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Abstract
This paper identifies a causal path between economic statecraft and economic power using Chinese economic statecraft in Venezuela as a case study. Chinese economic statecraft has become a unique phenomenon in the global economy. From investments in infrastructure projects to energy mining opportunities, foreign direct investments, and patient capital loans, Chinese economic statecraft differs from previous examples of statecraft. China has implemented its economic statecraft with the goal of achieving its strategic interests in overseas markets and expand its economy by gaining access to resources. This trend has resulted in the Chinese Belt and Road Initiative (BRI), a massive overseas economic investment project aimed to connect China with the rest of the world’s economies. While the conventional wisdom on Chinese economic statecraft would agree that China is expanding its economic power, the conventional wisdom lacks a clear path between economic statecraft and economic power. Additionally, the literature on Chinese economic statecraft seldom includes sufficient case studies analyzing the effects of economic statecraft in Latin America. This paper argues that there is a two-way path that clarifies when economic statecraft creates economic power. First, a state is said to achieve economic power when its economic statecraft capitalizes on material or power resources from a target state. Second, a state can achieve economic power over a target state when its economic statecraft includes economic coercion and economic inducements that result in a target state’s changing its behavior. Evidence of change in a target state’s behavior includes adoption, maintenance, refrainment, or abandonment. In the context of Chinese economic statecraft in Venezuela, China has been able to gain economic power by gaining access to valuable geostrategic resources such as oil and gold. Additionally, China has been able to gain economic power in Venezuela by using methods of 3 economic inducements and economic coercion that have influenced the Venezuelan government into adoption reforms to its economy.