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Anti-foreign boycotts as a tool of economic coercion: the case of China

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Anti-foreign boycotts as a tool of economic coercion: the case of China

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Content 1

Anti-Foreign Boycotts as a
Tool of Economic Coercion: The Case of China

Mingmin Yang

Dissertation for the Degree of Doctor of Philosophy

Political Science and International Relations Program
Faculty of the USC Graduate School
University of Southern California
August 2019

2
Table of Contents

Lists of Tables and Figures ................................................................................................................. 4
Abstract ............................................................................................................................................... 5
Acknowledgement .............................................................................................................................. 6
Chapter I Introduction ....................................................................................................................... 8
1.1. Puzzle .................................................................................................................................................... 14
1.2. Main Argument ..................................................................................................................................... 21
1.3. Organization of the Dissertation ........................................................................................................... 24
Chapter II Theory ............................................................................................................................ 27
Introduction ................................................................................................................................................ 27
2.1. Literature Review ................................................................................................................................. 28
2.1.1. Conceptualization of Boycotts .......................................................................................................... 28
2.1.2. Boycotts as Economic Statecraft ....................................................................................................... 30
2.1.3. China’s Economic Statecraft ............................................................................................................. 36
2.1.4 Determinants of Boycotts ................................................................................................................ 44
2.2. Theory .................................................................................................................................................. 48
2.3. Research Design .................................................................................................................................. 52
Chapter III Allowed Boycott: 2012 Diaoyu/Senkaku Islands Crisis ............................................... 59
Introduction ................................................................................................................................................ 59
3.1. Event: Senkaku/ Diaoyu Islands Dispute ............................................................................................ 60
3.2. Allowed Nationalism ............................................................................................................................ 65
3.3. Allowed Boycott ................................................................................................................................... 70
3.4. Other Economic Statecrafts ................................................................................................................. 75
Conclusion .................................................................................................................................................. 76
Chapter IV Stifled Boycotts: China-Philippines Maritime Disputes .............................................. 78
Introduction ................................................................................................................................................ 78
4.1. Events: China-Philippines Maritime Disputes ..................................................................................... 79
4.2. Manipulation from Chinese Government: Contained Nationalism ................................................... 84
4.3. Restrained Economic Nationalism ..................................................................................................... 89
4.4. Economic Statecraft: Not Applying .................................................................................................... 92
Conclusion ................................................................................................................................................. 94

3
Chapter V Boycott as an Economic Coercion: Sino-Korean Diplomat Feud over THAAD Missile
System ............................................................................................................................................... 96
Introduction ................................................................................................................................................ 96
5.1. Event: THAAD Deployment and Reaction from Beijing .................................................................. 97
5.2. Nationalism Unleashed ..................................................................................................................... 102
5.3. Boycott as an Economic Coercion .................................................................................................... 110
5.4. Other Economic Statecrafts ............................................................................................................... 119
Conclusion ............................................................................................................................................... 120
Conclusion ...................................................................................................................................... 121
Main Findings and Contributions ............................................................................................................ 121
Avenues for New Research ....................................................................................................................... 126
The Future of Anti-Foreign Boycotts ........................................................................................................ 129
Appendix ........................................................................................................................................ 131
Appendix 1 ............................................................................................................................................... 131
Appendix 2 ............................................................................................................................................... 136

Bibliography ................................................................................................................................... 139

4
Tables

Table 1.1 China’s History of Popular Boycotts
Table 1.2 Boycotts and Protests Occurred in International Conflicts
Table 2.1 China Coercive Tools by Case
Table 2.2 Allowed, Stifled and Manufactured Boycotts
Table 2.3 Table of DVs and IVs
Table 3.1 Topics of Posts on Weibo with Key Words ‘Diaoyu Island’ from August 13 to August 19
Table 5.1 Topics of News Related to “THAAD” in People’s Daily in 2016 and 2017

Figures

Figure 1.1 International Disputes China Involved and Boycotts Event in Past 20 Years
Figure 2.1 Export to China/ GDP Ratio*100 in 2016
Figure 2.2 Dependency on Chinese Tourism for Regional Members
Figure 3.1 Baidu Search Counts in Terms of Key Word “Diaoyu Islands (钓鱼岛)” in 2012
Figure 3.2 Sentiment Analysis of Foreign Ministry Spokesmen’s Remarks on Senkaku/Diaoyu Islands in
2012
Figure 3.3 Sentiment Analysis of News on Senkaku/Diaoyu Islands from People’s Daily from 2010 to 2012
Figure 3.4 Sentiment Analysis of News on Senkaku/Diaoyu Islands from People’s Daily in 2012
Figure 3.5 Daily Posts Containing “Diaoyu Islands (钓鱼岛)”
Figure 3.6 Japanese Cars Sales in China Comparing with Korean and Western Cars companies.
Figure 3.7 Chinese Tourists Visiting Japan (Comparing with Korean and Taiwanese Tourists)
Figure 4.1 Baidu Search Counts in Terms of Key Word “Ruling of South China Sea ( 南海仲裁)” in 2012
Figure 4.2 Weibo Post from People ’s Daily “China: We can ’t Lose even One Single Dot (# 中国一点
也不能少#) ”
Figure 4.3 Sentiment Analysis of Foreign Ministry Spokesmen’s Remarks on South China Sea and
Philippines
Figure 4.4 Sentiment Analysis of News Related to South China Sea and Philippines from People’s Daily
Figure 4.5 Chinese Tourists Visiting Philippines (Comparing with Japanese Tourists)
Figure 4.6 Monthly Banana Export from Philippines to China and the Japan from Jan 2010 to Dec 2017
Figure 5.1 Baidu Search Counts in Terms of Key Word “THAAD (萨德) ”
Figure 5.2 Baidu Search Counts in Terms of Key Word “Korea(韩国) ”
Figure 5.3 Chinese Monthly News Related to ‘THAAD (萨德) or “Lotte (乐天) ” on Baidu
Figure 5.4 Sentiment Analysis of News related to THAAD from People’s Daily
Figure 5.5 Sentiment Analysis of Foreign Ministry Spokesmen’s Remarks on THAAD and Lotte
Figure 5.6 Sentiment Analysis of Foreign Ministry Spokesmen’s Remarks on Lotte
Figure 5.7 Monthly Export from South Korea to China and the U.S. from Jan 2012 to Feb 2018
Figure 5.8 Korean Cars Sales in China Comparing with Japanese and Western Cars companies 1
Figure 5.8 Korean Cars Sales in China Comparing with Japanese and Western Cars companies 2
Figure 5.9 Chinese Tourists Visiting Korea (Comparing with Japanese and Taiwanese Tourists)

5
Abstract

An important part of China’s rising economic power is its large market of 1.4 billion
consumers. For the last few decades, we have observed the Chinese government utilizing such
consumer power through boycotts to demonstrate its displeasure against certain actions taken by
foreign governments. But anti-foreign boycotts do not occur every time there is an international
dispute in China. For instance, boycotts did not happen during Sino-Japanese conflicts in 2005. But
in 2012, China's relations with Japan experienced a major setback when Japan formally incorporated
the Senkaku/Diaoyu islands as part of its territory. In this case, the anti-foreign boycott dealt a huge
blow to Japanese product sales in China. The important question, therefore, is what factors trigger
anti-foreign boycotts in certain occasions but not others?
This dissertation argues that the Chinese government uses anti-foreign boycotts as a strategy
to further its foreign policy goals. On the one hand, citizens might decide to mobilize to boycott or
not, depending on whether there is a genuine anti-foreign sentiment. On the other hand, the Chinese
authority can orchestrate popular boycotts against its foreign opponents in support of its foreign
policy goal. This dissertation uses text analysis to show how the Chinese government manipulates
its citizens' anti-foreign sentiments via the state media as it signals "green or red light" to anti-foreign
boycotts, and even encourages boycotts when the withdrawal from commercial relations favor
Chinese foreign policy. For the Chinese government, boycotts are not only a display of anti-foreign
sentiment from the public but also a means to influence foreign opponents’ stance against China by
imposing economic loss directed at them.
It is worth noting that during the popular boycotts, the Chinese economy may also be at risk,
particularly if Chinese citizens reduce purchases of foreign-branded goods that are actually
manufactured in China. In other words, the Chinese government also exposes their own country to
economic losses as it allows boycotts, a decision that acts as a credible signal of resolve to its foreign
foes. In addition, this dissertation finds that boycotts could only work as an economic statecraft when
the state is in full control of the media; only when media is monitored could it become a tool to
manage anti-foreign sentiment. Moreover, foreign products could be targets of boycotts only when
the boycotting country is integrated into the world economy, —i.e., the foreign products are in the
market of a boycotting country.
This dissertation presents three cases to support the argument above. The first case, the 2012
conflict with Japan over the Senkaku/Diaoyu islands, shows an orchestrated anti-foreign boycott
lasting several months. In the second case, following the 2016 judgment of an arbitration tribunal in
Hague that rejected China's claims to historic rights in the South China Sea, the Chinese government
discouraged anti-foreign boycotts, judging that this would not advance its foreign policy interests. In
2017, the Chinese government encouraged boycotts against South Korean products after Korea's
decision to deploy the anti-missile system, known as Terminal High Altitude Area Defense
(THAAD). These three cases verify that the Chinese government is able to allow, to block, or to
create voluntary consumer boycott of a foreign product being sold in China, and Chinese
government pursues anti-foreign boycotts only when they pose relatively low costs to its overall
international trade strategy.

6

Acknowledgement

Writing a dissertation is like running marathon, instead of sprinting. That is what I was told
by my senior colleagues in PhD program. I had no difficulty understanding the metaphor for taking
baby steps every day to get the work done. However, little did I know is that writing a dissertation is
not only like running a marathon, but also running a marathon without knowing the route and where
the finish line is. Once in a while, researchers get lost or the lost their stamina on their way. Without
proper guidance and supply, a Ph.D. student could hardly finish this journey, and I am incredibly
fortunate to have a dissertation committee, scholars, friends and family members to direct and help
me through the whole process.
I would first like to acknowledge my dissertation committee: Saori N. Katada, David C. Kang,
Benjamin A.T. Graham, and Nan Jia. Professor Katada strongly promoted my academic
development with incisive feedback and constant moral support in my seven years at USC. She is
an amazing mentor, leading to my dissertation project on boycotts, and guiding me through the whole
process with great patience. I feel grateful for her guidance through my Ph.D. journey. She has shown
me, by her example, what a respected scholar and individual should be.
Besides my advisor, I would like to acknowledge the rest of my thesis committee: Prof. Kang,
Prof. Graham, and Prof. Jia, for their warm support. Prof. Kang encourages me to think from a
bigger picture as well as to ask interesting questions as a scholar. He also nurtures my understanding
of academia as a profession. He is a great shifu (teacher), not only helping us in the profession but
also providing the wisdom of life. Prof. Graham teaches me working ethics, professional methods as
well as networking skills. He also provides insightful comments for my research. He is the role model
for young scholars, and has a huge influence on me. Prof. Jia Nan makes perceptive comments,
helping me build connections and providing me a great resource for research. She is a valuable
support and I always feel encouraged by her enthusiasm and energy for research. I am indebted to
them for cultivating me as a scholar in my time at USC.
I would also like to acknowledge other individuals at USC, who supported my Ph.D. studies
over the years. Many professors, including Joshua Aizenman, Pablo Barbera, Erin Baggott Carter,
Morris Levy, Daniel Lynch, Stanley Rosen, Jeffery Sellers, and Carol Wise, contributed to my
learning. Program staff, including Veri Chavarin, Linda Cole, Cathy Ballard, Indira Persad, and
Aurora Ramirez, assisted me in important but often inconspicuous ways. The staff from the Korean
Studies Institute (KSI), including Linda Kim and Sarah Merrill Shear, also made using the KSI
research resources easy and enjoyable.
I also incurred enormous intellectual debts to the many scholars who helped me develop my
project and kept me on the right track in the field: Dr. Da-Nien Liu and Dr. Roy Chun Lee from
Chung-Hua Institution for Economic Research, Prof. Christian Hess from Sophia University, Mr.
Yashushi Kudo and Ms. Aya Sato from the Genron NPO, Dr. Zhe Ren from IDE-JETRO, Prof.
Amako Satoshi from Waseda University, Prof. Pham Sy Thanh from Vietnam Institute for
Economic and policy research, as well as the scholars from Beijing University, Renmin University
of China and Horizon Research Consultancy Group.
7
This work would not have been possible without substantial institutional support over the
years. I have been fortunate to receive substantial institutional support over the years. At USC, I
received funding for my education and research from the Dornsife College of Letters, Arts and
Sciences, the School of International Relations, the Center for International Studies, the East Asian
Studies Center, the Korean Studies Institute, and the US-China Institute.
I also received tremendous support from my peers at USC, especially Therese Anders, Jiun
Bang, Victoria Chonn Ching, Juve Cortes, Ronan Fu, Joey Huddleston, Han-hui Hsieh, Tom
Jamieson, Peter Knaack, Brian Knafou, Stephanie Kang, Gloria Ku, Ada Yue Li, Alex Lin, Xinru
Ma, In Young Min, Paul Orner, Mark Paradis, Simon Radford, Jihyun Shin, Mao Suzuki, Pheobe
Tang, Scott Wilbur and Shiming Yang. The big family of POIR is the reason I could survive the
process of Ph.D program, and I owe them a particular debt of gratitude.
Finally, I would like to thank my family and my church for their love and support. My parents,
my grandmother, my brother, sister in law and my church members is the reason I could make
through my journey of “dissertating.” The end of dissertation is the beginning of for my next
marathon of life. With family, friends, and God, I treasure the time in USC and look forward to
next chapter.

Mingmin Yang

Spring 2019

8
Chapter I Introduction
This dissertation is the study of anti-foreign boycotts in an authoritarian state, focusing on
China, and answering a puzzling characteristic of anti-foreign boycotts: Why do anti-foreign boycotts
occur in China during certain international conflicts but not others? When Sino-Japanese territorial
disputes occurred in 2012, there were anti-Japanese boycotts in China. During South Korea's
deployment of the THAAD anti-missile system from 2016 to 2017, Korean products became the
victims of cooling China-Korea ties. In contrast, albeit there were calls for a boycott of the
Philippines and the U.S after an international arbitration court ruled in favor of Manila in its dispute
with Beijing over the South China Sea in 2016, there were no signs that the products from two
countries being boycotted. How could one explain these variations?
In this study, I am focusing on the boycotts intended to inflict economic loss on foreign
countries in an effort to coerce the targeted country to alter an offensive behavior against China. As
consumers are increasingly aware of the fact that their consumption behavior has negative social
consequences with considerable implications, many people, therefore, feel obligated to consume
more consciously and ethically. Boycotts were studied in business studies and economics,
1
but are

1
Subhash Sharma, Terence. A. Shimp and Jeongshin Shin, “Consumer ethnocentrism: A test of antecedents and
moderators,” Journal of the Academy of Marketing Science 23, 1 (1995): 26–37.
Jill Klein, Richard Ettenson, and Marlene D. Morris, “The Animosity Model of Foreign Product Purchase: An
Empirical Test in the People’s Republic of China,” Journal of Marketing, 62, January (1998): 89–100.
Erdener Kaynak and Kara, Ali. “Consumer perceptions of foreign products: An analysis of product-country images
and ethnocentrism,” European Journal of Marketing 36(7/8) (2002): 928–949.
Wolfgang Hinck. “The role of domestic animosity in consumer choice: Empirical evidence from Germany.” Journal
of Euro marketing 14(1/2) (2005): 87–104
Kenichi Ishii, “Nationalistic Sentiments of Chinese Consumers: The Effects and Determinants of Animosity and
Consumer Ethnocentrism,” Journal of International Consumer Marketing, 21 (4) (2009): 299–308.
Aviv Shoham, Moshe Davidow, Jill G. Klein, and Ayalla Ruvio, “Animosity on the home front: The intifada in Israel
and its impact on consumer behavior.” Journal of International Marketing 14(3) (2006): 92–114.
Ravi Pappu, Pascale G Quester, and Ray W Cooksey. “Country image and consumer-based brand equity:
Relationships and implications for international marketing.” Journal of International Business Studies 38 (2007): 726–
745
9
not a popular topic in field of political science. In my knowledge, this dissertation is one of the few
studies examining popular boycotts in political science.
Anti-foreign boycotts are rarely discussed in the studies of economic statecraft. Economic
statecraft is “the use of economic tools and relationships to achieve foreign policy objectives.
2
” But
for some scholars, economic statecrafts and economic sanctions are terms that could be used
interchangeably.
3
These works limited the definition of economic statecrafts to the sphere of
economic sanctions, which are defined as “withdrawal of customary trade and financial relations for
foreign and security policy purposes.”
4
Even in the classic work, Economic Statecraft, David Baldwin
did not include anti-foreign boycotts in his thorough evaluation of the techniques. For Baldwin,
economic statecrafts contain positive and negative sanctions, but they are limited to trade and capital
policies.
5
William J. Norris updates the definition, arguing that such manipulation occurs through “a
range of state policy tools including sanctions, taxation, embargoes, trade agreements, asset freezing,
engagement policies, currency manipulation, subsidies, tariffs, trade agreements, etc.
6
" Nevertheless,
there are few discussion of anti-foreign boycotts in the literature of economic statecrafts.
On the other hand, the role of state is rarely discussed in the literature of boycotts in the
realm of business studies. These studies focus on the general relationship between individuals'
attributes and their willingness or unwillingness to buy a foreign product. The analyses of these

2
Mastanduno Michael, “Economic statecraft, Interdependence, and national security: Agendas for research,” Security
Studies, 9:1-2 (1999): 288-316
3
Daniel W. Drezner, “The Hidden Hand of Economic Coercion.” International Organization, 57, Summer (2003):
643-659
4
Jonathan Masters. “What Are Economic Sanctions? Council on Foreign Relations.” CFR, last modified: August 7,
2017. https://www.cfr.org/backgrounder/what-are-economic-sanctions
5
David Baldwin, Economic Statecraft. (Princeton, N.J.: Princeton University Press 1971), 25.
6
William J. Norris, Chinese Economic Statecraft: Commercial Actors, Grand Strategy, and State Control. (Ithaca:
Cornell University Press, 2016), 11.

10
studies are mainly at the individual level, and most of the extant literature focuses on the effect of
consumers’ socio-psychological attributes on their intention and/or behavior.
7
The dependent
variables are individuals’ self-reported willingness or behavior. Put simply, the independent variables
are consumers' internal factors. External factors, such as bilateral economic, political, or diplomatic
relations, have received less attention. Moreover, this literature assumes that boycotts involves a
voluntary withdrawal from commercial relations; this means that the 'non-voluntary,’ state-
manipulated boycotts are ignored by scholars. Furthermore, even though studies show that
consumers might not care where products come from and how they are made,
8
in some cases,
authoritarian governments could define what is 'patriotic', 'rational' and 'moral’ consumption,
highlighting or condemning certain foreign products in line with their political agenda.
Boycotts are political collective actions. When boycotts are triggered by international events,
it involves the factors constantly studied in International Relations, such as Foreign Direct Investment
(FDI), host and home countries, as well domestic factors such as domestic business and consumers.
It should be a fascinating topic for a political scientist to study, and yet while economic and business
scholars have examined the popular boycotts and journalists have been quick to label and critique
boycotts in China, political scientists have not systematically studied boycotts and have produced less
research on why boycotts occur.
To fill in the gap between these two streams of literature, this dissertation studies how popular
boycotts
9
could work as economic statecrafts, supplementing a new technique to the literature.

7
Erdener Kaynak and Ali Kara, “Consumer perceptions of foreign products: An analysis of product-country images
and ethnocentrism,” European Journal of Marketing 36(7/8) (2002): 928–949; Ravi Pappu, Pascale G Quester, and
Ray W Cooksey. “Country image and consumer-based brand equity: Relationships and implications for international
marketing.” Journal of International Business Studies 38 (2007): 726–745.
8
Devinney Timothy, Pat Auger, Giana Eckhardt, The Myth of the Ethical Consumer. (Cambridge University Press:
Cambridge: 2010).
9
In the interest of style, I will use the terms anti-foreign boycott and popular boycott interchangeably.
11
Furthermore, these studies also examine that under what kind of circumstances states could achieve
their foreign policy goal by manipulating anti-foreign boycotts. To put it in another way, this work
investigates alternative determinants of boycotts, providing a new dimension for boycott literature.
This dissertation contributes to the empirical study of economic statecraft in China, arguing
that the Chinese government turns anti-foreign sentiments on and off as economic statecraft.
Consumers could work as a political weapon.
10
Using state media, the Chinese government manages
to influence people's sentiment, and signal "green light" and "red light" to boycotts against its foreign
opponents. When anti-foreign boycotts occur and favor China's foreign policy, the Chinese
government monitors the events and sometimes even encourages the popular boycotts; when
occurred anti-foreign boycotts are not in accordance with China's foreign policy, the Chinese
government smothers the incidents, even though they create little harm to social stability. On the
one hand, the target of anti-foreign boycotts is to put pressure on foreign companies, forcing the
home countries of these FDIs to comply with Chinese foreign policy objectives. On the other hand,
this is also a technique to ensure that public opinion goes hand in hand with state foreign policy
intent, making sure the domestic audience follows the 'rational patriotism' that the government
prefers.
China, as an authoritarian state, has a rare advantage in using anti-foreign boycotts as a
coercive economic measure. China fully controls the media, which is how the Chinese government
is able to employ state media to encourage popular boycotts. Chinese leaders are standing “over the
fire pit of nationalism with a fan in one hand and a hose in the other.”
11
The fan and hose could

10
Dorothy J Orchard, “China's Use of the Boycotts as a Political Weapon,” The Annals of the American Academy of
Political and Social Science (1930), pp. 252–261.
11
Ben Bland et al., "China wields power with boycotts diplomacy", Financial Times, May 13, 2017,
https://www.ft.com/content/c7a2f668-2f4b-11e7-9555-23ef563ecf9a
12
only work when there is little opposition from the media. Moreover, the Chinese government still
plays a leading role in fostering and guiding capitalist accumulation,
12
and Beijing’s grip on the
economy, through state-owned enterprises and leverage over private sector businesses, is powerful.
Even though China has undergone market reforms, policymakers have constantly intervened, and
the government still controls the domestic market. Without the legislature to overlook the
government's policy, it is easier for the Chinese government to enforce sanctions, and its mass market
means China has leverage against foreign counterparts with smaller markets.
Nevertheless, anti-foreign boycott, like other strategies, has pros and cons. Boycotts have
several advantages as an economic statecraft. Just like nationalist protest, the Chinese government
manages to "switch" them on or off with state media.
13
Unlike nationalist protest, boycotts have a low
risk of disrupting political stability in an authoritarian regime like China while creating relatively more
considerable harm to its adversaries, which could coerce them to change their unfriendly policies.
This dissertation showcases three examples of how China used boycotts as an economic statecraft in
international relations, including two cases when China unleashed boycotts against its two neighbors—
Japan in 2012 and Korean in 2017. This research also exhibits one case when China quieted boycott
activities against American and Filipino products in 2016.
Furthermore, popular boycotts are an ideal economic statecraft that could avoid the
complaints filed by other member states in the World Trade Organization (WTO). China's
domestic economic policies regularly draw WTO challenges. For example, Japan, the European

12
Enda Curran and Kana Nishizawa, “China’s Market Meddling,” Bloomberg, last modified: December 18, 2018,
https://www.bloomberg.com/quicktake/chinas-managed-markets; McNally Christopher, “Sino-capitalism: China’s
Reemergence and the International Political Economy,” World Politics, 64 (4), (2012). 741–751
13
Jessica Chen Weiss, Powerful Patriots: Nationalist Protest in China’s Foreign Relations, (Oxford: Oxford University
Press: 2014), 34.
13
Union, and the United States brought a successful WTO case against China's restrictions on rare
earth exports. Import restrictions generally include some legal or regulatory measure, such as
targeted food safety inspections, where popular boycotts include public calls for consumers to refrain
from purchasing a targeted good, bypassing legal or regulatory measures. The informal measures,
such as the use of state media to encourage popular boycotts, a temporary application of customs
inspections and other measures, however, are much more difficult to challenge under current WTO
rules. To prove boycott as a coercive campaign is a challenging task, and the Chinese government
could easily shrug off the accusations. Consequently, boycotts reduce China's risk of being the
complainant in WTO or other trade remedy challenges to its actions.
However, boycotts have several disadvantages: first, its economic repercussions affect not
only local consumers but also local manufacturers producing foreign products. Popular boycotts do
carry risks for China of adverse collateral consequences, mainly if Chinese citizens reduce purchases
of foreign-branded goods that are actually manufactured in China. Sanctions impose costs on both
the target and sender relative to the status quo by disrupting economic exchange,
14
and boycott, as a
halt of economic exchange, is not an exception.
15
Moreover, relative to import restriction, boycotts
are an economic statecraft lacking in precision: sometimes governments cannot decide whom will
be the target of economic boycotts. Therefore, it is not surprising that the Chinese government rarely
encouraged boycotts.

14
Daniel W. Drezner, “The Hidden Hand of Economic Coercion,” International Organization 57, Summer, (2003):
643-659.
15
Additional cost—the deadweight loss—would be created as people cut back their wine consumption.

14
1.1 Puzzle
Chinese citizens are accustomed to boycotts dating back to the early 20th century. The Chinese
government or its citizens have been willing to boycott foreign goods in order to inflict economic
pain on its adversaries. In the past decade, China has expanded its set of such economic instruments
to include sticks, not just carrots. Other than charming investment projects like One Belt One Road,
China also has punished countries that undermine its territorial claims and foreign policy goals with
new measures such as encouraging popular boycotts. During the Chinese disputes with Japan and
South Korea, the private sectors from Chinese neighbors have been major victims. Moreover, as the
trade conflict between the United States and China escalated in 2018, the survey from Financial
Times has found a majority of Chinese consumers were prepared to boycott US goods in the event
of a trade war with Washington. The survey found that 54 percent of 2,000 respondents in 300 cities
across China would "probably" or "definitely" stop buying US-branded goods "in the event of a trade
war". Just 13 percent said they would not, signaling the high stakes.
For the scholars of East Asia Politics, this sounds familiar. Japan had been the frequent target
of Chinese boycotts for the past two decades. Dating back to 1923, anti-Japanese boycotts occurred
due to territorial disputes. Chinese demanded Japan to return two concessions: Lushun( 旅順) and
Dalian ( 大連).
16
Japan refused, and the Shanghai Chamber of Commerce initiated boycotts. Major
cities followed. Japan’s export to China, which represented 27percent of its total export during that
time, dropped by 31percent. Japanese factories thus stopped manufacturing. Moreover, Chinese

16
After First Sino-Japanese War in 1895, Russia, France, and Germany forced Japan to return the Liaodong Peninsula
to China, and instead, the Russian Empire coerced a lease of the peninsula for 25 years till 1923 from the Qing
Dynasty in 1898. Since the Russo-Japanese War in 1904, the Japanese empire took over two cities. Japanese empire
refused to return two cities back to China, arguing Japan had an agreement with the new Chinese government, the
Republic of China in 1915.
15
consumers refused to support Japanese service. For instance, the revenues for Japanese ferry
business plummeted by 60percent. Japanese shipping business in Shanghai also experienced a huge
blow, as Chinese stopped shipping their products by cargos from Japanese companies. This event
epitomizes the long history of Chinese boycotts.
China’s use of coercive economic measures is not new. It has been implementing such
boycotts against its foes for more than 100 years, and it knows how to make them hurt economically
and politically. One of the first modern boycott attempts was directed against the United States. In
May 1905, the Shanghai Chamber of Commerce, a government-registered local business
organization, called for a boycott of American goods after reports of mistreatment of Chinese
immigrants and U.S. laws restricting Chinese labor. Though the boycotts spread rapidly, Chinese
government withdrew its initial support under pressure from the United States. And thus the
movement quickly faded.
Japanese goods also had been the major targets in a long history of boycotts in modern China.
In 1908, the first Japanese boycotts occurred.
17
The “Tatsu Maru," a Japanese steamer bound for
Macao, a Portuguese colony on the China coast, was seized by Chinese officials for attempting to
smuggle a number of arms and ammunition into the hands of Chinese revolutionists by way of this
bit of foreign territory. The Japanese government claimed that the ship had been overhauled in
Portuguese waters—not in Chinese. Because of this technicality, Peking (now known as Beijing) was
forced to apologize, to pay an indemnity, and to punish the Chinese customs officials who captured
the vessel. The second anti-Japanese boycotts occurred in September and October of 1909 as a

17
Dorothy J Orchard, “China’s Use of the Boycotts as a Political Weapon,” The Annals of the American Academy of
Political and Social Science (1930): 252–261.
16
protest against Japan’s insistence upon China’s agreement to the extension of her railways in

Table 1.1 China’s History of Popular Boycotts
Source: Remer 1933, Financial Times, and others
19

18
Dawei Cao and Sun Yanjing, China’s History, (Singapore: Cengage Learning Asia: 2010).
19
See citation Ben Bland et al, 2017.
Year Country Events
1905 United States Worldwide boycotts of US products by Chinese merchants in
opposition to discriminatory laws in the US. The action was taken by
Chinese communities from Shanghai to Singapore and San Francisco.
1908 Japan Japanese steamer “Tatsu-Maru" bound for Macao, a Portuguese colony
on China coast, was seized by Chinese officials for attempting to
smuggle a number of arms and ammunition into the hands of Chinese
revolutionists by way of this bit of foreign territory.
1909 Japan Japan’s insistence upon China’s agreement to the extension of her
railways in Manchuria.
1915 Japan Japan made Twenty-one Demands upon China
1919-21 Great Britain,
Japan
The May 4 Movement (Chinese: 五四运动, Wusi Yundong) occurred,
and there were boycotts against Great Britain and the Japanese Empire
in parallel. It was an anti-imperialist, cultural, and political movement
growing out of student participants in Beijing on May 4, 1919,
protesting against the Chinese government's weak response to the
Treaty of Versailles, especially allowing Japan to receive territories in
Shandong, which had been surrendered by Germany after the Siege of
Tsingtao.
1923 Japan Chinese boycotts Japanese products because Japan refused to return
concession in China.
18

1925-26 Great Britain Strikes and boycotts in Hong Kong cripple British trade as part of the
anti-imperialist May 30 Movement after colonial police in Shanghai
open fire on protesters.
1931-32 Japan The Kuomintang government leads boycotts of Japanese goods, as
tension rises ahead of Japan’s invasion of Manchuria in 1931.
1946 United States Huge rallies and anti-US boycotts are staged after the alleged rape of a
Peking University student by two US marines. The communists use the
incident to rally opposition to the US-backed Kuomintang, which it
defeats in 1949.
17

Manchuria. Peking's capitulation to Japan's demands was bitterly opposed all over China. But
because the impetus of the movement was spent in boycotting and destroying goods on hand, the
1909 boycotts did not cause Japan any serious loss. It did, however, bring the world’s attention to
China's opposition to Japan's aggression in Manchuria.
The next boycotts occurred 6 years later in 1915, and Japan again became the major aim of
Chinese boycotts. Japan made Twenty-one Demands upon China, under cover of the European
War and with the backing of a large army and navy. And the Chinese declared boycotts against all
Japanese products immediately, which was effective for six months from January to June.
Throughout the war years, the Chinese were forced to buy in large quantities from Japan, but the
humiliation and resentment of the Twenty-one Demands continued to rankle the Chinese. And in
1919, when the other nations at the peace conference accepted Japan’s claim on Shantung by virtue
of the Twenty-one Demands and incorporated it into the terms of the Treaty of Versailles, the
Chinese people were again roused to an economic war against Japan. The 1919 boycotts began in
May, before the peace treaty was signed, and had the immediate objective of preventing the Chinese
delegates from signing the treaty, as well as the ultimate aim of securing the return of Shantung from
Japan.
20

20
The first evidence of the movement was the almost general refusal to accept the bank notes issued by Japanese banks
in China and the withdrawal of Chinese funds from those banks. Then the boycotts spread to all Japanese products. It
was taken up by the student and then merchant guilds, chambers of commerce, artisan, craftsmen and labor unions.
Then in 1923, Chinese boycotts Japanese products because Japan refused to return concession in China. See Remer,
Charles Frederick. 1933. A Study of Chinese Boycotts. Baltimore, Johns Hopkins Press.
18
In the 1930s, a patriotic movement was led by Chinese boycotts in protest of Japan’s
invasion.
21
Popular boycotts continued, though targeting Japanese goods, until the early days of the
Mao Zedong era. Then the country turned inward and isolated itself economically, and China’s use

21
James Reilly, “A Wave to Worry About? Public opinion, foreign policy and China’s anti Japan protests,” Journal of
Contemporary China, 23 (2013).
19

Figure 1.1 International Disputes China Involved and Boycotts Event in Past 20 Years
Notes: star sign means there are calling for boycotts from the Chinese public. Red note means
evidence that boycotts did occur exist.
of economic coercion, like China’s broader international economic policies, faded.
22
Sporadic calls
for boycotts of Japanese goods reemerged in the 1985 protests.
23

As a result of economic globalization, international relations play an increasingly important
role in influencing consumer behavior and the market performance of foreign brand-name products.
For instance, when Sino-Japanese relations went through major setbacks after the Japanese
government decided to formally incorporate two disputed islands as Japanese territory, Chinese
citizens called for the boycott of Japanese products in a new wave of anti-Japanese sentiment.
However, the boycotts did not occur all the time. For example, boycotts did not happen during Sino-
Japanese conflicts in 2005. Furthermore, even though Chinese citizens were calling for an anti-
Japanese boycott in 2010, there was no sign that sales of Japanese products dropped in China.

22
ibid
23
ibid
20
Moreover, on July 12, 2016, the Permanent Court of Arbitration in The Hague ruled in favor of the
Philippines. The Hague argued there was no legal basis for China's claim to a large part of the South
China Sea, and what followed was a sweeping nationalist sentiment in China, with protests targeting
KFC, Apple and Filipino fruit. Yet these boycotts quickly faded away, and the mobilization of
collective actions halted. Then, why did boycotts happen in certain occasions? How can we explain
when anti-foreign boycotts occur, or why boycotts occur in certain cases but not others in China?
Unlike in the early 20
th
century, the targeted countries of boycotts shifted from countries
relatively much more powerful than China (like the U.S, United Kingdom, and Japan), to neighbors
having relative similar national strength like modern-day Japan and Korea. Popular boycotts were a
resistance tactic that was popular in late 18
th
and 19
th
century and have frequently been resorted to by
groups within countries who feel themselves to be in a position of weakness or who do not have
access to the political machinery of the state. Besides Chinese, others had attempted to use boycotts
on an international scale. For instance, the people of certain American colonies of Great Britain
entered in agreements not to buy British goods in 1765 and in 1769. The Turks undertook a boycott
against Austria in 1908 and, upon other occasions, against the Greeks and Italians. Indian boycotts
against the British go back to 1905, and the boycotts of 1930 were unusually widespread. The
laborers of a number of European countries inaugurated a boycott of Spain in 1909 and of Hungary
in 1920.
24
However, targets of boycotts in China for the past 20 years were Korea, Japan and Korea,
which have similar national power to China, so how could we explain the difference?

24
Charles Frederick Remer, A Study of Chinese Boycotts. (Baltimore: Johns Hopkins Press, 1933).
21
1.2 Main Argument
In this dissertation, I argue that the Chinese government manages popular boycotts as an economic
statecraft. Indeed, the difference between boycotts and sanctions is huge. Boycotts are voluntarily
undertaken by people who organize others who also voluntarily comply. Sanctions are imposed by
governments, and they take away people’s choice.
25
However, in some cases, the government could
leverage boycotts to signal discontent to its foreign counterparts. As long as the state could firmly
control state media, it could allow or discourage people to boycott, and just like economic sanctions,
boycotts can function as a costly signal of a state's commitment to have a dispute resolved in its favor.
In addition, boycotts reveal anti-foreign sentiment by sacrificing economic welfare at the
individual level. To impose economic sanctions from the state level is to impose consequences on
the state itself, and that will restrict its future range of choices. Popular boycotts against foes’
consumer goods coincided with the Chinese government’s deployment of China’s economic
statecraft. With their large market, China targets the foreign industries, enforcing economic coercion
in a surgical way, while causing minimal loss to their domestic market. Moreover, just like protest,
popular boycotts are ways to demonstrate its nationalist sentiment ex-ante, which is similar to Jessica
Chen Weiss's
26
argument with nationalist protest.
One might argue that boycotts happened in parallel with nationalist protest, and that an
authoritarian regime might view boycotts and protests with no distinction. However, it is not the
case. Calling for boycotts did not occur in parallel with nationalist protest, at least in China (See

25
David Henderso, “Sanctions and Boycotts in an Interconnected World,” EconLog, last modified May 10, 2013,
https://www.econlib.org/archives/2013/05/sanctions_and_b.html
26
Jessica Chen Weiss, Powerful Patriots: Nationalist Protest in China’s Foreign Relations, (Oxford: Oxford University
Press: 2014).
22
Table 1.2). For example, when Chinese petitioned to boycott French supermarket Carrefour in
December 2008, there was no sign of protests. Moreover, even though boycotts are indeed one
kind of collective action like a protest, unlike nationalist protest, boycotts don't post a threat to
authoritarian stability.
27
Nationalist protests are risky to authoritarian stability. Anti-foreign protests
may trigger an international incident if mobs overrun diplomatic compounds and injure or even kill
foreign nationals, jeopardizing diplomatic relations. In contrast, boycotts don’t have the potential to
shake the foundation of state legitimacy, and the public does not need to go on the street
physically to boycott. Therefore, the boycott does little harm to the social stability of the
authoritarian regime. The research tracks how China reacts when political tension occurs between
China and its counterpart. This dissertation is an empirical attempt to examine how an authoritarian
state manages its economic statecraft via popular movement on its foreign counterparts. Not all

Table 1.2 Boycotts and Protests Occurred in International Conflicts

27
Further explanation in Chapter 2.
Date 1999 2005 2008 Apr 2008 Dec 2010 2012 2016 April 2016 Jul
2017
March
Targeted
Country
U.S. Japan France France Japan Japan
U.S.
Philippines
S. Korea S. Korea
Protest Yes Yes Yes* No No Yes Yes* No Yes*
Calling
for
Boycott
No Yes* Yes* Yes Yes* Yes Yes* Yes Yes
23
states are created equal in terms of their capacity to project economic power. A large economy
relative to its counterparts might have more leverage due to its centrality to the global financial
system. Furthermore, it also depends on underlying state capabilities to control commodity and
capital flows, media, and its domestic market feature. China is one of few countries with both an
authoritarian state and a relatively large economy relative to most nations in the world, and this is an
interesting case to study.
This dissertation focuses on boycotts in China. I illustrate this theory based on an empirical
study of contemporary China, which offers two advantages in testing such a theory. First, China is
one of the most durable authoritarian regimes in the world, and the Chinese government still fully
controls state media, which gives them an advantage in managing public opinion relative to
democratic countries such as the U.S or other European countries. As the highly influential “four
theories of the press” claimed, authoritarian states would use the media to stabilize the regime.
28

Even though China’s media environment has become more commercialized, diverse and
internationalized in terms of both the kind of media sources available to audiences and news content,
the Chinese government can still affect their people’s sentiment via state media, which is also often
quoted by non-state media.
Second, with its $11 trillion economies, China is integrated with dozens of other economies,
both big and small. It is the world's number-one trader, manufacturer, and oil consumer. For some
countries, China is among their biggest buyers of debt and/or providers of project finance and other
forms of capital. Beijing seems certain to continue using economic leverage for political and strategic
ends. China is one of the rising major new economic powers, which create a challenge to the

28
Siebert, Fred. Four theories of the press. Freeport, NY: Books for Libraries Press, 1956.

24
international system, and its economic statecraft has become a hot topic in international relations.
Unlike the old Soviet Union, China is part of the world economy. China is relatively more integrated
into the global economy than other authoritarian states. Given that China is so integrated into
economic, political and cultural life, smaller countries are vulnerable to such pressure. Thus, it is
interesting to observe how China enforce its economic coercion and how its foreign counterparts
react to China’s assertive foreign policy.
1.3 Organization of the Dissertation
This dissertation uses a case study research design to explore the causal mechanisms
proposed by main arguments. This dissertation uses a nested case design that compares two or more
episodes taken from a similar strategic context of Chinese economic statecraft, and it also uses text
analysis to track the state media’s sentiment against its counterpart and how the buying behavior of
Chinese customers reacts to “treatment” from state media. In some of these episodes, the state was
willing to let go or inflame nationalism via state media, indirectly leading to nationalist boycotts, while
in other comparable instances the state media blatantly discouraged Chinese citizen to stop boycotts.
The dissertation includes an introductory chapter, a theoretical chapter, three empirical chapters,
and one concluding the chapter. The chapters are organized in the following way: This chapter is an
introduction, proposing a puzzle about boycotts in China. Chapter II exhibits the theory of this
study, answering how China, as an authoritarian regime, manages to manipulate state media as to
create a hostile environment against foreign products, using boycotts as economic statecraft.
From Chapter III to Chapter V, I use three cases to demonstrate my argument. The first
case, demonstrated in Chapter III, is how the Chinese government allowed popular boycotts in 2012
due to the Japanese acquisition of the Senkaku/Diaoyu islands. In 2010 and 2012, Japanese car
25
sales were gravely affected by Sino-Japanese political conflict. The island dispute set off violent
protests in China, and a widespread call to boycotts Japanese goods. While the two nations dispute
over the Senkaku/Diaoyu islands, Japanese products, such as cars from Toyota and Honda and
electronic products from Canon or Sony, suffered sales losses that persisted weeks after the conflict
was resolved. The Chinese government did not signal its citizens to stop the boycott, allowing it to
last for a few months. Toyota and Honda dealerships were burned down in one city, and crowds
shouting anti-Japanese slogans gathered and vandalized Japanese cars.
Chapter IV shows the second case, where China stopped boycotts after an arbitration tribunal
in Hague rejected China’s claims to historic rights in the South China Sea in 2016. A lot of angry
Netizens shouted out to boycotts the US fast-food chain KFC as to protest international tribunal’s
ruling. Yet the government spread the word about not supporting boycotting on state media and
stopped the boycotts. In this chapter, I intend to demonstrate that the Chinese government could
extinguish the flame of boycotts if boycotts did not benefit the Chinese foreign-policy goal.
Lastly, I showcase how the Chinese government encouraged boycotts against Korean
products after Korea's decision to deploy the anti-missile system, known as Terminal High Altitude
Area Defense (THAAD). Viewing THAAD as a threat to China’s strategic deterrent, China turned
up the heat: its state and social media encouraged unofficial boycotts of Korean products. Hyundai's
sales in China, Korean biggest overseas market, have plummeted since March 2017. In the second
quarter, the automaker's China sales plunged 64percent compared with a year earlier. In addition,
the number of Chinese tourists visiting South Korea has plummeted. Dozens of Lotte’s retail stores
inside China were closed down by officials. And a project to build a theme park in the country has
stalled. The company said sales at its supermarket business in China nosedived 95percent in the
26
second quarter of 2017.
29
The boycotts hit hard against Chinese business.
The last chapter would wrap up with a conclusion. This dissertation displays how an
authoritarian state like China could use state media to 'tune' the anti-foreign boycotts on and off,
exhibiting that some Chinese citizens followed government’s guidance to boycott, either due to
nationalism, patriotism or commercial interest. In sum, this research demonstrates how state media
turned the boycotts into economic statecraft, coercing against Chinese foreign counterparts and
catering to the country's foreign-policy goals.

29
Jethro Mullen, “China can squeeze its neighbors when it wants Ask South Korea,” CNNMoney, last modified:
August 30, 2017 https://money.cnn.com/2017/08/30/news/economy/china-hyundai-south-korea-thaad/index.html
27
Chapter II Theory
Introduction
This chapter spells out a theory that explains the occurrence of the anti-foreign boycotts in
authoritarian regimes and its application in the context of Chinese foreign policy. Why did the anti-
foreign boycotts occur in China during some international conflicts but not others? This dissertation
argues that the authoritarian state manages popular boycotts as an economic statecraft to coerce
Chinese enemy states into acting in China’s favor and to bolster China’s foreign policy goals.
Consumer boycotts also demonstrate public opinion without risk of destabilizing the state while
causing economic loss for foreign direct investments when there are political conflicts.
The consumer boycotts I am studying are not motivated by economic rationales, such as inferior
product quality, but rather by political events and thus allow us to learn about how shocks to
international relations affect trade. In contrast to the more frequent boycotts against specific firms,
such as the boycotts against Shell in 1995, the consumer boycotts I focus on are directed against
entire countries. Consumer boycotts become an option when other means of coercion, such as war
or the severing of diplomatic relationships, appear to be infeasible.
30
To my knowledge, political
scientists paid little attention to boycotts. To help rectify this gap, this dissertation explores the role
of popular boycotts in international relations.
This chapter reviews the literature related to the main arguments of this dissertation, including
literature on economic coercion, signaling, and boycotts. This chapter also outlines the dissertation’s

30
For the reason of style, I will use the terms consumer boycotts, popular boycotts, and anti-foreign boycotts inter-
changeably.
28
theoretical arguments and research design.
2.1 Literature Review
2.1.1 Conceptualization of Boycotts
Friedman defines a consumer boycott as "an attempt by one or more parties to achieve certain
objectives by urging individual consumers to refrain from making selected purchases in the
marketplace."
31
The term boycott was coined in 1880, originating from a land dispute between
English land agent Charles Boycotts and Irish tenants. Boycotts are not spontaneous events. They
are collective actions that are organized by activists, rather than individual consumption decisions.
32

The purpose of boycotts is to impose some economic loss on the target or to demonstrate a moral
outrage, to try to force the target to correct an objectionable behavior. If consumers join the boycott,
they collectively refrain from buying a certain company's product or a specific brand in order to
punish it for what they deem to be unacceptable behaviors.
33
Moreover, boycotts are an extreme
case of a broader category of consumer behavior in which social and ethical issues, such as
nationalism or environmentalism, influence purchase decisions.
This research investigates the boycotts managed by the Chinese governments and the one
spreading to national levels.
34
Moreover, this study would only focus on the boycotts that were

31
Monroe Friedman, “Consumer Boycotts in the United States, 1970-1980: Contemporary Events in Historical
Perspective,” Journal of Consumer Affairs,19 (1) (1985): 96-117.
32
Monroe Friedman, “A positive approach to organized consumer action: the “buycott” as an alternative to the
boycott,” Journal of Consumer Policy 19, (1996): 439–451.
33
Stefan Hoffmann and Stefan Müller, “Consumer boycotts due to factory relocation.” Journal of Business Research.
62 (2), (2009): 239–247.
Gabrielle Klein, N. Craig Smith and Andrew John, “Why we boycott: consumer motivations for boycott participation.”
Journal of Marketing. 68 (3), (2004): 92–109; Sankar Sen, Zeynep Gürhan-Canli and Vicki Morwitz, “Withholding
consumption: a social dilemma perspective on consumer boycotts.” Journal of Business Research. 28 (3), (2001): 399–
417.
34
In this dissertation, the boycotts could be initiated by Chinese citizens, or triggered by the Chinese government.
29
triggered by nationalism and patriotism, which occurred when international conflicts occur. Various
studies have shown that patriotism and nationalism directly influence consumers’ willingness to buy
a foreign brand.
35
In many cases, the effect of nationalism has an impact on both animosity and
consumer ethnocentrism (thinking domestic products are better than foreign ones).
36
These studies
try to understand how individual-level nationalism translates into economic behavior.
Anti-foreign boycotts are a kind of anti-foreign protests, yet it is obviously different than a
typical street protest. According to literature in political science, street protests bring social instability
to the political regime for three major reasons—demonstration effects, resource mobilization, and
elite splits. Demonstration effects refer to signal of acceptance from the state that protest created to
the people, and thus causing more protests.
37
On the other hand, the protest also reduces the costs
of mobilization for protest, since the networks of protest are activated already.
38
Finally, elite splits
might appear, since protests might expose the fissures between hardliners and moderates in the
elites,
39
and therefore protests would lower the costs of political mobilization for any social status.
In appearance, anti-foreign boycotts could hardly be categorized as economic coercion.

35
Min C Han, “The effects of cue familiarity on cue utilization: the case of country of origin”, paper presented to the
Conference of the Academy of International Business, San Diego, CA (1988).
36
George Balabanis, Adamantios Diamantopoulos, Rene Dentiste Mueller, and T.C. Melewar, “The Impact of
Nationalism, Patriotism and Internationalism on Consumer Ethnocentric Tendencies,” Journal of International
Business Studies, 32 (1), (2001): 157–75.
37
Thomas C Schelling, The Strategy of Conflict, (Cambridge, Mass, Harvard University: 1960), 65.
Timur Kuran, “Now Out of Never: The Element of Surprise in the East European Revolution of 1989,” World
Politics, 44 ~1 (1991):7–48.
Susanne Lohmann, “A Signaling Model of Informative and Manipulative Political Action,” American Political Science
Review, 87~2:3 (1993): 19–33.
Susanne Lohmann, “The Dynamics of Informational Cascades: The Monday Demonstrations in Leipzig,
East Germany, 1989–91,” World Politics 47 ~100, (1994): 42–101+
38
Sidney G Tarrow, Power in Movement: Social Movements and Contentious Politics, 2d ed. (New York: Cambridge
University Press: 1998)
39
O’Donnell, Guillermo A, and Philippe C. Schmitter, Transitions from Authoritarian Rule: Tentative Conclusions
About Uncertain Democracies, (Baltimore: Johns Hopkins University Press: 1986)
30
Governments impose sanctions, and they take away people’s choice.
40
In contrast, boycotts in China
have their grass-roots support, initiated by the public. However, as discussed in the previous section,
boycotts are a product of nationalism and patriotism, and those citizens who participate in these
boycotts are obedient and loyal to the state. In some cases, the state could use boycotts as leverage
to demonstrate their discontent to their foreign enemies. As long as the state could firmly control
state media, the authoritarian government could encourage or discourage the collective actions
despite the lack of a concrete mechanism to control boycotting.
Authoritarian regimes with tight control of mass media and the internet could easily
manipulate people's anti-foreign sentiment by managing the dissemination of information. That is
to say, when international conflicts occur, anti-foreign boycotts could work as a foreign policy
extension for an authoritarian regime. In this case, the state's operation could be a critical
determinant of boycotts. The authoritarian government could signal to their people that the
government does not want boycotts, which could discourage collective actions via media. Conversely,
the government could allow for boycotts as a way to demonstrate public opinion to their foreign
counterparts.
41

2.1.2 Boycotts as an Economic Statecraft for China
After the Cold War, Edward Luttwak introduced the term geo-economics defined as “an
admixture of the logic of conflict with the methods of commerce.’
42
Geoeconomics was used to
describe how in the post-Cold War international system, the main arena for rivalry amongst states

40
See Henderso, 2013.
41
Other than China, the Russian government also advised citizens to boycott Estonian products and avoid all travel to
Estonia, once Estonia relocated buried remains of WWII Russian soldiers in 1999, see Hillebrand and Bervoets
(2013).
42
Edward N Luttwak, “From Geopolitics to Geo-economics: Logic of Conflict, Grammar of Commerce,” The
National Interest 20 (1990): 17-23.
31
would be economic rather than military. In the 2000s, geoeconomics became an important
component of power politics, and with the rise of emerging powers such as China, scholars like
Mikael Mattlin and Mikael Wigell began to revisit the concept of geoeconomics, studying the context
of the economic policies pursued by major regional powers (e.g. China, Russia, and Germany).
43

Given significant economic interdependence between the states, economic statecraft has become the
foreign policy instrument of choice for great powers in the 21st century.
Scholarly research into economic statecraft traces back to two foundational works that
theorized the sources of power arising from economic interdependence
44
and specified the
instruments of economic statecraft that governments might rely upon in a given influence attempt.
45

Baldwin
46
defined economic statecraft as ‘governmental influence attempts relying primarily on
resources that have a reasonable semblance of a market price in terms of money.’ More recently,
Norris defined economic statecraft more specifically as ‘intentional attempt of the state to incentivize
commercial actors to act in a manner that generates security externalities that are conducive to the
state’s strategic interests.’
47

According to Baldwin,
48
there are two different approaches of economic statecraft: positive
(providing incentives) or negative (applying coercive pressure). Positive economic inducements
involve “the provision or promise of economic benefits to induce changes in the behavior of a target

43
Mikael Mattlin and Mikael Wigell. “Geoeconomics in the Context of Restive Regional Powers.” Asia Europe
Journal, June 14.2 (2016): 125-134.
44
Robert Keohane and Joseph S. Nye, Jr. Power and Interdependence, London: Pearson Higher Ed: 1987.
45
David Baldwin, Economic Statecraft (Princeton, NJ: Princeton University Press, 1985)
46
Ibid.
47
Norris, William J. Chinese Economic Statecraft: Commercial Actors, Grand Strategy, and State Control. (Ithaca:
Cornell University Press: 2016)
48
David Baldwin, Economic Statecraft. (Princeton, N.J.: Princeton University Press: 1971), 53.
32
state.”
49
This can entail increased bilateral trade or investment, or greater flows of foreign aid to the
target.
50
In contrast, negative economic sanctions involve the sender state’s withdrawal of economic
benefits from the target by restricting imports from that country, reducing exports to that country, or
reducing foreign direct investment into that country. Inflicting economic pain pressures the target to
change their foreign policy and political behavior, to suit the sender’s preferences.
Hirschman discusses how asymmetrical trade relations endow one country with more
coercive power over the other because the latter will be more vulnerable to and more hurt by an
interruption of trade.
51
This method of economic coercion could “become an alternative to war”
and “an effective weapon in the struggle for power” between sovereign states.
52
Building on this idea,
political science and International Relations scholarship has largely focused on punitive sanctions as
the dominant approach to economic statecraft.
53

Furthermore, tools of economic statecraft can be classified into three main categories: trade,
investment, and aid. The studies of economic statecraft have long focused on bilateral competition
over trade and protection of foreign investment interests. Above all, scholars highlighted economic
sanction as the main instrument of economic statecraft.
54
Most studies of China’s economic statecraft
have similarly focused on the potential coercive effects of trade dependence on China, such as

49
Michael Mastanduno, “Economic statecraft, Interdependence, and national security: Agendas for research,” Security
Studies, 9:1-2, (1999): 288-316
50
Leslie Elliott Armijo and Saori N. Katada, “Theorizing the Financial Statecraft of Emerging Powers,” New Political
Economy, 20:1, (2015): 42-62
51
Albert O. Hirschman, National Power and the Structure of Foreign Trade. Vol. 105 (Berkeley, Los Angeles,
London: University of California Press: 1945), 15-17
52
ibid
53
See David Baldwin, Economic Statecraft. Princeton, (N.J.: Princeton University Press: 1971); Robert A. Pape, "Why
Economic Sanction Work." International Security 22(2) (1997):22-45;
Daniel W. Drezner, The Sanctions Paradox. (Cambridge: Cambridge University Press: 1999)
54
Daniel W. Drezner, The Sanctions Paradox, (Cambridge: Cambridge University Press: 1999).
Gary Clyde Hufbauer, Jeffrey J. Schott, Kimberly Ann Elliott and Barbara Oegg, Economic Sanctions, Reconsidered,
3rd ed. (Washington, DC: Petersons Institute for International Economics: 2009).
33
import or export restrictions.
55

Boycotts are not recognized or categorized in any of the three main types of economic
statecraft. Anti-foreign boycotts are not fully studied in political science literature. As described in
the previous section, boycotts could work as an economic statecraft. Boycotts could be managed by
the government as a foreign policy instrument instead of merely a bottom-up political activism,
political consumerism,
56
or "voting with your dollar."
Boycotts have at least three attractions as an economic statecraft for China. First, anti-foreign
boycotts allow the Chinese government to demonstrate their nationalist credentials to both foreigners
and domestic audience, revealing the anti-foreign sentiment from the public in China without
destabilizing their own society. The costs of defying popular sentiment and the risks to stability create
a dilemma for the government between tolerance and repression.
57
Beijing must play a delicate
balancing act to ensure that its embargoes neither damage the Chinese economy nor unleash forces
of jingoism and protest that could threaten one-party rule.
Both street protest and boycotts show anti-foreign sentiment. However, street protests breed
instability to political order, but anti-foreign boycotts don't increase the risk to political stability and

55
Andreas Fuchs and Nils-Hendrik Klann, “Paying a Visit. The Dalai Lama Effect on International Trade,” Journal of
International Economics 91 (1), (2013): 164-177; Christina Davis and Sophie Meunier, “Business as Usual? Economic
Responses to Political Tensions.” American Journal of Political Science 55(3) (2011): 628–646.
56
Jorgen Goul Anderson and Mette Tobias, "Who Are These Political Consumers Anyway? Survey Evidence from
Denmark." in Politics, Products and Markets: Political Consumerism Past and Present, ed. by Michele Micheletti,
Andreas F2llesdal, Dietlind Stolle. (New Brunswick, New Jersey: Transaction Publishers, 2004), 203-221.
57
Peter Hays Gries, China’s New Nationalism: Pride, Politics, and Diplomacy, (Berkeley: University of California
Press, 2004); Alastair Iain Johnston and Daniela Stockmann, “Chinese Attitudes Toward the United States and
Americans,” in Anti-Americanisms in World Politics, ed. by Peter J. Katzenstein and Robert O. Keohane,
(Ithaca, N.Y.: Cornell University Press, 2007), 157–195.
Susan L. Shirk, The Political Logic of Economic Reform in China, (Berkeley: University of California Press, 1993)
and Susan L. Shirk, China: Fragile Superpower, (Oxford, UK: Oxford University Press, 2007)

34
are not costly to be repressed. Thus, from the perspective of regime stability, boycotts are preferable
for authoritarian states. Even though boycotts could lower the costs of mobilization, they do little
harm to political stability. People don't have to go on the street to boycott, and all they have to do is
choose not to purchase products from a certain nation. Moreover, with the internet, mobilization
for boycotts become relatively easy. Even though customers could have problems identifying the
home country of foreign products, online activists could easily provide information for deciphering
product origin. All in all, the mobilization process creates little risks to political order.
Second, boycotts create economic damage to foreign investment in China. China's role in
the global economy as a manufacturer and end-market is now far more significant. Controlling access
to China's vast market gives Chinese leaders and the ruling Communist party tremendous leverage
over trading partners. Thus, the boycotts could cause great loss for foreign direct investment once
their home countries' relations with China deteriorate. Japanese carmakers and Taiwanese tourism
workers have all previously been on the wrong end of hostile campaigns instigated to varying degrees
by Beijing and the Communist party-controlled media.
Lastly, it is difficult for global institutions like the World Trade Organization (WTO) to
challenge the validity of boycotts. The WTO challenges are unlikely to ease the pain to countries
targeted by Chinese coercive economic measures.
58
One key advantage for the state to adopt boycotts
is that this technique specifically insulates from WTO challenges. For example, although South
Korea threatened to bring a WTO challenge against China in 2017 according to both public press
reports and private interviews, eventually Korea chose not to do so after serious deliberation. This
arrangement was partially the consequence of the South Korean government's focus on de-escalating

58
Peter Harrell, Elizabeth Rosenberg and Edoardo Saravalle, “China’s Use of Coercive Economic Measures,” Center
for a New American Security, (2018).
35
tensions with Beijing, and it is also the results of fears that a WTO challenge might worsen diplomatic
relations instead of solving the problem. Moreover, the decision was also based on the South Korean
government's calculation. Seoul was aware how challenging it would be to win a WTO case given
the absence of sufficient, formal Chinese directives, or legal guidelines associated with the measures.
59

For these reasons, boycotts, if they could be managed, would be the ideal economic statecraft for a
state.
It is worth noting that popular boycotts do bring collateral damage. First, popular boycotts
do carry some risk for China of adverse collateral consequences. Quite often, the boycotted foreign-
branded products are manufactured in China. Popular boycotts may inadvertently target foreign-
branded products produced inside China, as well as imported goods. For example, when China
retaliated against Korea for THAAD deployment, they manipulated Chinese citizens to boycott
Korean cars were made in China. This means the boycotts adversely impacted Chinese workers at
the Korean-owned automotive plants.

60

However, sanctioners are conscious of the costs to
themselves.
61

Moreover, when compared to import restriction, boycotts are an economic statecraft lacking
in precision: sometimes government cannot be sure which foreign brands will be the target of
economic boycotts. Even if a survey indicates that most participants are willing to boycott foreign
products, there might be a gap between the survey's findings and market statistics. Devinney Timothy

59
Ha Nam-Hyun and Lee Ho-Jeong, “On THAAD, Korea loses a powerful card,” Korea Joong Ang Daily, last
modified: September 19, 2017, http://koreajoongangdaily.joins.com/news/article/article.aspx?aid=3038585.
60
Adriana Diaz and Shuai Zhang “Angered by U.S. anti-missile system, China takes economic revenge,” CBS News,
last modified: April 7, 2017, https://www.cbsnews.com/news/china-retaliates-south-korea-us-thaad-missile-defense-lotte-
and-k-pop/
61
Morgan, T. Clifton, and Valerie Schwebach, “Fools Suffer Gladly: The Use of Economic Sanctions in International
Crises,” International Studies Quarterly 41: 2 (1997).
Richard D. Farmer, “Costs of Economic Sanctions to the Sender.” The World Economy 23(1): 93–117, (2000).
36
et al.
62
found there is a difference between how consumers say they act and what they ultimately do.
Moreover, sometimes individuals could not identify foreign products. Some consumer products
brand names are visible, but foreign products of unknown origin could escape the effects of boycotts.
For instance, Boston Consulting Group surveyed 3,535 consumers in 11 cities in China in 2007 and
noticed that majority of Chinese consumers considered famous international brands such as Tide
(90percent), Head & Shoulders (86percent), Colgate (86percent) and Avon (74percent) as Chinese
local products.
63
Due to the pros and cons analyzed above, the authoritarian government would not
easily adopt boycotting as a foreign policy strategy, unless the government has exhausted most of the
other diplomatic measures or economic statecrafts.
2.1.3 China’s Economic Statecraft
The economic statecraft has long been a pillar of China’s foreign policy. Historically,
Chinese rulers used economic enticements ranging from gifts to the promise of loans and
investments to solidify relationships with foreign governments and advance Chinese influence. For
instance, the Han Dynasty minister proposed to offer the "five baits" to manage the mounted Xiong-
nu tribe in China's northwestern frontier, including “elaborate clothes and carriages,” “fine food,”
“lofty buildings,” and other inducements to submit to the Chinese emperor.
64

In the 1990s, as China emerged as one of the world’s largest economies, China increasingly
relied on economic coercion to pressure its neighbors and threaten U.S. interests in the Pacific.

62
Devinney Timothy, Pat Auger, Giana Eckhardt, The Myth of the Ethical Consumer, (Cambridge University Press:
Cambridge, 2010)
63
The Boston Consulting Group, “Foreign or Local Brands in China? Rationalism Trumps Nationalism,” (Boston,
Massachusetts: the Boston Consulting Group, 2017), http://image-
src.bcg.com/Images/BCG_Foreign_or_Local_Brands_China_Jun_2008_ENG_tcm55-161901.pdf
64
Henry Kissinger, World Order, (New York: Penguin Press, 2014), 21.
37
Never in world history has one government had so much power over so much wealth.
65
China's
leaders controlled a country that had the world's largest capital surplus and second-largest economy,
a highly coveted domestic market, and currency with growing regional appeal.
66
As China’s economic
might has grown, so too has its ability and temptation to use this power to advance their geopolitical
ends. Notable examples of Beijing’s willingness to use its economic clout for political ends include
a 2016 dispute with Mongolia over the visit of the Dalai Lama, who is regarded as a dangerous
separatist of China. The authorities in Beijing imposed new fees on commodity shipments between
the two countries. Given the importance of shipments for the landlocked country, China’s economic
pressure convinced Ulaanbaatar to settle the dispute quickly.
67

Scholars have examined whether political conflicts with China would be detrimental to
economic exchange for years. Christina Davis and Sophie Meunier
68
examined whether Sino-
Japanese political tension in 2005 impacted trade and FDI, and they argue there is no sign of
aggregate economic follows the deterioration of political relations. They argue that sunk costs in
existing trade and investment prevent the governments, firms, and consumers from changing their
behavior in response to political disputes. That is to say, during the era of globalization, actors lack
incentives to link political and economic relations.
Yet, the measurement of economic exchange matters. Other studies narrow the focus of
economic exchange from aggregate trade to other forms with similarly diverse findings. Kilian

65
Robert Blackwill and Harris, Jennifer. War by Other Means: Geoeconomics and Statecraft, (Cambridge,
Massachusetts: Harvard University Press, 2016).
66
James Reilly, “China’s Economic Statecraft: Turning Wealth into Power,” Lowy Institute, last modified: November
2013, https://www.lowyinstitute.org/publications/chinas-economic-statecraft-turning-wealth-power
67
“China slaps new fees on Mongolian exporters amid Dalai Lama row,” CNBC, last modified: December 1, 2016,
https://www.cnbc.com/2016/12/01/china-slaps-new-fees-on-mongolian-exporters-amid-dalai-lama-row.html
68
Christina Davis and Sophie Meunier. 2011. “Business as Usual? Economic Responses to Political Tensions.”
American Journal of Political Science 55(3):628–646.
38
Heilmann
69
found that Japanese car exports to China tumbled 32percent, or $1.9 billion, in the 12
months after the boycotts launched in September 2012 in response to Tokyo's purchase of disputed
islands known as the Diaoyu in China and Senkaku in Japan. But trade returned to normal levels
the next year. Andreas Fuchs and Nils-Hendrik Klann
70
demonstrate that the Chinese state punishes
economic partners when their head of state meets with the Dalai Lama, finding a decline in import
from that country to China for two years following a Dalai Lama visit. Raymond Fishman et al
analyzed market reaction to adverse shocks to Sino-Japanese relations in 2005 and 2010,
71
and
concluded that Japanese companies with high China exposure suffer relative declines during each
event window. The effect on Japanese companies is more evident for those operating in industries
dominated by Chinese state-owned enterprises; in contrast, firms with more Chinese employment
experience lower declines. These outcomes highlight the role of countries’ economic and political
institutions in mediating the impact of interstate tensions on firm-level results.
Over the past few decades, China has undergone exponential growth. It has converted a
centrally planned, closed economy, and has evolved into a manufacturing and exporting hub of the
world. China’s economic growth performance over the last 30 years has been impressive, and its
economic power is undeniable. In 2018, China is the second largest economy in the world, with a
nominal Gross Domestic Product (GDP) of $112.01 trillion, only after the U. S’s $19.39 trillion.
Based on Purchasing Power Parity (PPP), a measure that adjusts countries’ GDPs for differences in
prices, China ($23.15 trillion) is rated by both the International Monetary Fund (IMF) and the

69
Kilian Heilmann, “Does political conflict hurt trade? Evidence from consumer boycotts,” Journal of International
Economics, 99 C (2016), 179–191
70
Andreas Fuchs and Nils-Hendrik Klann, “Paying a Visit. The Dalai Lama Effect on International Trade,” Journal of
International Economics 91 (1), (2013): 164-177; Christina Davis and Sophie Meunier, “Business as Usual?
71
Raymond Fisman, Hamao Yasushi and Wang Yongxiang, “Nationalism and Economic Exchange: Evidence from
Shocks to Sino-Japanese Relations,” NBER Working Paper, No. 20089, May (2014).

39
World Bank as the world's largest economy. And according to the Centre for Economics and
Business Research (Cebr), it won't take long before China's economy beats the US's by other
measures. The Cebr predicts it will happen in 2029. Mainland China is now the biggest export
market for regional countries such as Australia, Korea, Mongolia, and Singapore (if Hong Kong is
included, there will be more countries on the list).
72

In terms of trade, China is the first largest importer and second largest exporter (after the
U.S.) in the world in 2017. Almost all regional countries' top three export destinations include China
(See Appendix I). Export to China is also rapidly increasing: exports to China from Indonesia and
Malaysia grew more than 40 percent in the first half of 2017; from Thailand and Singapore it was
almost 30 percent, and more than 20 percent from the Philippines. Export to China accounts for
roughly 10percent of exports of regional countries. Some regional members such as Australia (over
30percent of export share) and Korea (over 25percent) are more dependent on China than in other
countries. Mongolia, in particular, relies on China more than other regional members, its export to
China accounts for 75percent share of export from Mongolia, equivalent to 35percent of its GDP in
2016. In addition, some regional members such as Cambodia, Korea, Malaysia, Mongolia,
Singapore, and Vietnam rely more on China as the export destination of their products, and the
export (to China)/ GDP ratio in these countries was over 10percent in 2016 (See Figure 2.1).
73

72
“World Economic and Financial Surveys: World Economic Outlook Database,” IMF, last modified April 2018.
https://www.imf.org/external/pubs/ft/weo/2018/01/weodata/index.aspx
73
“Trade Map-International Trade Statistic,” International trade Center, Last modified: March 2019,
https://www.trademap.org/tradestat/Product_SelCountry_TS.aspx?nvpm=1percent7c156percent7cpercent7cpercent7c
percent7cTOTALpercent7cpercent7cpercent7c2percent7c1percent7c1percent7c1percent7c2percent7c1percent7c1pe
rcent7c1percent7c
40

Figure 2.1 Export to China/ GDP Ratio*100 in 2016

Moreover, China has the world's second outward foreign direct investment (FDI) stock.
74

China’s outward FDI stock has reached over $1.8 trillion by the end of 2017, up by $451.65 billion
from 2016. Furthermore, China is pouring money into Southeast Asia. The bulk of this Chinese
investment was funneled into infrastructure projects related to the Belt and Road initiative (BRI).
China has been spending heavily on regional infrastructure and property and purchasing
commodities such as rice, palm oil, rubber, and coal. The Chinese firms are also purchasing
electronic components and equipment from countries like Malaysia, Thailand, and Singapore. The
Chinese investment fuels the economic growth of regional countries. For instance, Chinese
investment invigorated the Philippine economy, making it the second-fastest growing economy in
Asia. The best growth figures from Malaysia and Thailand in recent few years were a by-product of
China’s huge market. However, China’s expanding economic presence is also propping up

74
Luo Shanshan, “China moves up to world’s second in outward FDI stock,” En.people.cn, last modified: October 08,
2018, http://en.people.cn/n3/2018/1008/c90000-9506363.html
41
fundamental weaknesses around Southeast Asia. It underlines China's dominance in a region that
will be under increasing pressure to follow Beijing's lead.
75

Chinese tourists are also herding for shopping malls, beaches, and temples around the
region. Chinese tourists are now among the top visitor arrivals in regional countries, such as
Indonesia, Japan, Korea, Singapore, Taiwan, Thailand and Vietnam. And Chinese visitors account
for over 20percent share of foreign tourists for most of the regional countries in 2017 (Figure 2.2).

Figures 2.2 Dependency on Chinese Tourism for Regional Members
Source: data collected from government tourism agencies in each country

The growing economic dependence on China is concerning for regional members with
underlying vulnerabilities. Because China is so integrated into economic, political and cultural life,
regional countries, or even the West, are vulnerable to such pressure. For instance, in 2017, China
had the biggest market size in the world, and China’s three top five destinations of outbound FDI

75
Marius Zaharia, “Southeast Asian economies get a lift from China. Later, they may get the bill, ‘Reuters, last
modified: Sep 7, 2017 https://in.reuters.com/article/seasia-economy/southeast-asian-economies-get-a-lift-from-china-
later-they-may-get-the-bill-idINKCN1BI34K
42
were western countries, including the US. (1st), the UK (3rd) and Switzerland (4th).
76
As of October
2018, a total of 530 Confucius Institutes and 1,113 Confucius Classrooms, a public educational
organization affiliated with the Ministry of Education of China, were in 149 counties and regions.
And 104 Confucius Institutes are in the United States.
77
Moreover, Chinese nationals make up the
largest group of international students in the US, accounting for roughly 30 percent (340,000) of all
foreign students in July 2018.
78

Over the past decade, China has also used the “sharp end” of its economic statecraft, turning
to coercive economic measures as a political tool. Using its hefty state wallet to both punish and
reward, China is able to politically maneuver countries with economic manipulation. Applying
carrots to those who comply with China’s political demands, and sticks to those who don’t, China
has increasingly relied on its financial ability to bend both countries and now companies to its shifting
political will. Countries taking foreign policy actions contrary to the CCP’s interests have found
themselves victims of measures, ranging from restrictions on exports to China to sudden drop in the
flow of Chinese tourists to a target country. Businessmen have also struggled with pressure and
restrictions on them in China, as well as threats of being fully cut out of the Chinese market.
In 2010, China decided to restrict rare earths exports to Japan during a maritime standoff
regarding the disputed Senkaku/ Diaoyu islands. This is one of the early contemporary cases of
Chinese economic coercion drawing widespread international attention. Another recent case that
attracted public attention was salmon import from Norway in 2011. China’s neighboring countries

76
Csis.org, "Does China Dominate Global Investment?" China Power Project, last modified July 19, 2018,
https://chinapower.csis.org/china-foreign-direct-investment/.
77
Rachelle Peterson, “How Many Confucius Institutes Are in the United States?” NAS, last modified Apr 09, 2018.
https://www.nas.org/articles/how_many_confucius_institutes_are_in_the_united_states
Xinhua. “149 countries, regions have Confucius Institutes,” Xinhua, last modified: October 5, 2018
http://www.xinhuanet.com/english/2018-10/05/c_137512799.htm
78
Youyou Zhou, “The impact of Chinese students in the US, charted and mapped,” Quartz, last modified: October 2,
2018 https://qz.com/1410768/the-number-of-chinese-students-in-the-us-charted-and-mapped/
43
were the other targets of these coercive economic measures, including Taiwan in 2016, and South
Korea in 2016 to 2017. The South Korea example highlights how geopolitical vulnerability to China
can increase as the bilateral economic relationship expands. Western governments may also value
trade over scoring diplomatic points, as when Greece vetoed a European Union

Table 2.1 China Coercive Tools by Case

Case
Popular
Boycotts
Import
restriction
Export
Restriction
Corporate
Pressure
Tourism
Restriction
Japan
Territorial Dispute
over Senkaku/Diaoyu
Islands
＊＊
Norway
Nobel Peace Prize
Award to Chinese
dissident Liu Xiaobo
＊
France
Hosting the Dalai
Lama
＊
Philippines
Territorial Dispute
over Scarborough
Shoal in South China
Sea
＊
Taiwan
Election of pro-
independence
President Tsai Ing-wen
and Democratic
Progressive Party
＊＊
Mongolia
Hosting the Dalai
Lama ＊
South
Korea
Deployment of U.S.
THAAD anti-missile
system
＊＊＊＊
Australia
Potential measures to
counter Chinese
influence in Australian
politics
＊＊
Source: Harrell et al. 2018 and author

44
statement criticizing China’s record on human rights, shortly after a Chinese firm had invested in the
port of Piraeus. Another case would be when an Australian publisher suddenly pulled a book from
publication, citing fears of “Beijing’s agents of influence”. Economic statecraft takes many forms.
Several economic tools are suited to the geopolitical application: trade policy (including energy and
commodities), tourism, investment policy, economic and financial sanctions, cyber, aid and financial
and monetary policies. Instead of surveying each instrument, this study focuses on boycotts, which
is rarely studied in International Relations.

2.2.3 Determinants of Boycotts
Why do anti-foreign boycotts occur? Scholars in business studies and economics systematically
studied boycotts, explaining anti-foreign boycotts from individual levels and exploring the socio-
psychological attributes to their intention and/or behavior.
79
Business studies focus on the general
relationship between consumers’ internal socio-psychological factors and their willingness or
unwillingness to buy a foreign product, and the analyses of these studies are mainly limited to the
individual level. These studies have examined only a static relationship between the consumption
of foreign products and its correlates, instead of the association between countries’ relations and
consumer behaviors. For example, scholars suggest that a set of key factors, such as consumer
animosity, can directly influence consumers’ purchasing behavior. Consumer animosity refers to
the resentment toward a product or a brand from a certain country, usually aroused by past or current

79
Erdener Kaynak and Kara, Ali. “Consumer perceptions of foreign products: An analysis of product-country images
and ethnocentrism,” European Journal of Marketing, 36(7/8) (2002): 928–949; Ravi Pappu, Pascale G Quester, and
Ray W Cooksey, “Country image and consumer-based brand equity: Relationships and implications for international
marketing,” Journal of International Business Studies, 38 (2007): 726–745.
45
military, political or economic tensions between two countries.
80
Scholars argue that consumer
animosity can influence consumers’ willingness to buy a product with a foreign origin,
81
or willingness
to boycott.
82
Moreover, some scholars also have examined changes in animosity over time and have
distinguished between stable animosity and situational animosity.
83

Researchers in business studies also contend that consumer ethnocentrism is another factor
influencing the consumption of foreign brands.
84
Ethnocentric consumers think that domestic
products are superior, and they also believe that the social well-being would be damaged if they
purchase foreign products.
85
It is a general attitude toward all foreign products, and unlike animosity,
consumer ethnocentrism does not target a specific country or time-period. Studies based on both
developed and developing countries have consistently shown that strong ethnocentrism is
significantly associated with the low evaluation of foreign products and less willingness to buy them.
86

80
Jill Gabrielle Klein, Richard Ettenson and Marlene D. Morris, “The animosity model of foreign product purchase:
An empirical test in the People’s Republic of China,” Journal of Marketing 62(1) (1998): 89–100.
81
Ibid, and Subhash Sharma, Terence. A. Shimp and Jeongshin Shin. “Consumer ethnocentrism: A test of
antecedents and moderators,” Journal of the Academy of Marketing Science 23(1) (1995): 26–37;
Terrence Witkowski, “Effects of animosity toward China on willingness to buy Chinese products,” in Managing in a
Turbulent International Business Environment, ed. by Gary N. McLean, Erdener Kaynak, and Oscar A. Aliaga,
(Hummelstown, PA: International Management Development Association, 2000), 470–477.
Wolfgang Hinck, “The role of domestic animosity in consumer choice: Empirical evidence from Germany,” Journal
of Euro Marketing 14(1/2) (2005): 87–104.
Shoham, Aviv, Moshe Davidow, Jill G. Klein, and Ayalla Ruvio, “Animosity on the home front: The intifada in Israel
and its impact on consumer behavior,” Journal of International Marketing, 14(3) (2006): 92–114.Kenichis Ishii,
“Nationalistic Sentiments of Chinese Consumers: The Effects and Determinants of Animosity and Consumer
Ethnocentrism,” Journal of International Consumer Marketing, 21 (4) (2009): 299–308.
82
Edwin J. Nijssen and Susan P. Douglas, “Examining the animosity model in a country with a high level of foreign
trade,” International Journal of Research in Marketing, 21(1) (2004): 23–28.
Malcolm Smith and Qianpin Li, “The boycott model of foreign product purchase: An empirical test in China,” Asian
Review of Accounting, 18(2) (2010): 106–130.
83
Kwon Jung, Swee Hoon Ang, Siew Meng Leong, Soo Jiuan Tan, Chanthika Pornpitakpan, and Ah Keng Kau, “A
typology of animosity and its cross-national validation,” Journal of Cross-cultural Psychology 33(6) (2002): 529–539.
84
Subhash Sharma, Terence. A. Shimp and Jeongshin Shin. “Consumer ethnocentrism: A test of antecedents and
moderators,” Journal of the Academy of Marketing Science 23(1) (1995): 26–37.
85
Ibid.
86
Taewon Suh and Ik-Whan Kwon, “Globalization and reluctant buyers,” International Marketing Review. 19(6)
(2002): 663–680; Cheng Lu Wang and Zhen Xiong Chen, “Consumer ethnocentrism and willingness to buy domestic
products in a developing country setting: Testing moderating effects,” Journal of Consumer Marketing, 21(6) (2004):
391–400; Heiner Evanschitzky, Florian v. Wangenheim, David Woisetschläger and Markus Blut, “Consumer
ethnocentrism in the German market. International Marketing Review,” 25(1) (2008): 7–32.
46
In addition, various studies have shown that patriotism and nationalism, related to the concept of
consumer ethnocentrism, directly influence consumers’ willingness to buy a foreign brand.
87
In many
cases, the effect of nationalism is mediated by consumer ethnocentrism and animosity,
88
or consumer
ethnocentrism is driven by nationalism.
On the other hand, scholars in economics and political science pay attention to external
factors at the macro level, conducting research on the effect of international relations on economic
relationships. This group of scholars examine relations between change in international relations on
economic relationships, and the scholars measure economic relationships with few distinct
measurements: bilateral trade in both goods and services,
89
and investment.
90
Others study the effects
of military hostility,
91
the impact of cultural aversion and mistrust on trade and investment,
92
the
impact of patriotism on the home bias in asset allocation,
93
and the role of ethnic differences in

87
Min C Han, “The effects of cue familiarity on cue utilization: the case of country of origin”, paper presented to the
Conference of the Academy of International Business, San Diego, CA (1988).
88
George Balabanis, Adamantios Diamantopoulos, Rene Dentiste Mueller, and T.C. Melewar, “The Impact of
Nationalism, Patriotism and Internationalism on Consumer Ethnocentric Tendencies,” Journal of International
Business Studies, 32 (1) (2001): 157–75.
Kenichi Ishii, “Nationalistic Sentiments of Chinese Consumers: The Effects and Determinants of Animosity and
Consumer Ethnocentrism,” Journal of International Consumer Marketing, 21 (4), (2009):299–308.
89
Brian Pollins, “Conflict, cooperation, and commerce: The effect of international political interactions on bilateral
trade flows,”American Journal of Political Science, 33(3) (1989): 737–761.
Zeev Maoz, “The effects of strategic and economic interdependence on international conflict across levels of analysis,”
American Journal of Political Science, 53(1) (2009): 223–240.
Christina Davis and Sophie Meunier, “Business as Usual? Economic Responses to Political Tensions.” American
Journal of Political Science 55(3) (2011):628–646.
Kilian Heilmann, “Does political conflict hurt trade? Evidence from consumer boycotts,” Journal of International
Economics, 99 (C), (2016):179–19.1
90
Nandini Gupta and Xiaoyun Yu, “Does money follow the flag?” Working Paper, (Kelley School of Business,
Indiana University, 2009).
91
Reuven Glick and Alan M. Taylor, “Collateral damage: Trade disruption and the economic impact of war,” Review
of Economics and Statistics 92 (2010):102–27.
Philippe Martin, Thierry Mayer and Mathias Thoenig, “Make trade not war?” Review of Economic Studies 75
(2008):865–900.
92
Luigi Guiso, Paola Sapienza and Luigi Zingales, “Cultural biases in economic exchange?” Quarterly Journal of
Economics 124 (2009):1095–131.
Guy Michaels and Xiaojia Zhi, “Freedom fries,” American Economic Journal: Applied Economics 2:256–81.
93
Adair Morse and Sophie Shive, “Patriotism in your portfolio?” Journal of Financial Markets 14 (2010):411–40.
47
exacerbating trade frictions.
94

There are also studies on how the sales of foreign products respond to the ebb and flow of
the relationship between the home country and the related foreign country, or to a major political
conflict between the two countries, examining the impact of boycotts on firm value. These include
several event studies that find mixed results.
95
Also related is a pair of studies on the effect of
consumer backlash on French wine purchases in the United States following France’s protests against
the Iraq War.
96
Other recent studies include Yuan Yang and Min Tang’s
97
work on the effect of
Sino-Japan relationship on the market performance of Japanese cars in China. Moreover, Fisman
et al.
98
also examined the effects of Sino-Japanese conflicts in the 21
st
century on the stock market
value of Japanese firms using an event study approach. They found that stocks of Japanese
companies with a high share of sales to China lose value.
However, previous scholars do not consider the role of governments in popular boycotts.
Indeed, boycotts are a bottom-up collective action and common political activism in democratic
countries. Democratic regimes rarely take part in anti-foreign boycotts, or the scale is relatively
small.
99
For instance, when Americans called for boycotts against French products in 2003, the state

94
Jenny C. Aker. Michael W. Klein, Stephen. A. O’Connell, and Muzhe Yang, “Are borders barriers? The impact of
international and internal ethnic borders on agricultural markets in West Africa.” Working Paper, Center for Global
Development (2010).
95
See, for example, Epstein and Schnietz, 2002, for the effect of consumer boycotts; Teoh, Welch, and Wazzan, 1999
on the impact of South African boycotts announcements
96
Orley Ashenfelter, Stephen Ciccarella, Howard J. Shatz, “French wine and the U.S. boycott of 2003: Does politics
really affect commerce?” Journal of Wine Economics 2 (2007):55–74.
Larry Chavis, and Phillip Leslie, “Consumer boycotts: The impact of the Iraq War on French wine sales in the U.S.,
“Quantitative Marketing and Economics 7 (2009):37–67.
97
Yuan Yang and Min Tang, “Do political tensions take a toll? The effect of the Sino-Japan relationship on sales of
Japanese-brand cars in China,” Asian Business and Management, Vol. 13 No. 5, (2014): 359-378.
98
Raymond Fisman, Yasushi Hamao and Yongxiang Wang. “Nationalism and Economic Exchange: Evidence from
Shocks to Sino-Japanese Relations.” Review of Financial Studies, (2014).
99
Such as US gay rights activists boycott Stolichnaya vodka over controversial Russian laws on homosexual, or some
call for a boycott of Sochi Olympics sponsors. See Mark Grigoryan, “London gay community joins boycott of Russian
vodka.” BBC. Last modified: July 30, 3013, https://www.bbc.com/news/world-europe-23506425
48
played no roles in agitating or quenching anti-foreign boycotts. As France was deeply opposed to
the Iraq War and threatened to use its veto power to stop the action in the U.N. Security Council,
the U.S. sentiment toward Paris plummeted, particularly among conservative Americans. Fox News
commentator Bill O’Reilly announced on the air that he was boycotting French products, and
Capitol Hill cafeterias famously renamed French fries as “freedom fries,” in an edible
admonishment of the French government. Yet it is obvious that the Bush government did little to
manipulate public opinion about this event. In contrast, authoritarian regimes that could control
mass media and the internet could influence people’s anti-foreign sentiment. In this sense, the
government is the determinant of boycotts, managing anti-foreign boycotts as foreign policy
instruments in an international dispute.
2.2 Theory
Why were there popular boycotts on some occasions but not others? I argued that the
Chinese government plays a role in initiating popular boycotts. The Chinese government manages
popular boycotts on and off via state media and propaganda campaign, guiding the anti-foreign
boycotts as an economic statecraft, in line with its foreign-policy goals. Anti-foreign boycotts cause
economic damage to foreign investors, put pressures on China's adversaries to comply with Chinese
foreign policy, and send a strong message that "the feelings of the Chinese people" is hurt. When the
Chinese government prefers to apply the hardline foreign policy, it is more likely to allow boycotts.
The interaction between the state and the public is the key to boycotts. On one hand, citizens might
be mobilized or not, depending on whether there is genuine anti-foreign sentiment or not. On the

49
other hand, using state media, China directs people’s sentiment, and signal “green light” or “red
light” to popular boycotts against its foreign opponents. For the Chinese government, allowing
boycotts not only signals public opinion but also creates economic costs toward its opponents. When
the Chinese government prefers to signal discontent and to enforce economic statecraft toward its
foes, it would allow popular boycotts.
100

Citizen Boycotts Mobilization
Mobilize Not Mobilize
State
Encourage/Allow
Box I: Allowed Boycotts
-Boycotts against French products
in Dec 2008
-Boycotts Against Japanese
Products in 2012
- Boycotts Against Korean Products
in May 2016
Box III. Manufactured Boycotts
- Boycotts Against Korean Products
in March 2017
Discourage
Box II. Stifled Boycotts
-Boycotts Against Japanese
Products in 2005, 2010
-Intended Boycotts against French
products in April and May 2008
- Intended Boycotts against
American and Filipino products in
2016
Box IV. No Boycotts

Table 2.2 Allowed, Stifled and Manufactured Boycotts

100
As it is demonstrated in Table 2.2. This theory overlaps with nationalist protest literature, similar to Weiss’s work in
2014. Yet popular boycotts and nationalist protest are in essence different and don't always occur at the same time as
mentioned in the previous chapter. Moreover, as mentioned in the previous section, the signal mechanism of boycotts
to political stability for an authoritarian regime like China.
50
My theory is based on two assumptions: first, states are rationally led and there are only two
domestic actors: the state and the public. This assumption is about the level of analysis and the
nature of actors. By rationally led, I mean that regimes seek survival and states behave as interest-
maximizers in their foreign policy, ruling out the cases in which leaders’ personality or emotions
sway their decisions. For the purpose of parsimony, I assume only two domestic actors—the state
and the public,
101
excluding the role of bureaucracies, factions, interest groups or individuals within
these two actors. So the proposed theory should work to the extent that reality resembles such a
simplification—that is, when the effects of the differences within the state or within the public are
negligible. This simplification of reality is represented in some but not all cases. As such, I do not
claim my theory will explain all state propaganda strategies, but an ample number of cases fit the
assumptions specified here.
The second assumption is about the nature of state-society relations. I assume states have
the ability to affect public opinion. The state is capable of effectively influencing public opinion.
Confining my research scope to authoritarian countries certainly meets this requirement, since China
is known as a society in which the government strictly regulates news media and often censors public
information. In China, state media plays a crucial role in interstate disputes. The state directs public
opinion by manipulating media through propaganda, in order to draw the public in line with its
intended foreign policy and for the purpose of gaining leverage in international negotiations. The
Chinese government could manage public opinion, and “switch” boycotts on or off through the
influence of mass media, just like an anti-foreign protest.

101
I use the word “state” in two senses: one relative to the domestic public, equivalent to “the regime,” “the
government,” and “leaders,” meaning the governing body; the other is used relative to other states, including both the
governing body and the public, but at an international level. I use “the public” and “the society” interchangeably.
51
Moreover, as the Chinese government has also been famous for its internet censorship, it
has the capacity to increase internet censorship as to quench the anti-foreign sentiment. Internet in
China has played an overarching role in constructing China's public sphere, empowering civil
discourse, and helping build the public agenda. Yet Chinese authorities have ubiquitous
mechanisms in place to control the public information flow, including the sophisticated filtering
system known as the Great Firewall and a new requirement that micro-bloggers must register with
their real identities. The Chinese government could selectively censor or allow the expressed views
of the Chinese people in interstate disputes.
In short, I argue that the occurrence of popular boycotts is not random but managed carefully
by the state, and boycotts serve as an economic statecraft for China’s foreign intention. By directing
the popular boycotts on and off, the Chinese government intends to compel the foreign adversaries
to comply with its foreign policy goals. Boycotts could work as an economic coercion tool to exhibit
citizens’ nationalist sentiment and show the resolve of the Chinese government. When China
intends to apply the hardline policy, it would punish its foes by boycotts, creating relatively large
economic repercussions for its adversaries, which could coerce them to change their unfriendly
policies. When public opinion on the dispute is relative weak before the international conflict and
the state prefers to apply a hardline policy, media contents are generally inflammatory--self-
victimizing, accusing others for aggression, and implying injustice. The state would also encourage
boycotts events if other economic coercion policies are not feasible.
On the other hand, if public opinion on the dispute is already strong and there is public
calling for anti-foreign boycotts, the state would pick and choose depending on its foreign policy
intent. If the state prefers hardline policy, the state would allow boycotts, and initiates a propaganda
campaign and release strongly worded official statements against its foreign counterpart. Instead, if
52
the state favors the moderate foreign policy, state media would criticize the boycotts as unpatriotic,
and appeal to citizens for being “rational.”
Orienting Hypotheses 1: The state allows the public to boycott when pre-crisis public opinion on
the dispute is strong and the state prefers a hardline policy (Box I in Table 2.2).
Orienting Hypotheses 2: The state launches a propaganda campaign to discourage boycotts when
public opinion on the issue is strong ex-ante and intend to boycotts, yet the state prefers a moderate
policy (Box II in Table 2.2).
Orienting Hypotheses 3: The state launches a propaganda campaign to agitate or allow the public to
boycott when pre-crisis public opinion on the dispute is weak ex-ante, yet the state prefers a hardline
policy (Box III in Table 2.2).
2.3 Research Design
Research Design
This dissertation uses a case study research design in China to explore the causal mechanisms
proposed by these three orienting hypotheses. It adopts this research design for two reasons. First,
the data on anti-foreign boycotts in an authoritarian regime is limited. Examples of anti-foreign
boycott cases that occurred in an authoritarian regime with full control of the media are limited.
Moreover, even though other non-democratic states, like Russia, had been manipulating anti-foreign
boycotts, there are not a lot of authoritarian countries that are highly integrated into the global
economy like China.
53
The research agenda on anti-foreign boycotts in international relations is incipient, thus it is
necessary to establish preliminary conjectures about zombie firms’ political origins in the absence of
extant theory. Intensive investigation through case studies is better suited to this task than large-n
cross-case approaches, since the latter requires the relevant variables and outcomes to be more
refined.
102

The dissertation explores its orienting hypotheses from China’s three cases of international
disputes. In Chapter III, this study would examine Sino-Japanese territorial conflicts over
Diaoyu/Senkaku Island in 2012 and how the Chinese government manipulated people’s sentiment
with state media and passively allowed their citizens to initiate boycotts (BOX I in Table 2.2.).
Chapter IV assesses how the Chinese government could actively encourage anti-foreign boycotts and
how Chinese citizens react to this signal from the government. This case demonstrates that an
authoritarian state can instill nationalist sentiment into its citizens. And even though not all people
follow the boycott mobilization, there are always some people who participate (BOX II in Table
2.2.). Moreover, some businessmen or public figures even take it as an opportunity to create their
patriotism image, which might be beneficial to their business or personal career. For the last case in
Chapter V, I would demonstrate how the Chinese government would stop the anti-foreign boycotts
when it does not agree with their foreign policy intention (BOX III in Table 2.2.). When judgment
by an international tribunal in The Hague came down overwhelmingly in favor of claims by the
Philippines in the South China Sea case, Chinese citizens mobilized boycotts against American and
Filipino products. However, Chinese state media swiftly criticized and condemned the boycotts.

102
James Mahoney, “Qualitative Methodology and Comparative Politics.” Comparative Political Studies 40(2) (2007):
122–44; John Gerring, Case Study Research: Principles and Practices. (New York: Cambridge University Press, 2007),
39-43.

54
Data
Dependent variable
The dependent variable in this dissertation is anti-foreign boycotts. Boycott activities with unfinished
products and stores having high visibility shows the result of boycotts, such as cars.
103
The reason to
choose sales of visible products as a measurement is that visible products normally are the victims
of political risks, as Kristin Vekasi's studies showcased in her work. Firm visibility, or the degree of
exposure a firm has to popular Chinese consumers, is a powerful and reasonable predictor of
political conflict. It is highly unlikely for consumers to boycotts non-visible products. With higher
brand equity, it is more likely for the customer to identify the products and buy it, yet the drawbacks
are they also become the visible target of boycotts. Thus, I will pick the sales number of a brand
with high visibility and tourism data as the measurement for the dependent variable. The details of
the dependent and independent variables are shown in Table 2.3.
Independent variable
As for independent variables, the first one is whether the state allows or even encourages boycotts
or not. This variable intends to measure how Chinese government signals its attitude to boycotts.
There are multiple ways to measure it. The easiest way is whether state media criticized boycotts or
not. For example, when Chinese netizens urged boycotts against KFC in 2016, the official party-
state media Xinhua( 新华) and People’s Daily( 人民日报) tried to calm down the debate by stating
that “torturing oneself is not loving the country” ( 折腾自己不是爱国). The state media signaled to

103
See Kristin Vekasi, “China's Political Rise and Japan's Economic Risk: Multinational Corporations and Political
Uncertainty,” (Doctoral dissertation, the University of Wisconsin-Madison, 2014).

55
stop boycotting directly.
The others are indirect measurements of government's standpoint toward anti-foreign
boycotts. First, I use computer-assisted sentiment analysis, measuring the sentiment of the Foreign
Ministry Spokesperson's remarks on certain disputes. The Spokesperson's remarks from the
Foreign Ministry are normally quoted by Chinese news and spread by Chinese netizens, which set
the tone of government, and how Chinese people understand their government's position. In July
2018, I analyzed the Spokesperson's Remarks on the webpage of the Ministry of Foreign Affairs
(MFA) of the People's Republic of China. The remarks only dated back to April 2015. I also
collected the remarks data from 2010 from the Archives of the Chinese Government in OriProbe
Information Services. Using R programming language, I collected the remarks by searching
keywords of certain countries, such as Japan, Korea, and the Philippines. After segmenting the text
in the corpus by R package JiebaR, I measured the sentiment of foreign remarks by National Taiwan
University Semantic Dictionary (NTUSD).
Second, I also analyzed People's Daily articles from People's Daily Data Base ( 人民日报图
文数据资料库). As a state-owned mouthpiece, People's Daily is one of the most authoritative
sources of information when it comes to reflecting Chinese leaders’ views. Editorials in the People's
Daily are regarded both by foreign observers and Chinese readers as authoritative statements of
official government policy and are therefore studied with care. I used the Boolean search term
"event + targeted country" to collect the data from the database first and time range of 12 months
before the event happened and 12 months after the event happened. For instance, in the case of
Japan, searched for the term " 钓鱼岛 (Diaoyu islands) + 日本(Japan)”. I also used the NTUSD
56
dictionary to measure the sentiment of news from People’s Daily against certain issues. The detail
of validation is shown in Appendix 2.
Moreover, I also use LDA topic modeling to examine the topics of People's Daily, to
measure how the Chinese state media triggers the anti-foreign sentiment from the public by linking
the international disputes with certain topics. LDA topic modeling assumes that each collection of
documents comprises a set of topics. LDA topic modeling is unsupervised machine learning, which
means that the model does not require researchers to know, ex-ante, what these topics might be.
Alternatively, LDA was used to detect topics by using co-occurrence of words across the collection
of documents, as well as clustering and sorting documents into these topics (Blei, Ng, and Jordan
2003). LDA does require researchers to select the number of topics. Like sentiment analysis, LDA
also requires that researchers conduct validation tests to ensure that topics are interpretable and valid,
as opposed to being produced by random chance or statistical error (Grimmer and Stewart 2013:4).
The second independent variable is the mobilization of citizen boycotts. As with the first
independent variable, there are only a few direct measurements for this variable. The first way to
measure whether there is the mobilization of boycotts is by secondary sources: news about people
who call for boycotts. This study checks several news resources to see whether there is mobilization
or not. Second, determine whether the Chinese netizens demand boycotts on social media,
including Sina Weibo or online forums (like Tianya, Maoyan, Tiexue, Guancha or Gongshiwang).
This study examines two measurements, first is an opinion survey of the impression of the other
country, and the second examines anti-foreign sentiment on social media before and after the
international conflicts. The following chapters will be three cases for this dissertation.

57
Table 2.3 Table of DVs and IVs

Definition/Coding Rules Data Sources and Observables
DV:
boycotts or
not
Popular
Boycotts
Units of foreign products sales in China 1) Monthly foreign car sales data in
China
(from MarkLines Automotive Data).
2) Other sales data of foreign brand.
3) Numbers of foreign tourists visited a
foreign country.
IV1: State’s
intention
Key
Comments
from state
media or
government
statement
News from State Media literally
discourages boycotts activities, binary
variable, 1 as news published related to
boycotts repression, 0 as none.
1) Multiple news sources from
Chinese state media.
Tone of
MFA
The tone/sentiment of Spokesperson's
Remarks from the Ministry of Foreign
Affairs of PRC. Using sentiment analysis
to measure by positive and negative
words from the dictionary. If there is a
negative word in the statement, minus 1,
vice versa plus 1.
1) The spokesperson's Remarks is
from the website of Ministry of Foreign
Affairs of PRC.
The tone of
State Media
People's
Daily
The tone of state media expresses
measured by positive and negative words
from the dictionary. If there is a negative
word in news, minus 1, vice versa plus
1m otherwise 0.
1) Data from People's Daily - Renmin
Ribao database
104

Censorship
Index
1) Weibo Scope Censorship Index
from HKU.
Other
Sources
Hardline Foreign Policy: unprovoked
threat, display, or use of force or
economic sanctions; when provoked,
escalated responses
Moderate Foreign Policy: territorial
compromise; shelving a dispute
(deferring settlement); passive and
proportionate responses to provocations

1) Archives and Interviews: records of
internal deliberations; recollections by
officials and analysts with privileged
access;
2) The logical deduction from
international factors about state
incentives to pursue a hardline or
moderate policy;
3) Secondary sources: accounts of the
actual policy pursued ex-post.

104
“People's Daily - Renmin Ribao Data Base,” OriProbe, last modified May 2019, http://www.oriprobe.com/
58
Table 2.3 Table of DVs and IVs (Continue)

Definition/Coding Rules Data Sources and Observables
IV2: Citizen
Boycotts
Mobilization
Boycotts
Mobilization
People mobilize boycotts or
not.
1) Multiple news resources.
2) Social media: expression of public
emotion prior to or at the beginning of a
crisis. Including Sina Weibo and online
forums (like Tianya, Maoyan, Tiexue,
Guancha or Gongshiwang).
Anti-Foreign
Sentiment

The extent of public knowledge
(high or low) and the intensity
of public emotion (high or low)
of a dispute before a state
responds to a crisis situation.
1) Social media
2) Surveys taken prior to or at the
beginning of, and after an international
dispute: thermometer towards the target
country.
3) Baidu Search Index: average daily
search volume one year prior to a crisis.

59
Chapter III Allowing Boycott: 2012 Diaoyu/Senkaku
Islands Crisis

Introduction
This chapter examines the case of the 2012 anti-Japanese boycotts in China. In January 2012, the
Japanese government initiated the naming process for Japan's 200-nautical mile exclusive economic
zone, including four of the Diaoyu/Senkaku Islands. This policy rankled China, and former Tokyo
governor Shintaro Ishihara’s comments to buy the disputed islands added fuel to the fire. The
disputes intensified by mid-August in the same year when the Japanese Coast Guard detained a small
group of protesters. Adding to the tensions, on September 11, 2012, Tokyo nationalized some of
the islands by purchasing them from private Japanese owners.
This chapter shows how an authoritarian state allowed anti-foreign boycotts to occur. The
chapter is the case aligning with Box I in Table 2.2, indicating that the state allows the public to
boycott when pre-crisis public opinion on the dispute is strong and the state prefers to take a hardline
policy. Once Chinese people's sentiment was incited by the event, the Chinese government endorsed
boycott and protest to signal public discontent. In September 2010, a Chinese trawler collided with
a Japanese patrol boat in the disputed Senkaku/Diaoyu island chain, and the Japanese detained the
Chinese skipper. After the confrontation in 2010, Beijing halted exports of rare earth, a key
technology input, to Japan. However, the Chinese government did not apply any import restriction
or regulatory measures against Japanese foreign direct investments. When island dispute flared up
again in 2012, China took the lesser step of encouraging widespread boycotts against Japanese goods
and allowing protests that damaged Japanese companies in China. During the Sino-Japanese conflict,
60
the Chinese government implicitly supported boycott, praising it as “patriotic.”
105
The Chinese
government was restrained from enforcing any other policies to go along with popular boycotts. The
Chinese government simply played a “back-seat driver,” managing people’s sentiment, and signaling
“green light” to boycott and protest against its foreign opponents via state media.
The chapter is structured in four parts. The first section presents the event of Sino-Chinese
disputes. The second section examines how the Chinese government and state media managed their
position against Japan. The third section analyzed how the Chinese protested and boycotted against
Japanese products as well as how the Chinese government managed popular boycotts. This last
section reveals that aside from popular boycotts, the state refrained from using coercive economic
measures.
3.1 Event: Senkaku/ Diaoyu Islands Dispute
Three entities were attempting to lay claim on the Senkaku/ Diaoyu islands—Japan, the
People's Republic of China (PRC), and the Republic of China (Taiwan). In the morning of
September 7, 2010, the Chinese fishing trawler Minjinyu 5179 entered the disputed waters near the
Senkaku Islands and collided with two Japanese Coast Guard patrol boats.
106
Subsequently, Japan
detained the skipper, Zhan Qixiong ( 詹其雄). The detention caused a major diplomatic quarrel
between China and Japan. Japan refused to grant release and extended the detention for a further
10 days, even though China repeatedly demanded the release of the skipper. Since the collision,
the Chinese government summoned the Japanese ambassador, Uichiro Niwa ( 丹羽宇一郎), several

105
James Reilly, “A Wave to Worry About? Public Opinion, Foreign Policy, and China's Anti-Japan Protests”, Journal
of Contemporary China Volume 23, Issue 86 (2014): 197-215.
106
Masami Ito and Mizuho Aoki, “Senkaku collisions video leak riles China,” Japan Times, last modified
https://www.japantimes.co.jp/news/2010/11/06/national/senkaku-collisions-video-leak-riles-china/#.XOTgEFNKg_U

61
times. The Chinese government also canceled official meetings of the ministerial level and above.
In the end, Japan released the detained Chinese crewmembers without charge. In China, the event
was perceived as a diplomatic victory, and Chinese media raved about the Chinese diplomatic
triumph.
107
In contrast, the Naoto Kan( 菅直人) administration was criticized for their "weak-
kneed" handling of Japan’s spat with China.
108

In January 2012, the Japanese government initiated the naming process for Japan's 200-
nautical mile exclusive economic zone, and they completed it in March in the same year, including
four of the Diaoyu/Senkaku Islands.
109
China retaliated by announcing Chinese names and locations
for seventy-one islets in the East China Sea. On March 6, 2012, former Foreign Minister Yang
Jiechi( 杨洁篪) urged Japan to “properly handle sensitive issues” concerning history and the East
China Sea Days after the memorandum to improve bilateral communications.
110
In spite of these
positive gestures, both sides unceasingly pursued unilateral efforts to build up the legal and physical
basis of their territorial claims. Days after the memorandum to improve bilateral communications,
the Japanese government declared that it had registered one of the five islands as a national asset.
This move inflamed China and was condemned by the Chinese Foreign Ministry as “unlawful and
invalid.”

107
“Takahashi, Kosuke/ China signals V for victory,” Asia Times, last modified October 5, 2010
https://archive.is/20101031211613/http://atimes.com/atimes/Japan/LJ05Dh01.html#selection-1329.10-1329.99
108
“Kan seeks intl stage for Senkaku spat solution,” The Yomiuri Shimbun, last modified September 29, 2010
https://archive.is/20101007212409/http://www.yomiuri.co.jp/dy/national/T100928004733.htm#selection-547.86-
547.106
109
“mei ti cheng ri ben wei diao yu dao fu shu dao yu wan cheng zan ming ming 媒體稱日本為釣魚島附屬島嶼完成
暫命名 [The media said that Japan has temporarily named the island of Diaoyu Island],” Haiwai People's Daily, last
modified January 30, 2012 http://haiwai.people.com.cn/BIG5/n/2012/0130/c232573-16706522.html
110
“FM urges Japan to 'properly handle' issues,” China Daily, last modified March 6, 2012,
http://www.chinadaily.com.cn/china/2012-03/06/content_14768078.htm
62
On April 17, 2012, Tokyo governor Shintaro Ishihara( 石原慎太郎), known for being
outspoken, proposed his plans to buy a group of disputed islands.
111
Mr. Ishihara made a claim
during a speech at the Heritage Foundation, a think-tank in Washington. Ishihara pledged to
develop facilities on the islands, challenging Japan’s ban on citizens from landing on the islands. In
response, Chinese Foreign Ministry spokesman Liu Weimin( 刘为民) maintained that China had
"indisputable sovereignty" over the islands. In the same statement, Liu also said that unilateral action
from Japan would be "illegal and invalid".
112

Ishihara also accused former Japan's centrist prime minister, Yoshihiko Noda( 野田佳彦)
of failing to protect the national interests, for fear of displeasing China. Under pressure, Noda had
since suggested that the state is considering buying the islands, a move that would further upset China.
"We would like to keep all options open," he said in parliament.
113
On July 7, 2012, Japanese Prime
Minister Yoshihiko Noda claimed that the Japanese government is considering purchasing the
disputed islands. In reaction to this statement, the Chinese government furiously protested; the
Ministry spokesman Liu Weimin retorted, "No one will ever be permitted to buy and sell China's
sacred territory".
114

111
“Tokyo to buy disputed islands, says Governor Ishihara,” BBC, last modified April 17, 2012
https://www.bbc.com/news/world-asia-17747934
112
Ibid.
“Tokyo governor seeks to buy islands disputed with China,” Reuters, last modified April 17, 2012
https://www.reuters.com/article/us-japan-china-islands/tokyo-governor-seeks-to-buy-islands-disputed-with-china-
idUSBRE83G0C020120417
“Ishihara trying to buy Senkaku Islands,” Kyodo, last modified April 18, 2012
https://www.japantimes.co.jp/news/2012/04/18/national/ishihara-seeking-to-buy-senkaku-islands/#.XBQFyxNKhTY
113
“Tokyo's right-wing governor plans to buy disputed Senkaku Islands,” Guardian, last modified April 19, 2012
https://www.theguardian.com/world/2012/apr/19/tokyo-governor-senkaku-islands-china
114
“China dismisses Japan plan to buy disputed islands,” Reuters, last modified September 12, 2012
https://www.reuters.com/article/us-china-japan-islands/china-dismisses-japan-plan-to-buy-disputed-islands-
idUSBRE86701A20120708
“Japan protests at Chinese ships near disputed islands,” BBC, last modified July 11, 2012
https://www.bbc.com/news/world-asia-china-18792556
63
The crisis did not begin until mid-August in 2012 when a small group of protesters set sail
from Hong Kong with the intent of landing on the disputed terrain. The activists journeyed to
Senkaku islands on the anniversary of WWII surrender and successfully landed on one of the
islands. The Japanese Coast Guard promptly detained the activists. Their detention enraged many
Chinese. Adding to the tensions, two Japanese cabinet ministers defied Noda by paying homage at
the Yasukuni shrine for the war dead on August 15, 2012. The national public safety commission
chairman, Jin Matsubara ( 松原仁), and the transport minister, Yuichiro Hata( 羽田雄一郎), visited
the shrine that many in China and Korea regard as a symbol of Japan's past militarism. They were
the first cabinet ministers to pay tribute to the deaths memorialized by the shrine, since the
Democratic Party of Japan swept to power in 2009, even though the party promised to forge warmer
ties with the rest of Asia.
115

In Beijing, citizens launched protests in front of the Japanese embassy on August 15, 2012.
In the morning of August 19, a crowd gathered with placards printed with phrases such as "Japan
must confess her crimes" and "Return us the Diaoyu Islands." In the Southern city of Shenzhen,
protesters called for the boycott of Japanese goods, chanting slogans such as "Defend the Diaoyu
Islands" and "Smash Japanese Imperialism" while marching down the streets. In the process, many
protesters tore up Japanese flags, smashed Japanese-branded cars
116
and vandalized shops selling

115
“Japanese police arrest Hong Kong activists who sailed to disputed islands,: The Guardian. Last modified
https://www.theguardian.com/world/2012/aug/15/japanese-arrest-activists-territory-dispute
116
“Zhong guo fan ri you hang shi kong jian ri ben che jiu za jiu tui fan 中國反日遊行失控見日本車就砸就推翻
[China's anti-Japanese paradeis out of control, overthrow the Japanese cars while seeing them.]. 苹果日报 ping guo ri
bao, last modified August 19, 2012,
http://www.appledaily.com.tw/realtimenews/article/international/20120819/138155.
64
Japanese goods.
117
Protesters hurled rocks at ramen shops, destroying them.
118
According to Sing
Tao Daily, the armed police were sent to stop the violent protests, driving the protesters away and
detaining several over-reacting protesters.
119
In response, Japanese Vice Foreign Minister Kenichiro
Sasae( 佐々江賢一郎) condemned the protests, saying they are "unacceptable", and expressed
disappointment over anti-Japanese protests in China on August 19.
120

Subsequently, on September 11, 2012, Tokyo nationalized some of the islands by purchasing
them from private Japanese owners. The Japanese government hoped to de-escalate the tense
standoff over this maritime region by taking it off of Ishihara and the Japanese right-wing's hands. It
wildly backfired as it was widely viewed within China as an especially provocative measure. Many
Chinese interpreted Japan’s acts as an attempt to 'nationalize' the islands. Chinese nationalists were
agitated, protesting not just online, but outside the Japanese embassy in Beijing, in Shenzhen, and in
other major Chinese cities. Chinese Netizen demanded online to the People’s Liberation Army
(PLA) to 'start fighting ', as 'there are 1.3 billion people backing you.’
121
On the weekend before
September 18, the eighty-first anniversary of the Mukden Incident that led to the Japanese
occupation of Manchuria in 1931, there were street protests in scores of cities across China. Carrying
portraits of Mao Zedong, the demonstrators chanted slogans like 'Kill all Japanese!' and 'Declare

117
“Shen zhen you fan ri shi wei zhe po huai yi liang ri chan jing che 深圳有反日示威者破壞一輛日產警車 [Anti-
Japanese protesters destroying a Nissan police cars in Shenzhen]. xiang gang wen hui bao 香港文匯報.
, last modified http://news.wenweipo.com/2012/08/19/IN1208190040.htm
118
"Territorial tensions flare between China and Japan". LA Times, last modified August 19, 2012,
https://latimesblogs.latimes.com/world_now/2012/08/china-japan-territorial-tensions-flare.html
119119
Li, jian ren, 李建人, "20 cheng da you hang fan ri nu huo xi juan jing ju duo ren 20 城大游行反日怒火席捲警拘
多人 [Protests occurred in 20 cities, anti-Japanese sentitment rises, police caught multiple people]". xing dao ri bao 星
岛日报. Last modified August 20, 2012, http://www.dushi.ca/tor/news/bencandy.php/fid11/lgngbk/aid77355
120
Chen wei 陈薇, " ri ben ju jue zhong fang kang yi cheng zhong guo bao diao zhe deng dao zai xian 日本拒绝中方抗
议称中国保钓者登岛在先". huan qiu shi bao 环球时报, last modified August 20, 2012.
http://news.eastday.com/c/20120820/u1a6797648.html
121
Sina Forum, available at: comment5.news.qq.com/comment.htm?site=news&id=32994362 (last accessed November
11 2014); “The Internet, Social Media, and a Changing China,”edited by Jacques deLisle, Avery Goldstein, Guobin
Yang
65
war!'. Amidst widespread vandalism, several Japanese factories were forced to close.
122

3.2 Allowed Nationalism
After the outbreak of Sino-Japanese territorial conflict, people became aware of the event, and a
mass amount of online activities proceeded. Over 1.1 millions of searching of keywords'
Senkaku/Diaoyu Islands’ on Chinese Google: Baidu( 百度) per day in August 2012, and then peaked
in early September (See the blue line in Figure 3.1). This might not look like a great awareness of
the event. But if we compare the Hollywood blockbuster movies released in 2012, including 'Batman'
and 'Avengers' in 2012 (See green and orange lines in Figure 3.1.), we could how many Chinese
netizens are aware of the Sino-Japanese disputes.
123

Figure 3.1 Baidu Search Counts in Terms of Key Word
“Diaoyu Islands ( 钓鱼岛)” in 2012
Notes: Blue line: Searching for 'Diaoyu Islands', Green line: Searching for 'Bat man', Orange Line: Searching for
'Avengers.'
Source: https://index.baidu.com/v2/main/index.html#/trend/ percentE9 percent92 percent93 percentE9 percentB1
percentBC percentE5 percentB2 percent9B?words= percentE9 percent92 percent93 percentE9 percentB1 percentBC
percentE5 percentB2 percent9B, percentE8 percent9D percent99 percentE8 percent9D percentA0 percentE4
percentBE percentA0, percentE5 percentA4 percent8D percentE4 percentBB percent87 percentE8 percent80
percent85 percentE8 percent81 percent94 percentE7 percent9B percent9F

122
Peter Hays Gries, Derek Steiger and Tao Wang. “Popular Nationalism and China’s Japan Policy: the Diaoyu
Islands protests, 2012–2013,” Journal of Contemporary China, Volume 25, Issue 98, (2016):264-276.
123
I also compare other tops 10 box offices movies in China in 2012, and the Baidu Index of those movies are all lower
than two sampled films.
66

In 2012, Chinese popular media and news websites were dominated by sensationalist coverage of
Noda's announcement. One cover defiantly declared, 'China says NO', in outsized print.
124

A survey
by a Guangzhou research institute on September 12 and 13 covered 597 Chinese cities and found
that 80 percent of respondents agreed with the PLA's Liberation Daily that 'Japan's purchase of the
islands was the most serious challenge to China's sovereignty since World War II', while 61 percent
felt that the Chinese government should take military action in response.
125

On September 11, 2012,
the popular Phoenix (fenghuang) website’s online poll received over one million responses (60
percent) urging 'military actions' toward Japan.
126

A PRC-affiliated Hong Kong newspaper insisted:
'the Japanese government must directly face the voice of the Chinese people'.
127

Official rhetoric echoed the public's anger. On September 10, Premier Wen Jiabao assured
an audience at China's Foreign Affairs University that China would 'never yield an inch' of the islands.
Retired General Luo Yuan urged China to use the islands as a military practice ground to test-fire
missiles, adding: 'The next step is to build up a military presence to eventually take over the islands'.
128

Spokesmen from the Chinese Ministry of Foreign Affairs (MFA) also used strong words against

124
For images, see: 'Jujiao diaoyudao baozhi touban xiankouhao biaoti’ [‘Focusing on the Diaoyu Islands, many
newspapers carry slogans as front page headlines'], Sohu Media, (September 11, 2012), available at: http://
media.sohu.com/20120911/n352844601.shtml.2012-9-11.
125
See Wiess 2014.
126
See Reilly 2013.
127
See Weiss 2014.
128
Raymond Li. “Papers go ballistic over Diaoyu dispute with Japan.” South China Morning Post. Last modified:
September 16, 2012 https://www.scmp.com/comment/insight-opinion/article/1037887/papers-go-ballistic-over-diaoyu-
dispute-japan

67

Figure 3.2 Sentiment Analysis of Foreign Ministry Spokesmen’s
Remarks on Senkaku/Diaoyu Islands in 2012

Japan on the issue of the Senkaku/Diaoyu Islands. Reviewing the spokesperson's remark related to
Senkaku/Diaoyu Islands in Chinese MFA regular press conference, one could see how MFA
spokespersons have been condemning Japan since the initiation of Japan’s islands naming process
(See Figure 3.2). State media People's Daily also maintains negative tones against the incidents since
the naming process. Nonetheless, since street protests and widespread boycotts in August and
September 2012, the People’s Daily report with both positive and negative tones against the issues
(See Figure 3.4).
68

Figure 3.3 Sentiment Analysis of
News on Senkaku/Diaoyu Islands from People’s Daily from 2010 to 2012 (N = 268)

Figure 3.4 Sentiment Analysis of
News on Senkaku/Diaoyu Islands from People’s Daily in 2012 (N = 214)

69
Chinese Twitter, Weibo, also showed how people were aware of the event. Daily posts
containing “Diaoyu Islands” on Weibo increased significantly after August 12, and four dates
(August 16 and 18, and September 11 and 15) stood out as having high post volume and
corresponded to important real-world events. The first date, August 16 was the day after Hong Kong
activists reached the disputed islands. The date captures much of netizens’ initial reaction to events.
The second date was a peak of public criticism of the Chinese government, with netizens blaming
the government’s inactivity in securing the activists’ release from Japanese authorities. The third date
is the day the Japanese government officially nationalized the islands. The last date was the beginning
of the weekend that saw the most massive street demonstrations of any weekend during the period
(See Figure 3.6).
129

Figure 3.5 Daily Posts Containing “Diaoyu Islands ( 钓鱼岛)”
Source: Cairns and Carlson (2016)

129
Christopher Cairns and Allen Carlson, “Real-World Islands in a Social Media Sea: Nationalism and Censorship on
Weibo during the 2012 Diaoyu/Senkaku Crisis,” China Quarterly 225 (January 2016): 23–49.
70

Moreover, Weibo ( 微博) also provides evidence that Chinese expressions of anger were
authentically grass-roots. Using the LDA model, we can see Chinese netizens were fully aware of the
incidents, and the anger from the Chinese emerged from the bottom-up in direct response to real-
world events and was not part of a public relations campaign orchestrated from Beijing.

Table 3.1. Topics of Posts on Weibo with Key Words' Diaoyu Island'
from August 13 to August 19 (N = 31339)
Topic 1
Issue
Awareness
中国
(China)
钓鱼岛
(Diaoyu
Island)
日本(Japan) 豺狼(Jackal)
解决
(resolve)
祖国
(Fatherland
)
Topic 2
Boycott and
Patriotism
保卫
(Protect)
怒(anger) 爱国(Patriot)
抵制
(Boycott)
日货
(Japanese
Products)
英雄
(Hero)
Topic 3
Japan Arrest
Chinese
Activists
日本
(Japan)
钓鱼岛
(Diaoyu
Island)
政府
(Governmen)
抓(Arrest)
支持
(Support)
民间
(People)
Topic 6
Event
Awareness
保钓
(Protect
DYI)
人士
(People)
香港(HK)
名
(Personal)
登岛(Get
on Island)
日方
(Japanese
side
Topic 7 Protest
抗议
(Protest)
钓鱼岛
(Diaoyu
Island)
组织
(Organization
)
北京
(Beijing)

海域(Seas)
Topic 8
Diaoyu Island
is China's
territory
钓鱼岛
(Diaoyu
Island)
中国
(China)
领土
(Territory)
主权
(Sovereignty
)
日方
(Japanese
side
交涉
(Negotiate)

3.3 Allowed Boycott
In 2012, the popular boycott of Japanese consumer goods was congruent with the state's
effort to deploy China's economic might for diplomatic advantage. In recent years, China has been
flexing its economic muscle more frequently and in a broader range of issues, often backed up by
71
nationalist sentiments at home (Reilly 2012).
130

The 2012 consumer boycott, coupled with Beijing's
more assertive economic statecraft, represents a potent extension of the public's role in Chinese
foreign policy. In 2012, the consumer boycott began on September 18, just as the street
demonstrations were ending. Consumers declined to buy Japanese-brand consumer goods,
particularly electronics and cars, and began canceling visits to Japan.
The online debates were vigorous, with some commentators insisting that not buying
Japanese cars mostly hurts Chinese workers and so hurts both countries. Others retorted that buying
a Chinese-brand vehicle instead of a Japanese one would help Chinese workers while serving the
political goal.
131

During the escalation of the Sino-Japanese conflict, Chinese nationalists were
outraged. “I suggest everyone boycott Japanese goods”, one netizen wrote on Sina.com. “Otherwise,
all the money we spend on Japanese goods will be used to buy bullets.”
132
Controversial
philanthropist Chen Guangbiao offered his support by replacing Japanese cars damaged during the
protests with domestically produced Geely sedans.
133

One posting insisted that China's economic
reliance upon Japan is nowhere near as high as Japan's dependence upon China, and therefore China
can and should use its purchasing leverage to press Japan on the islands issue. Unlike the 2005
campaign, dominated by online petitions and public demonstrations, the 2012 effort was primarily
individual-based. As one blogger put it: 'the boycott of Japanese goods begins with me' (dizhi rihuo,
congwo zuoqi).
134

Even though some Chinese scholars criticized the boycott as 'irrational', pointing out that the

130
James Reilly, “China's unilateral sanctions,” The Washington Quarterly 35(4), Fall (2012), pp. 121–133.
131
'Dizhi rihuo jiaodong dongya shushinian' [‘Boycott Japanese goods, agitate East Asia for a decade'], Renmin Wang,
(September 18, 2012), available at: http://news.163.com/12/0918/15/8BMNF9GP00014JB6.html.
132
See Weiss 2014.
133
“Chinese philanthropist replaces damaged Japan-made cars,” Cai-jing, last modified: October 11, 2012 http://
english.caijing.com.cn/2012-10-11/112182972.html.
134
See Weiss 2014.
72
actions also harmed China's own economy,
135

more Chinese experts supported the boycott. Zhou
Yongsheng, a professor at Foreign Affairs University, urged Chinese consumers to 'use the market
economy as a tool' to advance Chinese interests.
136
Others called for the boycott to target companies
that support Japanese right-wing groups.
137

Feng Wei, from Fudan University, insisted that China
should use economic measures to 'push Japan back to the negotiating table'.
138

More explicitly, Jin
Baisong, a researcher from a Ministry of Commerce think-tank, insisted: 'It's clear that China can
deal a heavy blow to the Japanese economy without hurting itself too much by resorting to sanctions'.
Cars
Japanese companies soon began to feel the combined effects of consumer boycott and
official pressure. During the protests, most Japanese manufacturers in China shut down their
factories. As anti-Japanese sentiment flared over the territorial dispute during September 2012, sales
of Japanese vehicles nosedived in China. Toyota claimed that sales of new cars in China were almost
cut in half to 44,100 vehicles in September compared to the previous year. Another major car
producer from Japan, Honda, experienced a sales decline of 40.5 percent. China sales for Nissan
also plunged 35 percent from last month to 76,100 vehicles. Mitsubishi reported that China sales
sank 63 percent to 2,340 vehicles, while Mazda’s sales in China sank 36 percent to 13,258 vehicles
for the month. A Japanese car executive also said that the tensions were affecting business with China,

135
Ibid.
136
'Boycott Japanese goods, agitate East Asia for a decade', Renmin Wang.
137
See Weiss 2014.
89H3QJ4A00253B0H.html.
138
Wang Chenyan, “Japan anniversary events postponed,” China Daily, last modified September 24, 2012, available at:
http://www.chinadaily.com.cn/china/2012-09/24/content_15776399.htm.
73
threatening the booming business relationship between Japan and its biggest export market (See
Figure 3.6)
139

Figure 3.6 Japanese Cars Sales in China
Comparing with Korean and Western Cars companies.

Cameras
Japanese electronics also became the targets of Chinese boycott, and famous Japanese
brands, such as Nikon and Canon were the victims. For instance, it was reported that Nikon had
declined sales in China, and the issue is severe enough that Nikon revealed it in their Q&A session
for the Q2 financial results of the Imaging Division.
140
A manager from another major camera
producer, Canon, also mentioned their products were boycotted by Chinese consumers, and sale
numbers decreased. Moreover, the boycott also put pressure on Chinese citizens who did not
participate. Canon Chief Financial Officer Toshizo Tanaka told reporters that, “… the boycotting

139
Ben Blanchard and Xiaoyi Shao. “China says tensions with Japan likely to hurt trade.” Reuters, last modified
September 12, 2012 https://www.reuters.com/article/us-china-japan/china-says-tensions-with-japan-likely-to-hurt-trade-
idUSBRE88C04620120913
140
“Q&A of Financial Results for the Second Quarter of the Year Ending,” Nikon.com, last modified March 31, 2013,
https://www.nikon.com/about/ir/ir_library/result/qa/2013_2q/index.htm
74
of Japanese products is now taking hold in Chinese society, where people who buy Japanese goods
are criticized.” Photographers in the protest also camouflage their cameras with Chinese national
flags and taps, as Japan is the motherland of most major digital camera companies, while China does
not have much of a role in this industry besides manufacturing the cameras at the request of those
corporations.
141

Tourism
The number of Chinese visitors to Japan dropped dramatically after the Japanese
government nationalized the Senkaku Islands on September 11, 2012. The move by Japan agitated
anti-Japanese sentiment in China, serving to deter Chinese from visiting their neighbor to the east.
According to figures from the Japan National Tourism Organization, October 2012 saw the number
of tourists from China shrink to 69,713 from 121,673 the previous month, nosediving by nearly half.
Overall figures for 2012 plummeted by 34.3 percent from the previous year (See Figure 3.7).
Moreover, All Nippon Airways (ANA) announced that 43,000 seats had been canceled for flights
from September through to the end of November, the majority from China to Japan. Xinhua
reported that over 100,000 Chinese citizens canceled trips to Japan and that tour groups to Japan
had plunged by 40 percent (Figure 3.7).
142
This trend of Chinese tourism to Japan extended into
2013 and continued for a total of 11 months. It was not until nearly a year after the tumult over the
Senkaku/Diaoyu Islands began, that active anti-Japanese sentiment in China cooled to a point where
tourists began returning.
143

141
Michael Zhang, “How Chinese Photogs Are Camouflaging Their Japanese DSLRs During Protests,” last modified
October 3, 2012 https://petapixel.com/2012/10/03/how-chinese-photogs-are-camouflaging-their-japanese-dslrs-during-
protests/
142
“Island stand-off hits Japan business,” Associated Press, last modified October 9, 2012 http://bigstory.ap.org/
article/news-summary-island-standoff-hits-japan-business.
143
“Chinese Tourists in Japan: Return of the Big Spenders,” Nippon.com, last modified August 29, 2014
https://www.nippon.com/en/features/h00070/
75

Figure 3.7 Chinese Tourists Visiting Japan (Comparing with Korean and Taiwanese Tourists)

Others
Japan's Fast Retailing Co. and Aeon Co. shuttered stores in China, the world’s second-biggest
economy, as a territorial dispute and the anniversary of the Japanese invasion prompted thousands
to protest in Beijing, Shanghai and other cities. Fast Retailing shut down 42 of its Uniqlo stores in
China, its second-largest market by outlets. Meanwhile, Japanese retail stores, Aeon closed 30 of the
35 stores it has in the provinces of Guangdong and Shandong.
144

3.4. Other Economic Statecrafts
Even though they popular boycotts and protests, the Chinese government did not use formal

144
“Uniqlo, Aeon Shut China Stores as Island Spat Escalates,” Bloomberg, last modified September 18, 2012
https://www.bloomberg.com/news/articles/2012-09-17/china-japan-dispute-over-islands-risks-340-billion-trade
76
coercive economic measures after the 2012 Japanese purchase of the disputed Senkaku/Diaoyu
islands. In response to this event, China spurred widespread boycotts that caused targeted Japanese
companies such as Panasonic to suffer about $120 million in property damage and Japanese
carmakers including Toyota decline in sales. Beijing has a more “oblique” response compared with
2010. China refrained from using coercive economic measures like rare earth restrictions against
Japan in 2010, despite periods of escalated territorial tensions. Scholars' interviews with Japanese
officials and experts confirm that China did not appear to apply more direct coercive economic
measures, such as restrictions on Japanese corporate operations in China.
145
Instead, the Chinese
government only implicitly supported consumer boycott. As the boycott grew stronger, the
spokesman for China's Commerce Ministry offered implicit support because such boycotts were
regarded as ‘patriotic activities’.
146
Japanese companies had to handle the effects of the consumer
boycott but not pressure from other economic statecrafts.
Conclusion
In this chapter, we could see the Chinese government monitored boycotts from a distance, managing
the nationalist sentiment from the media, even though they did not incite boycotts directly. The
events that transpired in the Sino-Japanese crisis substantiate the Orienting Hypotheses 1 in Chapter
II which states: the state allows the public to boycott when pre-crisis public opinion on the dispute is
active and the state prefers a hardline policy (Box I in Table 2.2).
The Chinese state media might not trigger boycotts, but the Chinese government apparently

145
See Harrell et al, “China's Use of Coercive Economic Measures,” Center for New American Security, last modified
June 11, 2018 https://www.cnas.org/publications/reports/chinas-use-of-coercive-economic-measures
146
See James Reilly, “A Wave to Worry About? Public Opinion, Foreign Policy, and China's Anti-Japan Protests”,
Journal of Contemporary China Volume 23, Issue 86 (2014): 197-215.
77
permitted boycotts. China showed its resolve and signaled that the Chinese government would not
quietly accept what it considered a unilateral change to the status quo and a challenge to Chinese
sovereignty by allowing boycotts and street protest (Weiss 2014). Even though actions of boycotts
also harmed China’s own economy, this was a testament that the Chinese were willing to sacrifice
their own economic interest to put pressure on their target country to cooperate. Moreover, the
Chinese government also took the risk to deter foreign investment into China, undermining
domestic manufacturing and tarnishing Beijing's global image.
147
Japan’s investment in China was
down 32 percent in October 2012, as compared to October 2011. In general, Chinese leaders and
consumers appeared to be ready to pay the price, generating economic shocks to the Japanese
government and businesspeople.

147
Keiko Yoshioka, “China's economy could lose big-time if Japan firms suffer from isles row,” Asahi Shinbum, last
modified September 25, 2012 http://ajw.asahi.com/article/asia/china/AJ201209250103.
78
Chapter IV Stifled Boycotts: China-Philippines Maritime
Disputes

Introduction
This chapter examines how China reacted to the maritime disputes in 2016. In July 2016, the
judgment by an international tribunal in “The Hague” came down overwhelmingly in favor of claims
by the Philippines, and rejected Beijing’s claims in the South China Sea. Chinese citizens began to
call for boycotting Filipino fruits and American products such as Apple’s iPhone and KFC.
In contrary to the previous chapter’s finding that the Chinese government allowed popular
boycotts against Japan, the Chinese government signaled its people not to go against Philippines’
fruits and American companies. The chapter in the case substantiates Box II in Table 2.2, showing
how the state launched a propaganda campaign to discourage boycotts when public opinion on the
issue was strong ex-ante, and intended to boycott. Yet the state prefers a moderate policy. Even
though Chinese state media first condemned the ruling of The United Nations Dispute Tribunal
(UNDT), the criticism faded out quickly from state media few days after the event. The Chinese
government successfully inhibited boycott event. As we would see in this chapter, there is no
evidence that private sectors from Philippines or the United States suffered losses from anti-foreign
boycotts. In this case, we can see the Chinese government wanted to synchronize the public opinion
and state policy intent, restraining people from boycotting against the Philippines and the United
States. Chinese government successfully toned down propaganda campaigns to foreign counterparts,
and tuning public opinion according to foreign policy goal.
79
The chapter proceeds in four parts. First, it presents the event of dispute of the South China
Sea. Second, this section examined how the Chinese government restrained itself from propaganda
against the Philippines and the United States. Third, it shows that there was no evidence that Chinese
boycotted the Philippines or the US. Lastly, it displayed that China also refrained from enforcing
other economic statecrafts and was ready to negotiate with the Philippines’ new administration.
4.1. Events: China-Philippines Maritime Disputes
In 2012, China and the Philippines found themselves locked in a dangerous naval standoff over the
shoal. The Scarborough Shoal in South China Sea is claimed by both China and the Philippines.
On April 8, 2012, a Philippine Navy surveillance plane spotted eight Chinese fishing boats in the
waters of Scarborough shoal. The Philippine Navy prompted to deploy its largest warship, the BRP
Gregorio del Pilar, to survey the vicinity of the shoal. After confirming the presence of the fishing
vessels and their ongoing activities, the Philippine Navy went to inspect the catch of the Chinese
fishing vessels. The Philippine inspection team claimed to discover illegally collected corals, giant
clams, and live sharks inside the first vessel boarded by the team. The Philippine Navy attempted
to arrest the Chinese fishermen, but the Chinese maritime surveillance ship blocked them. In
response, Beijing dispatched an armada of coastguard vessels to rescue the Chinese fisherman.
148

Since then, tensions have continued between the two countries.
149

148
Richard Heydarian, “How the Scarborough Shoal came back to haunt China-Philippines relations,” South China
Morning Post, last modified June 23, 2018 https://www.scmp.com/news/china/diplomacy-
defence/article/2151923/how-scarborough-shoal-came-back-haunt-china-philippines
149
“Shoal mates,” Economist, last modified April 28, 2012,
https://www.economist.com/node/21553474
“The South China Sea Courting trouble,” Economist, last modified July 16, 2016,
https://www.economist.com/news/china/21702069-region-and-america-will-now-anxiously-await-chinas-response-un-
appointed-tribunal
“South China Sea: Chinese Social Media Urges Mango Boycott,” BBC, last modified July 13, 2016,
http://www.bbc.com/news/world-asia-china-36780967
80
For years, China has sought to assert vast and ambiguous territorial claims in the South China
Sea by expelling its neighbors’ forces, fortifying its navy and building up artificial islands. Despite
asserting its claims to territory in the South China Sea, China actually refrained itself from
confronting other claimants, given that some of China's neighbors had ties with America's military.
150

Nonetheless, Chinese ships have been impeding Filipino fishermen from pursuing their trade near
Scarborough Shoal ever since Philippine naval inspectors tried to capture some Chinese fishermen
for illegally harvesting endangered species.
151

On April 16, 2012, the Chinese embassy in Manila also accused the boat of intrusion.
Meanwhile, the Chinese Foreign Ministry pressed a Philippine archaeological boat to leave the
waters of the Scarborough Shoal, claiming the waters were an "integral part of its territory.
152
On May
7
th
, China's Vice Foreign Minister Fu Ying summoned a Philippine diplomat for the third time in
this standoff and delivered a warning stating that China had "made all preparations to respond to any
escalation of the situation by the Philippine side".
153
The Philippines and China tried to ease tensions
as both nations had enforced fishing bans and had pulled out their vessels from the disputed waters
considering the arrival of the typhoon season by mid-June 2012.
154

150
“Courting trouble,” Economist, last modified July 16, 2016 https://www.economist.com/china/2016/07/16/courting-
trouble
151
“The South China Sea: Duterte waters,” Economist, last modified November 5
th
, 2016,
https://www.economist.com/node/21709592/all-comments?page=3
152
“China urges Philippine archaeological vessel to leave Huangyan Island,” Xinhua, last modified, April 6, 2012
http://www.china.org.cn/world/2012-04/16/content_25159436.htm
153
Damian Grammaticas, “China bangs the war drum over South China Sea,” BBC, last modified May 10, 2012
https://www.bbc.com/news/world-asia-china-18016901
154
Jane Perlez, "Philippines and China Ease Tensions in Rift at Sea," The New York Times, last modified June
22, 2012 https://www.nytimes.com/2012/06/19/world/asia/beijing-and-manila-ease-tensions-in-south-china-sea.html
Shirley Escalante, “Philippines Imposes Fishing Ban in Disputed Waters,” ABC (Radio Australia), last modified May
16, 2012 https://archive.is/20120731025852/http://abcasiapacificnews.com/stories/201205/3502621.htm?mobile
81
However, China became more assertive on this territorial issue in the second half of 2012.
In July 2012, China had blocked Philippine ships and fishing vessels from the lagoon of the disputed
Panatag (Scarborough) Shoal in the West Philippine Sea by setting up barriers to its entry point
155

while vessels belonging to Beijing's China Marine Surveillance and Fisheries Law Enforcement
Command were observed nearby the disputed shoal.
156
In addition, in December 2012, Chinese
government ships were seen turning away Philippine vessels, which clearly violated the mutual
agreement to pull out their ships in June 2012.
157

Moreover, the Chinese government also established a Sansha military garrison for the
disputed South China Sea.
158
This move was criticized by the Philippines and Vietnam.
159
Even the
U.S. State Department said that China’s establishment of a military garrison for the area runs
“counter to collaborative diplomatic efforts to resolve differences and risk further escalating tensions
in the region,” which was responded by China by calling in a senior US diplomat and reiterating
their "absolute sovereignty" over the region.
160
Additionally, China has stated it would interdict and
board any foreign vessel that entered waters it claimed.
161
China later explained that their interdiction

155
“DFA: China boats blocking PHL vessels from Panatag Shoal,” GMA News Online, last modified July 18, 2012.
https://www.gmanetwork.com/news/news/nation/265889/dfa-china-boats-blocking-phl-vessels-from-panatag-shoal/story/
156
Fat Reyes, “3 Chinese government vessels spotted at Scarborough Shoal — DFA,” last modified July 27, 2012
https://globalnation.inquirer.net/45761/3-chinese-government-vessels-spotted-at-scarborough-shoal-dfa
157
“3 Chinese ships seen in Scarborough – PCG,” ABS-CBN News, last modified September 12, 2012,
https://news.abs-cbn.com/nation/regions/09/12/12/3-chinese-ships-seen-scarborough-pcg
“Philippines insists Chinese ships must go; historical claim,” Business World Online, last modified November 30,
2012 http://www.bworldonline.com/content.php?section=Nation&title=Philippines-insists-Chinese-ships-must-go;-
historical-claim-cited&id=62242
158
“China to formally garrison disputed South China Sea;” Reuters, last modified July 22, 2012,
https://www.reuters.com/article/us-china-sea/china-to-formally-garrison-disputed-south-china-sea-
idUSBRE86L08B20120722
159
“Philippines Slams China's Establishment of Sansha City in South China Sea,” VOA News, last modified July 23,
2012, https://www.globalsecurity.org/military/library/news/2012/07/mil-120723-voa06.htm
160
Ben Blanchard, “China calls in U.S. diplomat over South China Sea,” Reuters, last modified August 4, 2012
https://www.reuters.com/article/us-china-usa-southchinasea/china-calls-in-u-s-diplomat-over-south-china-sea-
idUSBRE87401120120805
161
“China’s 'new rule' in South China Sea is threat to all countries — DFA,” GMA News Online, last modified
December 1, 2012 https://www.gmanetwork.com/news/news/nation/284596/china-s-new-rule-in-south-china-sea-is-
threat-to-all-countries-dfa/story/
82
and boarding would only be limited to vessels within 12 nautical miles for which China had
announced baselines.
162
The following year, after Manila had exhausted "almost all political and
diplomatic avenues" to resolve the maritime dispute with Beijing, Philippines challenged Chinese
territorial claims in the South China Sea at a UN tribunal.
163

After Manila first initiated the case, China decided not to participate in the arbitration.
Beijing’s nine-dash line claim predates the UNCLOS, and in many aspects was not compatible with
the UNCLOS clauses. The chance of losing the case was high. The observers such as Greg Poling
predicted in February 2016 that “the judges will almost certainly rule that China’s nine-dash line is
not a valid maritime claim and that China is not entitled to any historic rights beyond the regime of
territorial seas, exclusive economic zones, and continental shelves laid out in the United Nations
Convention on the Law of the Sea (UNCLOS).”
164
Furthermore, the nine dashes were not well
defined, and Beijing had intentionally left it unclear. China hoped ambiguity would assist the
Chinese to maintain the status quo by not losing any inch of its ancestoral land.
In July 2016, the Permanent Court of Arbitration had ruled against Chinese claims saying
that there was no evidence that China had historically exercised exclusive control over the waters or
resources. The tribunal in “The Hague” also contended that China had violated the Philippines'
sovereign rights.
165
The tribunal decided that China doesn't have the right to resources within its
"nine-dash line," which covers 90percent of the disputed waters. Even though an international

162
Jeremy Page, “China Sheds Light on New Sea Rules,” Wall Street Journal, last modified December 5, 2012,
https://www.wsj.com/articles/SB10001424127887323717004578158992804807854
163
“Philippines 'to take South China Sea row to court',” BBC, last modified January 22, 2013
http://www.bbc.com/news/world-asia-21137144
164
Gregory B. Poling, “A Tumultuous 2016 in the South China Sea,” CSIS Commentary, last modified February 18,
2016, https://www.csis.org/analysis/tumultuous-2016-south-china-sea
165
“South China Sea: Tribunal backs case against China brought by Philippines,” BBC, last modified July 12, 2016
https://www.bbc.com/news/world-asia-china-36771749
83
tribunal had declared China’s “historic claims” in the South China Sea invalid, China refused to take
any part in the court’s proceedings and said it would not “accept, recognize or execute” the verdict.
Chinese President Xi Jinping ( 习近平) rejected the award, which had lasting implications for the
resource-rich hot spot with $5.3 trillion worth of goods transiting through it annually. "China will
never accept any claim or action based on those awards," Xi said. China had boycotted the
proceedings. China's Ambassador to the United States, Cui Tiankai ( 崔天凯), accused the tribunal
of "professional incompetence" and "questionable integrity." Speaking at the Center for Strategic and
International Studies in Washington, he accused the United States of engaging in military exercises
that constituted "military coercion." As a member of UNCLOS, China is supposed to obey the court,
but there is no enforcement mechanism.
Since Rodrigo Duterte replaced Mr. Aquino as president, the Philippines had changed its
course abruptly and the relations with Beijing turned warm. Strong evidence affirmed China’s
preference for a moderate policy (further details will be shown in section 4.3.). After years of
escalating tension, President Duterte and Xi Jinping, agreed on Oct 20, 2016 to resume direct talks
on disputes in the South China Sea.
166
Duterte had announced an end to joint Philippine-American
military exercises and threatened to abrogate the 2014 Enhanced Defense Cooperation Agreement
(EDCA), which provided U.S. forces access to five Philippine military bases.
167
On a state visit to
China in 2016, he announced his “separation” from America. Following this display of fealty, China
ended its blockade of Scarborough, promising the Philippines with billions of dollars in loans and

166
Jane Perlez,“Rodrigo Duterte and Xi Jinping Agree to Reopen South China Sea Talks,” The New York Times, last
modified October 20, 2016 https://www.nytimes.com/2016/10/21/world/asia/rodrigo-duterte-philippines-china-xi-
jinping.html
167
Renato Cruz De Castro, “President Duterte’s Backtracking Prompts Hope for Compromise,” CSIS, last modified
December 1, 2016. https://amti.csis.org/dutertes-backtracking-prompts-hope/
84
investment. The message for China’s neighbor with competing claims in the South China Sea is
crystal clear: accept China’s sovereignty and riches will follow.

4.2. Manipulation from Chinese Government: Contained Nationalism
The Chinese citizens paid attention to the verdict (Figure 4.1) and overwhelmingly expressed their
patriotic sentiments as well as support for the government claim. One image reportedly originated
from state media outlet People's Daily, shared more than 400,000 times on Weibo. It repeated the
government's official line on the tribunal, saying: "won't accept, won't participate, won't recognize."
168

The 50,000 comments on the Weibo post were generally positive, with users voicing their support
for the Chinese government actions, leaving criticism about the Philippines and Filipinos. Another
Weibo post with slogan shared on also revealed the patriotism in China, stating “China: we can’t
lose even one single dot (# 中国一点也不能少#).” It had also attracted more than 1 million retweets
and hundreds of thousands of supporters among Weibo users, and its hashtag has totted up more
than 3.7 billion shares.
169
Several Chinese celebrities retweeted the People’s Daily image on Weibo,
including China’s highest-paid movie star Fan Bingbing( 范冰冰 ), who showed up in several
Hollywood blockbusters like X-men and Iron Man.
170

168
“South China Sea: Chinese social media urges mango boycott,” BBC, last modified July 13, 2016
https://www.bbc.com/news/world-asia-china-36780967
169
Jing Chen, “Why China won’t back off the South China Sea – whatever the world might say,” last modified July 13,
2016 https://theconversation.com/why-china-wont-back-off-the-south-china-sea-whatever-the-world-might-say-62248
170
“qun xing fa sheng kang yi nan hai zhong cai ：zhong guo yi dian dou bu neng shao 群星发声抗议南海仲裁：中
国一点都不能少！[Stars protested Attribution of South China Sea: China can’t lose even one single dot]” guang ming
wang 光明网, last modified November 18, 2018 http://www.twoeggz.com/news/12238675.html
85

Figure 4.1 Baidu Search Counts in Terms of Key Word “Ruling
of South China Sea ( 南海仲裁)” in 2012
Source:
https://index.baidu.com/v2/main/index.html#/trend/percentE9percent92percent93percentE9percentB1percentBCper
centE5percentB2percent9B?words=percentE9percent92percent93percentE9percentB1percentBCpercentE5percentB
2percent9B,percentE8percent9Dpercent99percentE8percent9DpercentA0percentE4percentBEpercentA0,percentE5
percentA4percent8DpercentE4percentBBpercent87percentE8percent80percent85percentE8percent81percent94perc
entE7percent9Bpercent9F

China’s social media also began to call for boycotting bananas from Philippines. Additionally,
many in China accused the United States of being behind the Philippines’ appeal to the tribunal as
well as behind the ruling itself. Demonstrators gathered in front of US fast food chain KFC
restaurants in several Chinese cities. Some protesters also shout for anti-American boycotts,
smashed iPhones, and tried to drum up nationwide support via social media. But the last thing
Beijing wants are public demonstrations.
171

171
“My nationalism, and don’t you forget it,” Economist, last modified July 23, 2016,
https://www.economist.com/china/2016/07/23/my-nationalism-and-dont-you-forget-it
86

Figure 4.2. Weibo Post from People’s Dialy
“China: We can’t Lose even One Single Dot (# 中国一点也不能少#)”

The success of this strategy was limited, and instead it provoked a considerable backlash
against “irrational patriotism” ( 不理智爱国主义). The boycotters’ demands were spread across and
discussed in all analyzed forums. The boycott calls led to increasingly intense debate in all analyzed
forums, eventually causing top-level party-state media outlets (Xinhua and People’s Daily) to
intervene by warning protesters against illegal behavior and urging “rational patriotism.” This
illustrates the continued potential of online forums to provide netizens with a certain bottom-up
agenda-setting power.
In 2012, Beijing allowed hawkish voices and nationalistic commentators warning military
action against the Philippines. Luo Yuan, one of the well-known hardline Chinese army generals,
wrote that, China had to take ‘decisive action’ including ‘war at all costs,’ as to display its resolve to
safeguard its sovereignty and security. He also urged Beijing to reinforce its claim on the disputed
87
Scarborough Shoal. According to Lou, the Philippines clearly violated China’s sovereignty over the
Huangyan Island by forcing an inspection of a Chinese fishing vessel. The Chinese government
should let both the Philippines and any potential future provocateurs understand that such actions
will not be tolerated.
172

While his comments might not represent official policy, war talk became
popular in China’s media coverage of the standoff. Taking the uncompromised position to express
hyper-nationalist positions, the Global Times, best known for its provocative editorials and
commentaries, published an editorial on 26 October 2011, warning the countries disputing China’s
maritime claims to be prepared for the sound of cannons if they did not want to change their ways
with China.
173

The beat of the war drums was unusually strong as the Chinese saw the Philippines as
so weak that they could not punch back.
However, in 2016 the official party-state media Xinhua and People’s Daily tried to calm
down the debate by stating that, “torturing oneself is not loving the country ( 折腾自己不是爱国).”
Xinhua criticized those who call for smashing iPhone as irrational patriotism, comparing those
people as those mobs who destroyed Japanese cars during 2012 Sino-Japanese territorial conflicts.

172
‘Maj. Gen Luo: China won’t “abandon” war option’, China.org.cn, last modified May 10, 2012 http://www.
china.org.cn/opinion/2012-05/10/content_25350539.htm.
173
“Editorial: Don’t take peaceful approach for granted’, Global Times, last modified October 25, 2011 http://
www.globaltimes.cn/NEWS/tabid/99/ID/680694/Dont-take-peaceful-approach-for-granted.aspx.
88

Figure 4.3 Sentiment Analysis of
Foreign Ministry Spokesmen’s Remarks on South China Sea and Philippines

People’s Daily also claimed that boycotts are a ‘silly way of patriotism ( 糊涂的爱国)’
174
In addition,
the usually outspoken editor-in-chief of the Party-approved nationalist newspaper Global Times, Hu
Xijin, chose to diminish the relevance of the boycotts by stating that he “bought KFC today because
this has nothing to do with patriotism.”
175
Moreover, Chinese authorities tried to censor all online
mention of the ruling of South China Sea. The WeiboScope, an index measuring censorship on
Sina Weibo in Mainland China from University of Hong Kong, showed that the keywords related

174
Tang jia chen 汤嘉琛 “Ren min wang ping: jing ti ji duan yan hang rang ai guo meng wu, 人民网评：警惕极端言
行让爱国蒙污[People.cn Review: Be wary of extreme words and deeds making patriotism shameful] ” Peopl.cn, last
modified July 21, 2016 http://opinion.people.com.cn/n1/2016/0721/c1003-28574263.html
“ren min wang ping ：jing ti ji duan yan hang rang ai guo meng wu
175
Suisheng Zhao, “Foreign Policy Implications of Chinese Nationalism Revisited: The Strident Turn,” Journal of
Contemporary China, July (2013): 535–553; and Robert S. Ross, “Chinese Nationalism and Its Discontents,” National
Interest, November/December (2011): pp. 45–51
89
to the event, such as South China Sea, Philippines, Tribunal, as well as KFC, were censored by the
Chinese government a few days after the ruling of South China Sea came out.
176

Figure 4.4 Sentiment Analysis of
News Related to South China Sea and Philippines from People’s Daily

4.3. Restrained Economic Nationalism
China also restrained itself from other measures of economic coercion. Western media widely
reported that authorities in Beijing imposed tighter measures on agricultural imports from the
Philippines, in particular on bananas, in 2012.
177
Nonetheless, the trade data does not support the

176
“HKU JMSC Weibo Censorship Index,” Journalism and Media Studies Center, last modified June 6, 2019
http://weiboscope.jmsc.hku.hk/

177
Andrew Higgins, “In Philippines, banana growers feel effect of South China Sea dispute,” Washington Post, last
modified June 11, 2012 http://www.washingtonpost.com/world/asia_pacific/in-philippines-banana-growers- feel-effect-
of-south-china-sea-dispute/2012/06/10/gJQA47WVTV_story.html?wpisrc1⁄4 nl_headlines_Mon.
90
news (See Figure 4.5). Bananas are the Philippines’ second largest agricultural export, with China
accounting for about a quarter of all bananas exported by the Philippines in 2011. Chinese
quarantine authorities were reported to have imposed restrictions on banana imports from the
Philippines in 2012, citing health concerns as the official reason. The news said that the sudden
Chinese restrictions on banana imports were ‘a big disaster’ for the growers, and ‘the common
knowledge that it was in retaliation for the flare-up in contested waters.’
178
Nevertheless, after
examining the trade data, one cannot confirm that China sanctioned bananas from Philippines in
either in 2012 or 2016. It seems that even though China talked tough to the Philippines, it didn't
implement any economic coercion toward Philippines on agricultural products (Figure 4.5).
Furthermore, neither is there any evidence that the Sino-American economic relations were
affected by ruling of UN tribunal in 2016. Despite some Chinese netizens appealing to boycott
American products, trade numbers between the two nations provided no proof for boycotts. For
instance, after the ruling, American car sales number did not drop in contrast with cars from other
countries and showed no signs of being boycotted. After state media discouraged boycotts against
American products, there was no further evidence that American or Philippine products were targets
of Chinese economic coercion.
The only Philippine sector that suffered from Chinese economic coercion was Filipino
tourism industry during 2012. The tourism data in 2012 grew slower in contrast with other countries,
indicating a decline of Chinese tourist flow to the Philippines after the conflict in South China Sea.

Richard Javad Heydarian, ‘China splits Philippine politics’, Asia Times, last modified October 10, 2012
http://www.atimes.com/atimes/Southeast_Asia/NJ10Ae02.html.
178
Ibid, and Suisheng Zhao “Foreign Policy Implications of Chinese Nationalism Revisited: the strident turn,” Journal
of Contemporary, China Issue 82, Volume 22 (2013): 535-553

91
Chinese tour agencies were reported to cancel tour group trips to the Philippines allegedly due to
concerns for tourists’ safety. As the third-largest source of tourists for the Philippines, this action put
great economic pressure on the Philippine government. (Figure 4). Once relations between the
Philippines and China warmed up at the beginning of President Rodrigo Duterte’s administration,
Chinese visits to China had increased dramatically.

Figure 4.5 Chinese Tourists Visiting Philippines (Comparing with Japanese Tourists)

92
Figure 4.6. Monthly Banana Export from Philippines to China and the Japan
From Jan 2010 to Dec 2017
4.4. Economic Statecraft: Not Applying
In the final months before the tribunal ruled in favor of the Philippines, the gestures from Chinese
Ministry of Foreign Affairs indicated that China was fashioning a conciliatory South China Sea policy.
In Feng Zhang’s analysis, “This [Beijing’s] position of ignoring the award while seeking negotiation
with the Philippines is clear from two important documents the Chinese government released
immediately after the award: a statement about China territorial sovereignty and maritime rights in
the South China Sea and a white paper on settling the disputes with the Philippines through
negotiation. Both documents mention the so-called nine-dash line map only in passing. Instead, the
93
statement announces China’s readiness to make practical temporary arrangements with the
Philippines to reduce tension and seek cooperation.”
179

Indeed, despite of harsh rhetoric from the Chinese government, strong evidence affirms
Beijing’s preference for a moderate policy. Beijing from the very beginning “wanted the issue to go
away” (Wang 2018). In 2016, Philippine President-elect Rodrigo Duterte brought hope to the
Chinese policy makers. During the presidential election campaign, Duterte claimed to favor a non-
confrontational approach with China, maintaining that a non-confrontational, less formal approach
would be more effective in coming to an agreement.
180
Duterte had also asserted that the Philippines
should revert to the current status quo, arguing that it is beneficial for his nation to jointly explore
the disputed areas for resources such as oil, gas, and other minerals, along with other countries
including China.
181

Beijing was ready to make a fresh start. Beijing wasted no time to build up relations with the
new President-elect. Chinese President Xi Jinping sent a message to Rodrigo Duterte, congratulating
him on his election as President of Philippines.
182
This was a strong indicator Beijing was attempting
to de-escalate the issue and seek new diplomatic channels to settle the issue. Duterte mentioned that
it was his honor to have the congratulatory message from the Chinese President Xi Jinping and
continued to release positive signals to improve the relationship.
183
Xi reciprocated by expressing

179
“China’s Claims in the South China Sea Rejected,” ChinaFile, last modified July 12, 2016
http://www.chinafile.com/conversation/chinas-claims-south-china-sea-rejected
180
Trisca Macas “Duterte on sea dispute with China: I'm willing to fight, but let's talk first,” GMA News Online, last
modified November 30, 2015 https://www.gmanetwork.com/news/news/nation/546274/duterte-on-sea-dispute-with-
china-i-m-willing-to-fight-but-let-s-talk-first/story/
181
Alexander D. Lopez, “Bring ROTC back – Duterte,” Manila Bulletin, last modified, April 24, 2015
https://web.archive.org/web/20160327083050/http://www.mb.com.ph/bring-rotc-back-duterte/
182
“xi jin ping zhi dian zhu he du te er te dang xuan fei lu bin zong tong 习近平致电祝贺杜特尔特当选菲律宾总统
[Xi Jinping calls to congratulate Duterte on his election as President of the Philippines],” Xinhua, last modified May
30, 2016, http://www.xinhuanet.com//world/2016-05/30/c_1118958123.htm
183
Zhang quan 张全 “fei xin zong tong du te er te cheng zan xi jin ping ，cheng bu yi lai meng you mei guo 菲新总统
94
that he was “willing to work with Duterte to push for improvement of relations between their two
countries,” notably leaving out the ongoing arbitration.
After the tribunal released its ruling, Vice Foreign Minister Liu Zhenmin said at a July 13,
2016 press conference that “China had noted that the new Philippine government led by President
Duterte was positive about resuming dialogue with China and moving forward the bilateral
relationship from different aspects. We welcome that with our door widely open.”
184
Beijing also
refrained from punishing Manila.
On August 8 after the tribunal ruling, the Philippines sent former president Fidel V. Ramos
as a special envoy to Hong Kong as an “icebreaker” to renew friendship with the Chinese. Ramos
met with Fu Ying, Chairperson of the Foreign Affairs Committee of China’s National People’s
Congress and Wu Shicun, President of the National Institute for South China Sea Studies. They
issued a statement in their personal capacities, which focused on cooperation and dialogue and did
not mention the ruling. Ramos also expressed his government’s interest in engaging in formal
discussions to ease tensions with China. Ramos’ visit tested waters for the Chinese receptivity of a
new Philippine conciliatory position, and the subsequent visit by President Duterte proved that his
good will was reciprocated.
Conclusion
The case in this chapter aligns with Box II in Table 2.2: the state launches a propaganda campaign
to discourage boycotts when public opinion on the issue is strong ex-ante and intend to boycott, yet

杜特尔特称赞习近平，称不依赖盟友美国 [ppine President Duterte praised Xi Jinping, saying that he does not rely
on his allies the U.S.]” ,Shanghai Observer, last modified June 1, 2016 https://www.jfdaily.com/news/detail?id=19277
184
“Foreign Ministry Spokesperson Lu Kang's Regular Press Conference on July 14, 2016,” Consulate General of
China in Chicago, last modified July 14, 2016 http://www.chinaconsulatechicago.org/eng/fyrth/t1381622.htm
95
the state prefers a moderate policy. In this chapter, we can see that the Chinese government stopped
anti-foreign boycotts, as boycotts does not work well with Chinese foreign policy. On one hand, it is
a bit far-fetched to blame the U.S. for the ruling of Hague, since there is little connection between
U.S. and the UN tribunal. On the other hand, while new elected Filipino President Duerte showed
the potential to work with China, there is no reason for Chinese state to punish the Philippines with
boycott or other economic coercion. Thus, the Chinese government restricts people from boycotting
against Philippines and the United States and successfully adopts a propaganda campaign to tone
down public anger accord to its foreign policy goal.

96
Chapter V Boycott as an Economic Coercion: Sino-Korean
Diplomat Feud over THAAD Missile System

Introduction
This chapter investigates the case of Anti-Korea boycotts in China in 2016 and 2017. In this chapter,
we can see how the Chinese government mobilized boycotts. The decision to deploy a Terminal
High Altitude Area Defense (THAAD) anti-ballistic missile system in South Korea was most
upsetting to the Chinese more than any other nation. THAAD is a ground-based missile defense
system intended to destroy ballistic missiles when they are coming down. This chapter demonstrates
how the Chinese government enforced economic statecraft via boycotts from two approaches: first
by stirring anti-Korean sentiment and second by using other regulatory measures and policy tools.
First, the Chinese government used their state media to express the government’s displeasure
and ill will towards South Korea over the deployment of the missiles, triggering anti-Korea sentiment,
and leading Chinese citizens to boycott Korean products. It is incredible to see the speed with which
China's leaders can just switch on anti-Korea sentiment in this case. While tourists and travel
companies canceled trips to South Korea, Korean goods were removed from supermarket shelves.
Local competitors in China also directly encouraged boycotts. For instance, Chinese automakers
were offering benefits to customers who could show they had sold their existing South Korean
vehicles.
185

Second, the Chinese government also paired boycotts with some regulatory measures and
policy tools. After South Korean retail giant Lotte agreed to provide land to host a US missile defense

185
Seung-bum Kim and Seong-min Kim, “Chinese Boycott Takes Toll on Hyundai-Kia, Suppliers,” The Chosun Ilbo,
last modified July 29, 2017. http://english.chosun.com/site/data/html_dir/2017/07/04/2017070401462.html.

97
system, the majority of the Lotte Mart stores in China were closed due to “fire violations.” Moreover,
some businessmen also took advantage of these events to show their patriotism by cutting ties with
Lotte to win the applause from the general public and to promote their personal image. In general,
this case validates the orienting hypotheses 3 in Chapter 2: the state launches a propaganda campaign
to agitate or allow the public to boycott when pre-crisis public opinion on the dispute is weak ex-ante,
yet the state prefers a hardline policy (Box III in Table 2.2).
This chapter is structured in four parts. The first section presents the event of THAAD
disputes. The second section examines how the Chinese government and state media managed their
stance against South Korea. The third section analyzes how Chinese protested and boycotted against
Korean products, and the last section presents the Chinese government paired other coercive
economic measures popular boycotts.
5.1. Event: THAAD Deployment and Reaction from Beijing
On February 7 2016, North Korea fired a long-range missile. South Korea, Japan, and the US
condemned the launch, meanwhile requesting an emergency meeting of the UN Security Council.
As North Korea's missile testing has grown more complex and more concerning, South Korea and
the United States began official negotiations on the details of setting up a missile defense system in
South Korea.
186
North Korea launched a payload into orbit and appeared to be preparing for another
test of its Musudan medium-range missile. Since the first nuclear crisis with North Korea in 1994,
North Korea has deployed NoDong and Musudan medium- and intermediate-range missiles that
require a missile defense able to handle higher missile re-entry speeds like the THAAD system.
187

186
“North Korea fires long-range rocket despite warnings,” BBC, last modified February 7, 2016,
https://www.bbc.com/news/world-asia-35515207
187
“THAAD could destroy Seoul-Beijing relations: Chinese envoy,” Yonhop News, last modified February 23, 2016,
https://www.rand.org/blog/2017/08/why-thaad-is-needed-in-korea.html
98
Some of these North Korean missiles may well carry nuclear weapons because they could also cover
targets in Japan, Russia, and China. In the wake of North Korea’s nuclear test in January 2016 and
rocket launch a month later, South Korea and the US moved closer to deploying THAAD, a ground-
based missile defense system which is aimed to shoot down “short-, medium- and intermediate-range
ballistic missiles during the terminal phase (i.e., when they are coming down)”.
188

The decision of THAAD deployment sparked a backlash in China. In February 2016,
China’s ambassador to South Korea, Qiu Guohong ( 邱国洪) told Kim Jong-in, an interim chairman
of South Korea's main opposition Minjoo Party (MPK) at the National Assembly, "China vehemently
opposes the THAAD deployment." Moreover, Ambassador Qiu also warned the MPK that the
deployment of a U.S. missile defense system “could destroy bilateral relations in an instant," and that
“(ties) could take a long time to recover.”
189
China has persistently opposed to the deployment of
the THAAD on the Korean Peninsula for years, even though the US and South Korea had been
repetitively arguing that THAAD is a necessary means of protecting against the North Korean missile
threat, and it is a merely defensive system.
In appearance, Beijing's fury with THAAD was incomprehensible. For one thing, it was a
purely defensive system. The THAAD systems carry no warheads, depending on the force of the
“interceptor” to shoot down the incoming missile rather than a detonation. And while, in theory,
the system could be used to intercept Chinese ballistic missiles, it would function for missiles in their
terminal descending phase: ruling out those targeting the US, which would still be ascending. In
addition, even though China is a key ally and has a reputation as the “big brother” of North Korea,

188
Adam Taylor, “Why China is so mad about THAAD, a missile defense system aimed at deterring North Korea,”
March 7, 2017, https://www.washingtonpost.com/news/worldviews/wp/2017/03/07/why-china-is-so-mad-about-thaad-a-
missile-defense-system-aimed-at-deterring-north-korea/
189
See Yonhop News. February 23, 2016
99
China has shown itself to be frustrated by Pyongyang's missile launches. Beijing had the history to
block coal imports from North Korea, striking a major blow to the isolated nation's economy. China
has reportedly deployed an S-400 missile defense system, which is similar to THAAD, on the
Shandong Peninsula, between Pyongyang and Beijing.
190
It appears that China put it in place to
defend against North Korean missiles.
Nevertheless, China believes THAAD would also be used to monitor Chinese missile
deployments, posing threat to China’s national security. Many experts argue that China's anger over
THAAD has less to do with the missiles than with the sophisticated radar capabilities included in
the system. China was concerned that radar could penetrate deep into Chinese airspace, which gave
South Korea’s allies, such as the US, advantage in dealing with a Chinese missile launch.
191
The
United States could potentially take advantage of the radars to track China's own missile systems,
favoring South Korea in conflict with China. Some Chinese analysts indicated that the radar may be
the real reason for the deployment. As they contended, THAAD itself is of only limited use against
North Korea anyway, since it could not annihilate short-range missiles and artillery that do not reach
high altitudes. More broadly, Beijing is anxious about the potential alliance between the United
States, South Korea, and Japan to contain China in the future. “If South Korea insists on becoming
a US puppet, China will have to act against it.
192
”

190
Bruce W. Bennett, “Why THAAD Is Needed in Korea,” RAND, last modified, August 6, 2017,
https://www.rand.org/blog/2017/08/why-thaad-is-needed-in-korea.html
191
“THAAD To Officially Deploy to South Korea,” Economist. last modified August 12, 2016,
http://country.eiu.com/article.aspx?articleid=964494880&Country=Southpercent20Korea&topic=Politics_1
“Wang Yi Talks about US's Plan to Deploy THAAD Missile Defense System in ROK,” The Consulate General of
The People's Republic of China in Los Angeles, last modified February 13, 2016,
https://www.fmprc.gov.cn/ce/cgla/eng/topnews/t1340525.htm
192
“South Korea to antagonize China with THAAD.” Global Times, last modified July 17, 2017,
http://www.globaltimes.cn/content/1027538.shtml
100
China also gave South Korea dire warnings, arguing that this could escalate into a potential
arms race in the region.
193
The announcement of THAAD drew condemnations from the
governments of China and Russia. Russia's foreign ministry warned that the U.S. deployment will
have "irreparable consequences," and it will "undermine stability in the region."
194
Moreover, China's
government also objected to THAAD's powerful "X–band" radar. Chinese Foreign Minister Wang
Yi ( 王毅) argued that the coverage of the THAAD missile defense system “goes far beyond the
defense need of the Korean Peninsula… any justification to this cannot hold water.” And “We
[China] have every reason and right to question the real scheme behind this action.”
195
Despite this,
South Korea and the U.S. made a decision to deploy THAAD on July 8, 2016.
196

While hostility grew, China and South Korea held a summit in Hangzhou, eastern China,
with each party’s leaders Xi Jinping and Park Geun-Hye( 박근혜) to discuss the issue of THAAD
on Sept. 5, 2016. During the summit, former South Korea President Park reemphasized that the
THAAD deployment targeted against North Korea and China’s security interest is not a threat.
Chinese President Xi reiterated China’s firm stance against the deployment of THAAD stating that
it could “intensify disputes".
197
Nevertheless, the two countries still emphasized the long history of

193
Shannon Tiezzi, “China Warns THAAD Deployment Could Destroy South Korea Ties 'in an Instant'.” The
Diplomat, last modified February 2, 2016 https://thediplomat.com/2016/02/china-warns-thaad-deployment-could-
destroy-south-korea-ties-in-an-instant/
194
Liu Xin. “China slams SK-US THAAD decision,” Global Times, last modified July 9, 2016.
http://www.globaltimes.cn/content/993125.shtml
195
“Wang Yi Comments on Plan of the US to Deploy THAAD System in ROK,” Embassy of the People's Republic of
China in the Republic of the Philippines, last modified July 9, 2016. http://ph.china-
embassy.org/eng/chinew/t1379336.htm
” Wang Yi Talks about US's Plan to Deploy THAAD Missile Defense System in ROK,” The Consulate General of
The People's Republic of China in Los Angeles, last modified February 13, 2016,
https://www.fmprc.gov.cn/ce/cgla/eng/topnews/t1340525.htm
196
”U.S. to Deploy THAAD Missile Battery to South Korea,” DoD News, Defense Media Activity, last modified July
8, 2016 https://dod.defense.gov/News/Article/Article/831630/us-to-deploy-thaad-missile-battery-to-south-korea/
197
“Park, Xi reconfirm differences over THAAD, agree to strengthen communication” last modified
https://en.yna.co.kr/view/AEN20160905001956315
101
their relationship, and both sides decided that a stable and healthy bilateral relationship benefits both
nations. In the same month, the Chinese Defense Ministry also expressed that they “will follow
closely the deployment, and take necessary measures to safeguard China's strategic security and
regional strategic balance” against the THAAD.
198

For the next few months, the deployment of THAAD was postponed due to Choi Soon-sil
(최순실) scandal. Choi is a close friend of Former Korean President Park. Choi used her
presidential connections for corruption and unauthorized access to state documents.
199
The scandal
brought down President Park, and the president’s exit led to a delay of deployment.
200
Nonetheless,
the Korean government still managed to make the Lotte Group approve a land swap with the
government, which enabled authorities to deploy the missile defense system on Feb 28, 2017.
Meanwhile, the Lotte Group’s decision fueled anti-Korea and anti-Lotte sentiment among Chinese
citizens, causing huge backlash in China.
On March 7, 2017, the United States and South Korea started deploying the first elements
of its advanced anti-missile defense system after North Korea's test of four ballistic missiles, despite
strong outcry from China. The announcement came as North Korean state media reported that
leader Kim Jong–un had personally overseen missile launches by an army unit and that these missiles

198
” Defense Ministry's regular press conference on September 29,”China Military Online, last modified Sep 29, 2016
http://eng.mod.gov.cn/news/2016-09/29/content_4771590.htm
199
“South Korea's presidential scandal,” BBC, last modified April 6, 2018, https://www.bbc.com/news/world-asia-
37971085
200
“President Park’s exit may threaten THAAD,” CNBC. last modified November 29, 2016,
https://www.cnbc.com/2016/11/29/president-parks-exit-may-threaten-thaad.html
102
were aimed at US bases in Japan, escalating threats against Washington as US troops conduct joint
military exercises with South Korea.
201

5.2. Nationalism Unleashed
In early 2016, in the wake of North Korea’s nuclear test in January 2016 and rocket launch a month
later, South Korea and the United States moved closer to THAAD deployment.
202
This event created
some attention within Chinese communities for the first half of 2016. As it is shown in Figure 5.1
and Figure 5.2, after July 2016 Korean government announced the deployment of the THAAD
system, Chinese citizens began to pay attention to the event (See spike B and C in Figure 5.1, and
spike C and D in Figure 5.2). The Chinese government also began to enforce some economic
statecrafts against South Korea, as it is shown in section 5.4 in this chapter.

201
“US starts deploying advanced anti-missile system THAAD in South Korea after defiant North's latest test,” Reuters
News Agency, last modified March 7, 2017, https://www.telegraph.co.uk/news/2017/03/07/us-starts-deploying-anti-
missile-system-thaad-south-korea-defiant/
202
Adam Taylor. “Why china is so mad about THAAD a missile defense system aimed at deterring north Korea,”
Washington Post. last modified March 7, 2017.
https://www.washingtonpost.com/news/worldviews/wp/2017/03/07/why-china-is-so-mad-about-thaad-a-missile-defense-
system-aimed-at-deterring-north-korea/ According to Lockheed Martin, the U.S. company that manufacturers the
system, there are four stages to its operation. First, a radar system identifies the incoming threat; then the target is
identified and engaged. An “interceptor” is fired from a truck-mounted launcher, which destroys the missile using
kinetic energy. Because the incoming missile is destroyed at a high altitude, the effects of weapons of mass destruction
can be mitigated with the device.
103

Figure 5.1, 5.2 Baidu Search Counts in Terms of
Key Words “THAAD ( 萨德)” and “Korea( 韩国)”
Source:
http://index.baidu.com/v2/main/index.html#/trend/percentE8percent90percentA8percentE5percentBEpercentB7?wo
rds=percentE8percent90percentA8percentE5percentBEpercentB7
http://index.baidu.com/v2/main/index.html#/trend/percentE9percent9FpercentA9percentE5percent9BpercentBD?wo
rds=percentE9percent9FpercentA9percentE5percent9BpercentBD

Figure 5.3 Chinese Monthly News Related to ‘‘THAAD ( 萨德) or “Lotte ( 乐天)” on Baidu
Source: Baidu.cn
104

Chinese state media initiated the first round of propaganda against THAAD since the
decision of deployment is made (See 5.3). Chinese state media, including Xinhua and People’s Daily,
had been strict on South Korea on July 2016. We found that Chinese media, such as People’s Daily,
had been emphasizing that THAAD is against China’s interests (Topic 5 in Table 5.4) and implying
that THAAD deployment is a way for Americans to extend their power, which is against the interest
of China and Russia (Topic 9 in Table 5.4). Furthermore, People’s Daily had been intensively
covering the stories about South Koreans’ protests in Seongju County (성주군) (Topic 1 and Topic
10 in Table 5.4), and argued that Chinese media also discouraged Chinese citizens to visit South
Korea, which led to huge economic losses of duty-free shops in Korean airports and Jeju Island.
Table 5.1 Topics of News Related to “THAAD” in People’s Daily in 2016 and 2017 (N = 67)
203

Topic 1
THAAD
against
China’s
interest

萨德 (THAAD) 州郡
(Gin/
Korean
Province)
甜瓜
(Sweet
Melon)
居
民
(Reside
nt)
公
里
(KM) 美国 (U.S.)
Topic 4
Bring Costs
to Tourism
记者 (Reporter) 机场 (Airport) 时
(When/W
hile)
游
客
(Touris
ts)
包
装
(Packag
e)
登机 (Boarding)
Topic 5
backing up
by
American
部署
(Deploym
ent)
系统 (System) 中方
(Chinese
Side)
利
益
(Intere
st)
地
区
(Area) 进程 (Process)
Topic 9
Against
interest of
China and
Russia
美国 (U.S.)
朝鲜半
岛
(Korean
peninsula
)
中 (Chinese)
中
国
(China)
半
岛
(Penins
ula)
局势 (Situation)
Topic 10
Koreanspr
otests
Against
THAAD

萨德 (THAAD) 部署
(Deploy
ment)
星州
(Seongju
County)
反
对
(Aainst
)
抗
议
(Protest) 集会 (assembly)

Source: https://zhishu.baidu.com/?tpl=trend&word=percentC8percentF8percentB5percentC2

203
For Detail, please read table A-1 in Appendix
105

China clearly believed that a more heated public response may persuade South Korea’s next
president, who was due to be chosen in May 2017, to reconsider its deployment. After the Lotte
Group approved a land swap with the government that enabled authorities to deploy THAAD on
Feb 26 2017,
204
Lotte Group became the target of CCP’s prapoganda and Chinese nationalism. This
event sparked a backlash in China.
205
On Feb 27, Xinhua News, a Chinese official press agency,
published a commentary with the title: “China Doesn’t Welcome ‘Lotte’ Like This ( 中国不欢迎这
样的“ 乐天”)” , and bluntly argued that Chinese consumers “can say no to the business or products”
concerning “national security.”
206
When replying to journalists’ questions related to THAAD and
Lotte on Feb 28, 2017, a Spokesman from the Chinese Ministry of Foreign Affairs also said that
“Chinese people’s attitude (against) toward Thaad is very clear” and “foreign business success in
China or not depends on the decision of the Chinese market and Chinese consumers.”
207
And the
spokesperson repeated the same answers for the following few days. And for the following few days,
Chinese news had mass coverage over Lotte and THAAD (See Figure 5.1).
As media focused on covering THAAD and Lotte at the end of February 2017, Chinese
began online searching in the Chinese version of Google, Baidu( 百度). Search counts peaked in
early March 2017 (See Figure 5.1). Chinese newspapers encouraged consumers to boycott South
Korean goods.
208
State media published daily attacks on South Korea’s “erroneous decision”. The

204
“South Korea's Lotte approves land swap for missile defense,” Reuters, last modified 02 2017,
https://www.reuters.com/article/us-southkorea-usa-thaad-lotte/south-koreas-lotte-approves-land-swap-for-missile-
defence-ministry-idUSKBN1660P6
205
Shannon Tiezz, “China Warns THAAD Deployment Could Destroy South Korea Ties 'in an Instant',” The
Diplomat, last modified February 2016, https://thediplomat.com/2016/02/china-warns-thaad-deployment-could-
destroy-south-korea-ties-in-an-instant/
206
“Zhong guo bu huan ying zhe yang de le tian, 中国不欢迎这样的“ 乐天[China don’t welcome Lotte like
this]’”Xinhua 2017.02 http://www.xinhuanet.com/world/2017-02/27/c_1120539249.htm
207
Chinese MOFA. 2017. Last modified http://www.fmprc.gov.cn/web/fyrbt_673021/jzhsl_673025/t1442083.shtml
208
“A geopolitical row with China damages South Korean business further.” Economist. Last modified Oct 19, 2017.
106
Global Times, a jingoistic newspaper in Beijing, encouraged Chinese consumers to “become the
main force in teaching Seoul a lesson”. It said they should “make it hurt”.
209

The Communist Youth League of China (CYL, 共青团) was the vanguard against THAAD.
The official newspaper of China Youth Daily ( 中国青年报) published an article saying “In Front of
National Interest, We Say ‘No’ to Lotte”( 国家利益面前，我们对乐天说“ 不).
210
On March 1, the
official Weibo account of Jiangxi( 江西) provincial CYL, shared a post of “the Most Complete List
of Lotte Group, You Understand It!”( 最全的乐天名单来了！你懂的！), encouraging Chinese
citizens to boycott.
211
Over four thousand bloggers on Weibo circulated this post, and over 3,000
people replied to it. The state-owned newspaper, Legal Daily(Legal Daily China), also shared a
detailed list of Lotte Marts’ Addresses in China.
212

https://www.economist.com/news/business/21730477-south-korean-industries-ranging-tourism-carmaking-are-being-
badly-affected
“China is whipping up public anger against South Korea.” Economist, last modified March 17, 2017
https://www.economist.com/news/china/21718876-it-wary-going-too-far-china-whipping-up-public-anger-against-south-
korea
209
Ibid.
210
Zhong, qing ping 仲青平, “Guo jia li yi mian qian .wo men dui le tian shuo bu zhong guo qing nian ba, 国家利益面
前. 我们对乐天说不[In front of National Interest, we say no to Lotte],”China Youth Dail, 中国青年报.” Last
modified March 17, 2017, http://zqb.cyol.com/html/2017-03/01/nw.D110000zgqnb_20170301_6-01.htm
211
Weibo, Last modified
https://weibo.com/2757691921/ExKKTEfGd?from=page_1001062757691921_profile&wvr=6&mod=...&type=comme
nt
212
“Zhong guo guan fang he mei ti yin dao wang min xian qi di zhi nan han le tian de re chao, 中國官方和媒體引導網
民掀起抵制南韓樂天的熱潮[Chinese official and media guide netizens to set off a wave of boycotting South Korean
Lotte]”Duan chuan mei, 端傳媒. Last modified March 2, 2017 https://theinitium.com/article/20170301-dailynews-
Lotte/
107

Figure 5.4 Sentiment Analysis of
News related to THAAD from People’s Daily

108

Figure 5.5 Sentiment Analysis of
Foreign Ministry Spokesmen’s Remarks on THAAD and Lotte

Figure 5.6 Sentiment Analysis of
Foreign Ministry Spokesmen’s Remarks on Lotte

Censors often try to rein in online discussion when it threatens to boil over into real-world
protests. But the Chinese government was allowing netizens to vent rage at South Korea. One group
of online nationalists called on “all patriots to unite and show South Korea what we can do”. But
109
officials were still anxious. There were more police outside Wangjing’s Lotte Mart than customers
inside. Some police officers dozed in vans, waiting in case of trouble. The party’s main mouthpiece,
the People’s Daily, praised the public’s low-key response at the time as evidence of a “brand-new
level of patriotism”.
China’s leaders worry about any popular movement that does not involve the Communist
Party—even one that is led by nationalists who profess to be on the government’s side. President Xi,
despite his own nationalist rhetoric, had been wary of letting passions flare too high. Officials tried
to dampen them in 2016 when a tribunal in The Hague rejected China’s claims in the South China
Sea. Only a few small protests erupted. A protest against South Korea on March 5
th
, 2017 in the
northeastern city of Jilin conveyed a hint of what the government feared: that protesters may use
displays of patriotism to vent other grievances. Some demonstrators in Jilin carried portraits of Mao
Zedong. Despite appearances, these do not necessarily suggest agreement with the party line. People
sometimes use them to poke at the current leadership—Mao symbolizes an era that was, as some
Chinese remember it, a better one for the underprivileged.
Businessmen also took this opportunity to demonstrate their patriotism as an effective tool
for bolstering public relations. For instance, a famous beauty blogger exhorted the 2.7 million
followers of her microblog to boycott goods from South Korea and not to travel to it. Weilong Food
Company ( 卫龙) decided not to sell South Korean products, including their signature products:
spicy dry tofu in Lotte Mart China, and post their decision on Chinese Twitter, Weibo, which
attracted over 570 thousand likes.
213
Jumei ( 聚美优品)’s CEO Chen, also posted a nationalist

213
Weibo, Last modified Last modified February 28, 2017
https://weibo.com/5171482644/ExMVP6QC8?from=page_1006065171482644_profile&wvr=6&mod=weibotime&typ
e=comment#_rnd1520214093666
110
comment toward Lotte and urged citizens not to cooperate with Lotte anymore.
214
A patriotic pop-
song has been played more than 3.5 million times since its release on March 8th. It includes the
lyrics: “Chinese sons and daughters must stand up; everybody, stop buying Lotte; make them get out
of China fast.”
215

Although the reaction from netizens on Weibo are mixed, this is successful advertising for
the Weilong Food Company. Analyzing over 90,000 comments and shares, netizens seemed to show
respect toward Weilong Food Company, and their spicy dry tofu began receiving a lot of attention
from Chinese netizens. On the other hand, Jumei’s CEO Chen received some praise but also raised
eyebrows and sparked criticism. The Weibo post from the Chinese Communist Youth League
(CYL), publicly asking people to boycott, also incurred criticism. CYL was condemned by netizens
as “Boxers”, and the Rebellion in Yihetuan Movement ( 义和团运动) was a naïve and ignorant
violent anti-foreign, anti-colonial, and anti-Christian movement that took place in Qing dynasty
China.
5.3. Boycott as an Economic Coercion
The anti-Korea boycott was apparently being applied selectively. It had little influence on
trade between China and South Korea (See Figure 5.7). Korean exports to China grew by 23percent
in September for the same month 2016, prompted partially by surging demand for Samsung-made
memory chips. However, boycott favors some Chinese firms by punishing their South Korean

214
Weibo,, Last modified February 28, 2017
https://weibo.com/1705180884/ExGfyjxaN?from=page_1003061705180884_profile&wvr=6&mod=weibotime&type=c
omment
215
“Di zhi han bu shu 「sa de 」di zhi le tian de fan sa de ge qu di zhi ge zhong guo ge shou xie tian ming !chuang zuo
le yi shou fan sa de de ge qu 抵制韓部署「薩德」抵制樂天的反薩德歌曲《抵制歌》中國歌手謝天明!創作了
一首反薩德的歌曲[The anti-THAAD song “Boycott song” of Boycott THAAD deployment, Boycott Lotte, Chinese
singer Xier Tian Ming composed the song]” Youtube, last modified, Mar 14, 2017,
https://www.youtube.com/watch?v=L4zRW6sYtLA
111
competitors, while allowing manufactures on the mainland to continue importing parts on which
their businesses rely on from other South Korean firms. In general, consumer products were an easy
target for Chinese nationalism. For instance, beauty products and even confectionery have been
affected. Amore Pacific, a cosmetics firm in South Korea, reported a 58percent dip in its second-
quarter operating profits.
216
Sales from other industries, such as Lotte Conglomerate and Korean
cars, were also damaged by the THAAD event.

Figure 5.7 Monthly Export from South Korea to China and the U.S.
from Jan 2012 to Feb 2018

216
“A geopolitical row with China damages South Korean business further,” The Economist, last modified October 19,
2017, https://www.economist.com/news/business/21730477-south-korean-industries-ranging-tourism-carmaking-are-
being-badly-affected

112
The Lotte Mart in China
Lotte became the target of Chinese boycott after signing a deal in February 2017 with the
South Korean government that allowed the defense ministry to use one of its golf courses as a base
for the THAAD launchers, even though Shin Dong-bin, its chairman, later said he had no choice
but to comply. Lotte owns about 100 supermarkets in China, as well as other businesses. The Lotte
group had $2.65 billion of sales in 2015, employing about 20,000 people in China, a third of its
overseas staff.
Lotte Mart has been losing money in China since 2011, in part of competition from online
retailers. However, the events of March 2017 were undoubtedly a turning point. Chinese officials
then closed 74 of the 112 Lotte Mart stores in China on pretexts such as breaches of fire-safety rules.
The firm itself closed another 13 stores as Chinese consumers turned their back on supermarkets.

217
Sales in the second quarter slumped to $18.5 million, down from 251.5 million in the same period
the previous year.
218
Chinese authorities then seized items of machinery, including four power
transformers and 23 pump motors, from two Lotte supermarkets in Beijing, citing failure to meet
power conservation standards. The equipment was subsequently dismantled and auctioned, with
proceeds going to the state treasury.
219
Reports indicated that despite repeated efforts by Lotte to
resolve the issues leading to store closures over 2017, inspectors would not arrive to conduct follow-

217
Donald Kirk, “China Plays Hardball With Lotte For Playing Ball On THAAD,” Forbes Asia, last modified May
2017 https://www.forbes.com/sites/donaldkirk/2017/04/26/china-plays-hardball-with-lotte-for-playing-ball-on-
thaad/#bc9ec9c278fa
218
Ibid.
219
Laura Zhou, “Chinese authorities seize equipment from South Korean retail giant Lotte as tensions over missile
defense shield continue,” South Morning China Post, last modified Aug 22, 2017,
https://www.scmp.com/news/china/diplomacy-defence/article/2107827/chinese-authorities-seize-equipment-south-
korean-retail
113
up inspections.
220
Moreover, several e-commerce sites had stopped selling Lotte’s goods and some
suppliers had ceased doing business with the company.
On October 12, 2017, Lotte, a South Korean conglomerate, confirmed the plan to liquidate
its Chinese hypermarkets. That symbols a major retreat for the firm since entering the Chinese
market in 2008. By all accounts, the cumulative impact of disruption has been significant. Total
losses for Lotte in 2017 are estimated to come to US $1.78 billion,
221
with the greatest impact felt by
Lotte Mart whose sales decreased by 76.9 percent from 2016.
222
The experience prompted Lotte to
make moves to leave the Chinese market, most recently approving the sale of 50 Lotte Mart stores
to Chinese retail giant Liqun Group in May 2018.
Korean Cars in China
South Korean cars have also been affected. As the world’s largest market for motor vehicles,
China is integral to many South Korean automakers. Hyundai and Kia, for example, relied on
Chinese buyers for approximately one-quarter of their 2016 sales. Perhaps unsurprisingly, this
industry experienced significant disruption during tensions regarding THAAD.
The primary mechanism of disruption was popular boycotts. Sales at Beijing Hyundai, jointly
owned by the South Korean conglomerate and Chinese manufacturer BAIC Motor, plunged by two-
fifths in the first eight months of 2017. Meanwhile, Beijing Hyundai’s sales rose in January and
February but plummeted by 65percent in May. Another Korean car company, KIA also sufferred

220
Cynthia Kim and Adam Jourdan “Ghost stores, lost billions as Korea Inc's China woes,” Reuters, last modified
September 12, 2017 https://www.reuters.com/article/us-northkorea-missiles-southkorea-china/ghost-stores-lost-billions-
as-korea-incs-china-woes-grow-idUSKCN1BN33V
221
“Lotte could shut department stores in China,” Korea Joongang Daily, last modified July 3, 2018
http://koreajoongangdaily.joins.com/news/article/article.aspx?aid=3051265
222
Michael Herh. “Lotte Shopping to Sell Off 21 Lotte Mart Stores in Beijing,” Business Korea, last modified April 27,
2018, http://www.businesskorea.co.kr/news/articleView.html?idxno=21921
114
from loss of sales after the THAAD event. Since late 2016, Korean sales in China have plummeted
(Figure 5.8, 5.9).

Figure 5.8 and Figure 5.9 Korean Cars Sales in China
Comparing with Japanese and Western Cars companies.

115

Chinese competitors also directly encouraged boycotts, with reports emerging that local
automakers were offering discounts and other benefits to customers who could demonstrate they
sold their existing South Korean vehicle or canceled an order for one.
223
Reports emerged that
Hyundai was at odds with its Chinese joint venture partner, BAIC, who was responsible for the
delayed payments and had been pushing for Hyundai to agree to restructure their supply network
in China away from mostly South Korean firms to local Chinese manufacturers.

Chinese Tourism Visiting Korea and Duty-Free Operators
The Korean tourism industry, too, has felt the effects of the travel boycott since group tours
from China to Korea were banned in March 2017. Chinese outbound tourism has become
increasingly important to the Korean economy in recent years, making up 47 percent of total tourist
arrivals in 2016 and being responsible for 70-80 percent of duty-free shop sales in that year.
224

Therefore, reduced tourism had particularly significant effects for South Korean duty-free operators.
There are also flow-on effects for many sectors of the South Korean economy that rely on foreign
consumers.
Korean tourism was affected by anti-Korean sentiment. For example, some 3,400 Chinese
passengers reportedly refused to disembark after the cruise ship docked at South Korea's spectacular

223
Kim Seung-bum, Kim Seong-min “Chinese Boycott Takes Toll on Hyundai-Kia, Suppliers,” the Chosunilbo. Last
modified July 4, 2017, http://english.chosun.com/site/data/html_dir/2017/07/04/2017070401462.html
224
Jenna Gibson “Chinese Tourists to South Korea Drop 40 Percent in March Amid THAAD Row.” Korea
Economic Institute, last modified June 9, 2019 http://keia.org/chinese-tourists-south-korea-drop-40-percent-march-
amid-thaad-row
“S. Korean businesses await the return of Chinese visitors to generate growth,” Yonhap News Agency, last modified
October 31, 2017, http://english.yonhapnews.co.kr/search1/2603000000.html?cid=AEN20171031009100320

116
island of Jeju on March 13, 2017. It was reported to be a protest at the deployment of THAAD in
South Korea.
225
Visiting Chinese tourists would buy out Korean products, such as Snail-slime
facemasks in the past. However, the untouched Korean products now reflected the anti-Korean
sentiment after THAAD deployment.
Chinese tourism toward Korea dropped after July 2016,
226
comparing the number of tourists
visiting from China, Japan, Taiwan, and the results further confirm fewer Chinese tourists visiting
Korea after THAAD incidents (Figure 5.10). As travel agencies across the country removed South
Korean options in such a short space of time, they suggested it had the hallmarks of a centrally
coordinated measure.

Seoul twice raised the issue before the WTO Council for Trade in Services,
however each time the Chinese representative denied any knowledge. The minutes of the second
meeting, for example, noted that “China was not aware of the existence of the "measures" mentioned
by Korea and regretted that Korea had raised the issue ... again”.
227

While reports emerged as early as August 2016 that Beijing had begun to tighten rules for
the issuance of tourist visas to Korea, it was not until March 2017 that significant disruption began.
China might not have ordered tour operators in Beijing to stop selling trips to the country.
Nonetheless, the decision to proceed by issuing an informal direction conforms to the notion that
Beijing was concerned about maintaining plausible deniability. Outbound tourism was discouraged
in two ways. First, China’s National Tourism Administration (CNTA) issued “travel tips” for those
considering a holiday to South Korea, reminding them to “soberly understand the risks of traveling

225
Stephen McDonnell, “China fuels anger over Seoul's missile move.” BBC News, last modified March13, 2017,
https://www.bbc.com/news/blogs-china-blog-39254254
“3,400 Chinese cruise passengers snub Jeju island as THAAD anger continues,” En.people.cn, last modified March
13, 2017, http://en.people.cn/n3/2017/0313/c90000-9189643.html
226
What is interesting is that Chinese business visit to Korea didn't change according to the difference and difference
model.
227
Council for Trade in Services - Report of the meeting held on 16 June 2017 - Note by the Secretariat, p 30.
117
abroad and carefully choose their travel destinations”.
228

Second, in early March reports emerged
that Beijing was planning to ban the sale of package tours. The ban, which came into effect decisively
on 15 March 2017, was issued by representatives of the CNTA to both online and offline travel
agencies. Agents were instructed to cancel all group tours departing after that date and told they
would be liable for fines or license revocation if they failed to comply. Officials in South Korea with
knowledge of the events suggested instead that these were minutes from a meeting—not a government
memorandum—and that all instructions were in fact issued verbally (Lim and Ferguson 2018).
In addition to travel agents ceasing to offer Korean packages, Chinese airlines were reported
to have withdrawn their applications for certain flights to South Korea citing “their government’s
disapproval”.
229

The impact was amplified by the fact that a large number of Chinese tourists travel
to Korea through package deals: 37.4 percent in 2016.
230

Disruption imposed real costs, given the
effects from the tourism industry to other sectors such as retail and hospitality, and indeed the
‘medical tourism’ industry. A report from the Hyundai Research Institute estimated total revenue
loss of US $15.62 billion and expected 402,000 jobs to be lost as a consequence.
231

Approximately
90 percent of the 160 tour agencies specializing in inbound Chinese tourism closed during the
dispute.
232

228
Adam Jourdan, “China hints at trade war strategy in South Korea standoff,’’ Reuters, last modified March 3, 2017
https://www.reuters.com/article/us-southkorea-china-dispute-
idUSKBN16A0T1?feedType=RSS&feedName=worldNews
229
Kim Bo-eun “China rejects chartered flights from Korea,” The Korea Times, last modified May 4, 2019
https://www.koreatimes.co.kr/www/news/nation/2017/01/116_221201.html
230
“3 in 4 foreign travelers in S. Korea opt for independent tours,” Yonhap News Agency, last modified June 8, 2017,
http://english.yonhapnews.co.kr/search1/2603000000.html?cid=AEN20170609002000320
231
“Thaad retaliation impacts Chinese patients to Korea,” The Dong-A Ilbo, last modified April. 19, 2018
http://english.donga.com/List/3/04/26/1290807/1
“THAAD row with China costs S. Korea dear: report All Headlines,” Yonhap News Agency, last modified September
15, 2017 https://en.yna.co.kr/view/AEN20170915008300320
232
“Ghost stores, lost billions as Korea Inc's China woes grow over Thaad,” The Strait Times, last modified September
13, 2017, https://www.straitstimes.com/asia/east-asia/ghost-stores-lost-billions-as-korea-incs-china-woes-grow-over-thaad
118

Figure 5.10. Chinese Tourists Visiting Korea (Comparing with Japanese and Taiwanese Tourists)
Source: https://kto.visitkorea.or.kr/eng/tourismStatics/keyFacts/KoreaMonthlyStatistics.kto

In 2017 all South Korean duty-free operators reported operating losses. Lotte Duty-Free, the
largest operator, reported a 99.25 percent collapse in its operating profits,

while its main competitor
Shilla Duty-Free reported a 26 percent decrease.
233

Even after the travel ban was lifted, duty-free
stores continue to report difficulties. This was consistent with reports that Chinese travel agencies
were instructed to leave Lotte hotels and duty-free stores off resumed tour group itineraries.
234

5.3. Other Economic Statecrafts

233
“DFS operating profits nosedive amid keen competition, Chinese sanctions, Yonhap News Agency, last modified
April 03, 2018, http://english.yonhapnews.co.kr/news/2018/04/03/0200000000AEN20180403002600320.html
234
“Hit by Political Crossfire, Lotte's China Exit Stalls,” Bloomberg, last modified February 12, 2018,
https://www.bloomberg.com/news/articles/2018-02-12/hit-by-political-crossfire-lotte-s-china-exit- said-to-stall.
119
K-Pop Industry in China
Reports of South Korean cultural content (from pop stars and actors to TV and films)
experiencing adverse consequences in the Chinese market emerged as early as August 2016.
235

No
South Korean artist has been granted approval to perform in China since September 2016. For
instance, a K-pop boy band EXO, which is hugely popular in China, canceled two concerts that were
to be held in Shanghai.
236
TV stations have been urged to blur a K-pop star’s face on a reality show.
Moreover, Chinese streaming platforms also have removed numerous South Korean programs.
South Korean celebrities even found themselves facing difficulty to renew advertising contracts in
China.
237

As actors began to experience visa issues, television series became postponed and popular
bands such as EXO saw Chinese concerts canceled. Reports emerged of a ban on particular Korean
stars and products. As with tourism, the so-called ‘Korean Performing Arts Activities Ban’ was
allegedly issued verbally by the State Administration of Radio, Film and Television (presumably to
maintain plausible deniability) and was accompanied by threats of fines or entertainment license
cancellations.
238

Reports emerged that Chinese companies who failed to comply with the ban were
indeed punished—for example, one company was fined US $14,500 for selling tickets for a concert
featuring a ROK idol group without government approval in November 2016.
239

The ban’s effect can

235
“Over 60 percent of content creators say business in China hurt by THAAD,” Yonhap News Agency, last modified
September 25, 2016 http://english.yonhapnews.co.kr/search1/2603000000.html?cid=AEN20160926003400315
236
Amy Qin and Choe Sang-Hun “South Korean Missile Defense Deal Appears to Sour China’s Taste for K-Pop,”
New York Times, last modified Aug7, 2016 https://www.nytimes.com/2016/08/08/world/asia/china-korea-
thaad.html?_r=0
237
“China is whipping up public anger against South Korea.” Economist, last modified March 17, 2017
https://www.economist.com/news/china/21718876-it-wary-going-too-far-china-whipping-up-public-anger-against-south-
korea
238
Kil-seong Lee. “Korean Movies in China Signal Thaw” The Chosun Ilbo, last modified April 02, 2018
http://english.chosun.com/site/data/html_dir/2018/04/02/2018040201264.html
239
“China toughens regulations on hallyu: sources,”Yonhap News Agency, last modified November 21, 2016
http://english.yonhapnews.co.kr/search1/2603000000.html?cid=AEN20161122009600315.
120
be seen in the decline in South Korea’s media content trade surplus which fell from US $107 million
in Jan-March 2016 to US $77 million for Jan-March 2017.
240

5.6. Conclusion
Why did the anti-foreign boycotts occur? In this case, we can see how the Chinese
government mobilized boycotts. First, by using state-controlled news outlets, the Chinese
government signaled its people to go against foreign companies such as Lotte and other Korean
businesses, synchronizing public opinion and state policy intent. The Chinese government
successfully adopted a propaganda campaign to ‘bridge’ the gap between the public and the state
foreign policy. In addition, China also paired other economic statecrafts, such as regulations to
prohibit Korean performances, with popular boycotts. This event aligns with Orienting Hypotheses
3 in Chapter 2, which states that the authoritarian state did launch a propaganda campaign to agitate
or allow the public to boycott when pre-crisis public opinion on the dispute is weak ex-ante, yet the
state prefers a hardline policy.

240
“S. Korea sees surplus from media content narrow in Q1 on THAAD row: data,” Yonhap News Agency, last
modified May 6, 2017, http://english.yonhapnews.co.kr/search1/2603000000.html?cid=AEN20170507001300320
121
Conclusion
Main Findings and Contributions
This dissertation began by asking the question: Why did the anti-foreign boycotts occur in
China during international conflicts but not others,? Boycotts are explained by consumers’ socio-
psychological attributes, such as consumer ethnocentrism and animosity in business studies,
241
but
not external factors like state manipulation. Moreover, scholars of international relations also have
long overlooked the role of anti-foreign boycotts in economic statecraft. In attempting to fill the gap
in the literature, this dissertation examines the case of China, trying to understand the role of the
authoritarian state in anti-foreign boycotts.
This study contends that the authoritarian state is the key to explaining why certain anti-
foreign boycotts took place. By tracking the development of China's boycott in the modern era, this
dissertation shows that the Chinese government turns anti-foreign boycotts on and off through state
media, according to whether their foreign policy intention was hardline or moderate. Additionally,
the dissertation analyzes three cases of anti-foreign boycotts in China. First, Chapter III finds that
the Chinese government allowed the public to boycott Japanese during the 2012 Senkaku/Diaoyu
Island territorial conflicts in 2012. Chapter IV illustrates the Chinese government condemned and
successfully ceased anti-American and anti-Filipino boycotts after 2016 tribunal’s South China Sea

241
Balabanis, George, Adamantios Diamantopoulos, Rene Dentiste Mueller, and T.C. Melewar, “The Impact of
Nationalism, Patriotism and Internationalism on Consumer Ethnocentric Tendencies,” Journal of International
Business Studies, 32 (1) (2001): 157–75.
Ishii, Kenichi, “Nationalistic Sentiments of Chinese Consumers: The Effects and Determinants of Animosity and
Consumer Ethnocentrism,” Journal of International Consumer Marketing, 21 (4) (2009): 299–308.

122
ruling. In the end, Chapter V exhibits that Chinese government inflamed the public anti-Korean
sentiment and successfully mobilized boycotts against Korean products when South Korea decided
to deploy THAAD missile defense in 2017. By studying these three cases in China, this research
finds that anti-foreign boycotts only develop to a movement at national levels when boycotts are in
favor of the state’s foreign policy, i.e., whether the state intended to enforce economic statecraft
against foreign counterpart or not. The main findings of these case studies can be summarized as
follows:
First, the government could play a role in collective action, and boycotts can be manipulated via
state media. This dissertation finds the state could manipulate boycotts via state media. Few scholars
study how the state could manage social movements,
242
but treat them as a voluntary, bottom-up
demonstration. Nationalism or anti-foreign sentiments are the determinants of popular boycotts.
Echoing Jessica Chen Weiss’s works on protests,
243
this work finds that the authoritarian state could
stir up or calm down nationalism via state media, signaling them to embark on a protest. Indeed,
not all Chinese are nationalists,
244
yet since enough people react to international disputes, boycotts
could impose damage to foreign business. Furthermore, in these cases, we could see how an
authoritarian state could build up its legitimacy by criticizing foreign counterparts, showing the
support from other countries or stakeholders, and how the locals from foreign counterparts also
disapprove their government’s action. For instance, in Chapter V, the People’s Daily strongly
criticizes Korea’s deployment THAAD. The state media also covers that Russia also condemns

242
Jessica Chen Weiss, Powerful Patriots: Nationalist Protest in China’s Foreign Relations, (Oxford: Oxford University
Press, 2014); Jessica Chen Weiss, “Authoritarian Signaling, Mass Audiences, and Nationalist Protest in China,”
International Organization 67:1, January (2013).
243
ibid
244
Alastair Iain Johnston, “Is Chinese nationalism rising? Evidence from Beijing,” International Security 41(3) (2017):
7–43.
123
Korea’s action, supporting China. In addition, People’s Daily also continuously reports that Korean
protesters denounce the U.S. anti-missile system, casting doubt on the legitimacy of Seoul's decision.
In the same chapter, we also see how the government could single out certain firms, such as Lotte,
as the targets of enemies of the state. On the other hand, this study also observes how a state could
calm anti-foreign sentiment down by stopping news broadcasts and declaring the irrationality of
boycotts or protests, as in the case in Chapter IV.
Second, this dissertation also found a new dimension of economic statecraft, discovering that
anti-foreign boycott could be a form of economic coercion, working as a non-military measure
against its foreign foes. Via state media, the state could signal 'green light' or 'red light' for the public
to launch a boycott. In Chapter III and V, China’s neighbors, Japan and Korea, were the victims of
Chinese boycotts. Moreover, the Chinese public has learned to play along with the Chinese
Communist Party, being adroit at following the direction of the state media. It is interesting to see
that celebrities and businessmen also took these the opportunities to show their patriotism on social
media whenever China got involved with international conflicts, as the study shows in Chapter III
and Chapter V.
Finally, this dissertation finds business actors took advantage of the nationalist events. There is
no evidence that the Chinese government designs sanctions regimes in order to satisfy the interests
of core domestic interest groups, like various scholars have sought to demonstrate.
245
However, it is
evident that the businessmen took the opportunity to join the bandwagon of nationalism in order to

245
Kaempfer, William, and Anton Lowenberg. “The Theory of International Economic Sanctions: A Public Choice
Approach.” The American Economic Review 78 (4) (1988): 786–793.
Drury, Alfred Cooper. ‘Revisiting Economic Sanctions Reconsidered’. Journal of Peace Research 35 (1998): 497-509;
Hedberg, Masha. ‘The target strikes back: explaining countersanctions and Russia’s strategy of differentiated
retaliation’. Post-Soviet Affairs 34(1) (2018): 35-54.
124
advertise their business or personal image. Chinese businessmen and celebrities learned to
accommodate the state's foreign policy, taking the opportunities to promote their own brands and
themselves, as well as avoiding the risks from the nationalism. In the case of Chapter V, we could
see some Chinese businessmen like Weilong Corporation stopped selling Lotte products and
condemned Lotte on Chinese Twitter, Weibo, winning applause from the netizens. In Chapter IV,
this study exhibits the Chinese online fruits store begin to emphasize their bananas or mangos are
not from the Philippines, once the bilateral relations turned sour. Meanwhile, Chinese celebrities
also keep tweeting “China Cannot Get Smaller” (# 中国一点都不能少#) around the time of South
China Sea trial,
246
expressing their patriotism and their loyalties to the government.
In addition, this study also displays that boycotts are economic statecrafts enforced with multiple
conditions:
a. First, from the sanctioner’s perspective, the sanctioner has to take control of media to
influence nationalist sentiment. Only when a state could monitor the spread of information
could the state successfully direct anti-foreign sentiment. To avoid potential subversion of
its authority, the Chinese government has long kept firm reins on both traditional and new
media. It is fair to say that the regime type definitely favors China in adopting economic
statecraft like anti-foreign boycotts. It also means that boycotts might not be as feasible of a
foreign policy tool in democratic countries.
b. Second, the boycott country has to be integrated into world economy. The foreign products
could only be targets of boycotts when the products could be sold in its markets. Countries

246
Manya Koetse, “Weibo Night Awards: These Were the Most Influential Weibo Brands, Events and Celebrities,”
Whatsonweibo, last modified: January 16, 2017, last modified https://www.whatsonweibo.com/weibo-night-awards-
influential-weibo-brands-events-celebrities/
125
like Vietnam could hardly be affected by a public boycott because it lacks brands. The foreign
products could only be ideal targets for boycotts if the final products have visible,
recognizable brand names. As shown in Korea’s case, even during the Sino-Korean tension,
intermediate goods export from sectors such as the semiconductor and petrochemical
industries showed an increase of 19.2percent.
247
It displays the fact that foreign products
could not be boycotted if they are not identifiable. People could not boycott certain products
if they are not aware of their original nationality. It also reveals that intermediate goods, such
as parts and accessories, as well as raw materials like minerals or gas, are rarely boycotting
targets.
c. Lastly, the boycott is rarely adopted as economic coercion, due to the collateral damage to
domestic industries it brings. Boycotts are a rare economic coercion to be applied. As it is
shown in Chapter III and Chapter IV, we could see the Chinese government actually used
up all their non-military techniques before allowing or encouraging boycotts.
Finally, the finding from this dissertation supports the literature on interdependence. Robert
Keohane and Joseph Nye argue that, in order to wield power, less vulnerable states will try to use
asymmetrical interdependence in particular groups of issues as a source of power. The cases of
boycotts in China show that economic interdependence creates limitation but also generates powers.
Indeed, the massive size of the economy brings China leverage against foreign counterparts, and
asymmetric interdependence spawns vulnerability.
248
States will approach economic
interdependence in terms of power as well as its effects on citizens’ welfare, although welfare
considerations will limit their attempts to maximize power. This is exactly what China did in this

247
Jung Suk-yee, “Bilateral Trade between S. Korea and China Increased Despite THAAD Conflict,” last modified:
December 20, 2017, http://www.businesskorea.co.kr/news/articleView.html?idxno=20126
248
Robert Keohane and Joseph S. Nye, Jr., Power and Interdependence, (London: Pearson Higher Ed, 1987)
126
study, coercing their neighbors with economic power, but the collateral damage raised by boycotts
also prevent the Chinese government from constantly adopting them.
Taken together, these findings offer several contributions to our emerging knowledge of the
boycotts as economic statecrafts. First, according to my limited knowledge, this dissertation is the
one of the few studies in political science that explores boycotts in recent years, explaining when anti-
foreign boycotts occur in China. Second, this dissertation brings a new dimension for the literature
of economic statecrafts. Highlighting that boycotts could also be an instrument for economic
coercion. Moreover, this work also contributes to the China study, provides a new perspective of
Chinese foreign policy.
In addition, methodologically, this dissertation explores how the Chinese government
manipulates state media to motivate the anti-foreign sentiment. This is one of the few works
analyzing Chinese state media with automated text analysis. Using a dictionary method, this research
systematically identifies, extracts, and quantifies the sentiment of state media against foreign countries.
This research also uses topic model LDA to examine the topics of state media, scrutinizing the
wording of Chinese media on foreign policy via text analysis, and finding the connection between
state media, nationalism and boycotts.
Avenues for New Research
In the future, it would be great to systematically study the anti-foreign boycotts on a global
level. Due to data constraints, this dissertation finds a connection between boycotts and foreign policy
through case studies limited in one single country: China. Since only states with certain conditions,
such as regime type, could adopt anti-foreign boycotts as economic statecraft, the cases of anti-foreign
boycotts are therefore limited. While this dissertation only focuses on anti-foreign cases in China, it
127
leaves room for future study in other authoritarian states, such as Russia and Vietnam. Russia had
a history of economic coercion, including banning imports of wine, fishes, meats and also exports
like oils and gas. The Russian government also advised citizens to boycott Estonian products and
avoid all travel to Estonia, when Estonia relocated buried remains of WWII Russian soldiers in
1999. The boycott cases from other countries would be helpful for further generalization of the
proposed theory in this dissertation. Furthermore, it would be also fascinating to compare the anti-
foreign boycotts in other countries with different regime types.
Second, interviews are needed for the next step of this research. Due to the sensitivity of the
topic and the deteriorating political climate in China since Xi’s inauguration, doing interviews
became more and more challenging. Several interviews with scholars from China in the initial stage
of this research are not conducive for this dissertation. For the next stage of this research, I could
target the netizens who showed anti-foreign sentiment and those who are against boycotts on online
forums. Furthermore, interviewing officials, former officials or scholars from target countries,
including Japan, the Philippines, and Korea will also be the next stage of this work. Even though
collecting the research materials from target countries might be biased, the information from these
countries would be richer sources for further studies.
Moreover, the role of anti-foreign boycotts in economic statecrafts requires further studies.
The Chinese government is willing to use economic coercion to force their foreign counterparts to
comply with its foreign policy goal, even though this dissertation finds that anti-foreign boycotts are
less preferable instruments of diplomacy, due to their costs to domestic industries. Nevertheless, the
questions of how an authoritarian state like China selects instruments from numerous economic
statecrafts and how the Chinese government targets particular sectors and products require further
research to identify. It might take systematic studies to learn patterns on how authoritarian states
128
select the retaliation measures from multiple foreign policies tools, from military to economic
coercion.
Moreover, it takes further research to understand how people identify foreign products.
Scholars
249
argue that firm visibility, or the degree of exposure a firm has to popular consumers, is a
powerful predictor of the effects of political-conflict risks. However, even though the socio-
psychological mechanism of the anti-foreign boycott is well studied, how individuals identify foreign
products is not examined in the research. Some consumer products brand names are visible, but
foreign products could avoid being targets of boycotts if local costumers are not aware of their
country of origin. For instance, Boston Consulting Group (BCG) surveyed 3,535 consumers in 11
cities in China in 2007 and noticed that a majority of Chinese consumers considered famous
international brand such as Tide (90percent), Head & Shoulders (86percent), Colgate (86percent)
and Avon (74percent) as Chinese local products.
250
This study highlights the fact that the
effectiveness of anti-foreign boycotts might decrease if people are not able to identify the origin of
products. The BCG study also suggests that 'Chameleon branding,' i.e., branding as local products
is one way to avoid boycotts. Yet consider that Chinese shoppers have developed a distrust for
domestic products due to safety incidents, counterfeit goods, and low regulation levels. It is not
certain whether the consequence of 'Chameleon branding' is benign or not in the end.
In addition, it would be interesting to study how business exploits nationalism. There are few
studies that investigate how businessmen exploit nationalism, taking advantage of the nationalist

249
Kristin Vekasi, China's Political Rise and Japan's Economic Risk: Multinational Corporations and Political
Uncertainty, (Doctoral dissertation, The University of Wisconsin-Madison, 2014).
250
“Foreign or Local Brands in China? Rationalism Trumps Nationalism.” The Boston Consulting Group Last
modified: June 8, 2008 http://image-
src.bcg.com/Images/BCG_Foreign_or_Local_Brands_China_Jun_2008_ENG_tcm55-161901.pdf
129
sentiment as opportunities to profit.
251
It is an interesting topic to study from multiple perspectives.
For domestic producers, under what kind of circumstance would they benefit from international
conflicts? And how could the business profit from the event? When businessmen and celebrities
join the nationalism bandwagon, what socio-psychological attributes determine that consumers
would support the businessmen by buying their products? These are all fascinating topics for future
research.
Finally, the possible connection between boycotts and domestic support leaves for future
examination. The study from IPE scholar
252
suggests that policymakers benefit from imposing
sanctions through increased domestic support. The state faces two-level games in international
conflicts, dealing with foreign counterparts and their domestic audience at the same time. Allowing
boycotts is one way to vent anti-foreign sentiment, and it is a way to include the public in 'punishing’
the foreign counterpart collaboratively with the state. Therefore, it would be intriguing to investigate
how boycotts affect the sentiment from the public to the state.
The Future of Anti-Foreign Boycotts
This dissertation represents one of the first few studies on anti-foreign boycotts from a political
economy perspective. While a growing body of business research and journalism has called attention
to boycotts, little if any work until now has explored the state role on anti-boycott occurred. As the
2010s are coming to an end, an international nationalist movement emerges, and as nationalist
political parties are on the rise across the west, international disputes between states might intensify.

251
Jiun Bang, “Profits and Patriots: Commodification of Nationalism and Territorial Disputes in Northeast Asia,”
(Doctoral dissertation, University of South Carolina, 2017)
252
Teahee Whang, “Playing to the Home Crowd? Symbolic Use of Sanctions by the United States,” International
Studies Quarterly, Vol. 55, No. 3 (September 2011), pp. 787-801
130
Even though a Starbucks boycott or Nike shutdown in China during trade clash between the U.S.
and China might be unlikely to happen in the near future. However, as the tension between China
and the West soars, boycotts might become one popular tool of economic statecrafts for China
against those more vulnerable allies. Boycotts used to be instruments from the weak against
colonialism in a century ago. It was used for the non-cooperation movement against Britain in India
and the May Fourth Movement against Japan in the early 20
th
century. In contrast, now boycotts are
foreign policy tools for the mighty ones, as a way to remind their neighbor of their power. Mahatma
Gandhi might have never imagined that, but maybe he wouldn't oppose to this idea, because at least,
it is a peaceful instrument, isn't it?

131
Appendix I

Australia’s Top Three Export Destinations (Year 2000-2016)

Cambodia’s Top Three Export Destinations (Year 2000-2016)

132
Indonesia’s Top Three Export Destinations (Year 2000-2016)

Japan’s Top Three Export Destinations (Year 2000-2016)

Korea’s Top Three Export Destinations (Year 2000-2016)
133

Lao’s Top Three Export Destinations (Year 2000-2016)

Malaysia’s Top Three Export Destinations (Year 2000-2016)

134

Mongolia’s Top Three Export Destinations (Year 2000-2016)

Philippines’s Top Three Export Destinations (Year 2000-2016)
135

Singapore’s Top Three Export Destinations (Year 2000-2016)

136
Appendix 2

Appendix 2-1: Validation for Sentiment Analysis
The validation tests involved having a team of three individuals reading 40 documents each from
Chinese MFA spokespersons comments and news from People’s Daily. All three participants are
native speakers of Mandarin Chinese. The validation tests were conducted during the end of 2018.
Following Lucas et al. (2015), I extracted the sample of documents, asking participants whether the
documents are positive, negative, or neutral tones against foreign counterparts. In these cases, if they
correctly identify the topic predicted by the model, I count that as a correct response.

percent Correct percent Correct
MFA (N = 40) People’s Daily (40)
POSITIVE 81percent 77percent
NEUTRAL 60percent 63percent
NEGATIVE 98.3percent 92.2percent

137
Appendix 2-2: Selecting the Number of Topics
To determine the optimal number of topics, I utilized the LDA Tuning package in R created by
Nikita Murzintcev, which provides four estimation methods based on Griffiths and Steyvers (2004),
Cao et al. (2009) and Arun et al. (2010). The simulations, graphed below, suggest that the optimal
number of topics should be somewhere around 16-21 and 17-33.

For Chapter III.

For Chapter V.

138

Appendix 2-3: Validation of Topics

percent Correct percent Correct
Topic1 Issue
Awareness
80percent
Topic 1THAAD
against China’s
interest
61percent
Topic 2 Boycott and
Patriotism
33percent
Topic 4 Bring Costs
to Tourism
39percent
Topic 3 Japan Arrest
Chinese Activists
45percent
Topic 5 backing up
by American
38percent
Topic 6 Event
Awareness
82percent
Topic 9 Against
interest of China and
Russia
60percent
Topic 7 Protest 72percent
Topic 10 Koreans
protests against
THAAD
43percent
Topic 8 Topic
Diaoyu Island is
China's territory
60percent

139
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Creator Yang, Mingmin (author)

Core Title Anti-foreign boycotts as a tool of economic coercion: the case of China

School College of Letters, Arts and Sciences

Degree Doctor of Philosophy

Degree Program Political Science and International Relations

Publication Date 07/30/2019

Defense Date 03/20/2019

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag authoritarian state,boycott,China,economic coercion,economic statecraft,international political economy,nationalism,OAI-PMH Harvest

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Advisor Katada, Saori (committee chair), Graham, Benjamin A.T. (committee member), Jia, Nan (committee member), Kang, David (committee member)

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