Dividing Asean and Conquering the South China Sea: China's Financial Power Projection by Daniel C. O'Neill (review)

The title of Daniel C. O'Neill's book, Dividing ASEAN and Conquering the South China Sea: China's Financial Power Projection, is probably out of order. Those looking for a work on the South China Sea might at first be disappointed, but O'Neill's analysis is well worth the time of anyone interested in China's pursuit of power, both in Asia and around the world. The author builds a compelling academic argument for something that many Southeast Asia watchers probably already know in their bones, but for which they might lack an analytical framework: that Beijing uses its financial assistance to buy influence and divide the region. That is what the book is about, and O'Neill could have just as effectively made his case on the cover by highlighting Taiwan, Xinjiang or the United Nations Security Council; indeed, he does so throughout the volume.

O'Neill's argument will not come as a surprise to most, but how he frames and tests it is elegant. He maintains that as an independent variable, Chinese economic assistance to a given state, mainly in the form of loans and investment by state-owned enterprises, is correlated to Chinese influence in that country through the intervening variables of regime type and level of development. Put simply, China can more effectively buy influence in poorer more authoritarian regimes than it can in wealthier more democratic ones. This is because authoritarian rulers rely on a smaller pool of supporters, what O'Neill calls the "ruling coalition" or "selectorate", to remain in power. Authoritarian leaders can use Beijing's economic assistance to disburse rents to that small group while ignoring any opposition to Chinese investments or loans from the wider public. That is not the case in more democratic states where the "ruling coalition" is a much larger segment of the population, and civil society, the media and other branches of government can more effectively express grievances.

To make his case, O'Neill examines the very different stories of Chinese investment and loans in authoritarian Cambodia, the more democratic Philippines, and Myanmar, where there was a clear change in regime type in recent years. These three case studies are where the work really shines, and readers will be hard-pressed to argue with the author's conclusion that, while not deterministic, regime type and development level are strongly correlated to the effectiveness of China's ability to leverage economic assistance for political gain. It is also hard to deny that Beijing knows what it is doing when it comes to buying off authoritarian states (and much less so in its clumsy efforts to influence democracies). O'Neill points out that no other extant theory can explain the enormous levels of Chinese foreign direct investment in otherwise inhospitable environments like Cambodia and Laos, where Chinese investment amounts to a jaw-dropping 3.3 and 6.9 per cent of overall GDP, respectively.

The positions countries take on the South China Sea are a useful measurement for O'Neill's dependent variable of Chinese influence and the choice is entirely understandable. The topic is undoubtedly timely and the stories of Cambodian intransigence at the 45th ASEAN Ministerial Meeting in 2012 and the former Philippine government's pursuit of its claims under the United Nations Convention on the Law of the Sea will be familiar to most readers. But the book's opening chapters, covering the background information on the maritime disputes, are its weakest and could present an impediment to some readers. Close watchers of the South China Sea will notice a number of mistakes, some minor and some less so. A map near the beginning of the book inaccurately depicts the claims of most of the Southeast Asian parties (p. 6), the author repeatedly conflates "maritime territorial claims" as one and the same thing (p. 52), miscounts the number...