Learning to Co-operate: China's Multilateral Approach to Asian Financial Co-operation

Abstract

This study explains the ideational sources of China's proactive multilateral diplomacy towards Asian financial co-operation by employing a learning thesis. Challenging prominent materialist explanations (power-transition thesis, realist balancing thesis and economic utility thesis), this study argues that the collective learning of Chinese policy elites through cognitive dissonance, feedback effects and transnational persuasion explains much of the change in China's relational identity and philosophical beliefs regarding regional co-operation. These prior ideational shifts helped to determine China's behaviour change from its muted opposition to Asian financial co-operation in the 1990s to its active support of regional financial co-operation in the early 2000s, as evidenced in the emergence of the Chiang Mai Initiative, Chinese–Japanese–South Korean trilateral financial co-operation and the Asian Bond Fund Initiative. Chinese learning also suggests that more fundamental changes in China's national preference may make its support for Asian financial co-operation more consistent and stable in the foreseeable future than sceptics might anticipate.