.

In recent years, China's military modernization and assertive actions have led to more frequent and dangerous encounters between the People's Liberation Army (PLA) and the militaries of key regional players in the Indo-Pacific. Each encounter heightens the chance of a military conflict in the region. A new report published by the National Bureau of Asian Research (NBR) assesses the PLA’s strategic thinking on escalation control, analyzing the potential for conflict in the region and exploring regional responses and implications for deterrence.

Edited by Chinese military expert Oriana Skylar Mastro, a center fellow at APARC and the Freeman Spogli Institute for International Studies, the report, "Encounters and Escalation in the Indo-Pacific: Perspectives on China’s Military and Implications for Regional Security," comprises six essays, each detailing an encounter with the PLA. These case studies include China’s maritime disputes with Japan, the Philippines, and Vietnam and its increasingly aggressive military activities vis-à-vis Australia, India, and Taiwan.

The authors of the essays are current and former practitioners with insight into their government’s experiences and thinking. Their assessments emphasize the need for Asia-Pacific countries to reevaluate their defense capabilities and adopt clear and consistent policy approaches to navigate the complex geopolitical landscape in the region.

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Tactics, Intentions, and Shared Threat Perceptions

As the PLA adopts a more assertive approach beyond its maritime boundaries, nations across the Indo-Pacific region have increasingly experienced perilous encounters with the Chinese military. For example, the PLA's intensifying aggression around Second Thomas Shoal in the South China Sea led to several incidents of maritime tension with the Philippines. Likewise, a Chinese fighter aircraft intercepted an Australian surveillance aircraft during its routine activity in international airspace over the South China Sea, posing a safety risk to the Australian aircraft and its crew.

The authors of the six case studies in the NBR report agree "that China harbors problematic intentions and is using increasingly aggressive and risk-acceptant tactics to accomplish its goals." While they show that China uses different tactics in different situations and differ in their evaluations of the most troublesome tactics for their respective countries, their analyses share several common themes, which Mastro reviews in her introduction to the report, titled "Close Encounters with the PLA: Regional Experiences and Implications for Deterrence."

First, “China doctrinally does not take any responsibility for the deterioration in the strategic environment,” writes Mastro. “All six case studies mention China’s tendency to publicly blame the other country for whatever crisis unfolded.”

China also sees crises as opportunities, Mastro explains, and most case studies indicate that the crises at stake were deliberate acts of PLA escalation. All case studies also reflect Chinese strategic thinking on deterrence as serving dual purposes: firstly, to discourage adversaries from certain actions, and secondly, to influence their behavior in line with the deterrer's intentions, ultimately requiring them to comply with the deterrer's preferences.

Another common theme is that the PLA's assertive actions have prompted all six nations studied in the report to boost security cooperation with the United States and other regional powers, albeit to varying extents. For example, in addition to enhancing its strategic partnership with the United States, India has enhanced its defense ties with the two other Quad members (Japan and Australia) and regional partners such as Vietnam, Singapore, and the Philippines.

Moreover, based on their encounters with the PLA, almost all regional players have concluded that strengthening their military capabilities will discourage Chinese aggressive behavior in the future, Mastro says, noting that “changes in defense posture have perhaps been the most drastic in Japan.”

Policy Implications

The report's case studies offer policy recommendations for deterring China, emphasizing the importance of a consistent approach that includes strengthening deterrence capabilities through military modernization, firm stances on border disputes, and close security cooperation with the United States, its allies, and other like-minded nations. While there is consensus that military deterrence needs to be balanced with diplomatic engagements to reduce tensions, each regional player views the effectiveness of diplomacy and cooperation with China differently.

“Ultimately,” Mastro concludes, “the path forward for maintaining peace and stability in the Indo-Pacific region requires a cohesive strategy that prioritizes long-term security interests, demonstrating the essential role of international cooperation and the strategic interplay between military readiness and diplomatic efforts in navigating China’s aggression.”

Learn more about the report and download Mastro’s introductory essay > 

Note: this piece builds on a previous article by the authors, published by The Washington Quarterly.

No foreign policy challenge is more important, or difficult, than finding a way to simultaneously deter and engage China without provoking unwanted behaviors. Achieving this requires understanding the perceptions and priorities shaping Beijing’s actions.  

Despite China’s worsening economic problems and waning international trust, the March 2024 session of the National People’s Congress has reaffirmed Beijing’s determination to stick with policies fuelling domestic discontent and alienating foreign partners. The reasons are structural, not simply strong-man egoism. Policies in China are tightly interconnected, reflecting hard-to-change perceptions reinforced by bureaucratic and personal interests. Changing one facet requires changing the entire policy package. For now, that package prioritizes domestic stability and security over economic growth.

Beijing has fallen into an old mindset that sacrifices growth to reduce vulnerability to external and internal threats that leaders believe endanger the regime and China’s future. This is not good for China, the United States, or the world. Washington cannot achieve immediate or fundamental changes in China’s behavior but ill-considered actions can make things worse. The best we currently can achieve is wary coexistence, careful management to reduce dangers, and keeping the way open for a better day.

Read the rest of the essay online at the East Asia Forum.