Liao, Jessica C

Abstract: The policies of Going Out and Good Neighbor have worked in tandem to direct Chinese diplomacy toward Southeast Asia over the past decades. This article asks how these policies have shaped Chinese energy and mining firms’ business decisions in the region. Using a combination of quantitative and qualitative data, this article argues that while Going Out and Good Neighbor have contributed to the growth of China’s energy and mining development projects in Southeast Asia, this outcome is not merely the result of a state-directed initiative. The growth is also driven by Chinese state-owned firms that take advantage of Beijing’s policy agenda and the institutional shortcomings behind it to plow state-backed resources into business partnerships with weak rule-of-law governments in the region. These partnerships and the associated projects are often touted as an arm of Chinese diplomacy, emboldening these firms to make risky expansion. Moreover, market, diplomatic, social, and geographic factors inherent to Southeast Asia further catalyze Chinese firms’ risky business practices while at the same time Beijing, prioritizing diplomatic relations over good governance, has been slow to police problems stemming from its firms’ dubious partnerships. In the end, this situation has hurt China’s image, contrary to Good Neighbor’s intended objectives. Full text available here.