The Flexible Cost of Insulting China: Trade Politics and the “Dalai Lama Effect”

In this article, I investigate trade relations between Norway and China after the 2010 Nobel Peace Prize was awarded to Liu Xiaobo, a leading Chinese dissident. It is a case study of China’s political use of economic levers in its international relations. Concluding that Sino-Norwegian trade relationship did not suffer the severe impact that many predicted, I argue that the threshold for China to enact punitive economic actions seems higher than is often acknowledged. China’s sensitivity is to the costs and benefits of the relevant country’s trade.