Drawing on untapped, open-source commentaries from elite Chinese commentators, we show that since 2018, China has become fixated on preparations for a potential “financial war” with the United States. China appears to have adjusted its renminbi (RMB) internationalization strategy – and broader approach to financial regulation – accordingly. China's perceived vulnerability to dollar sanctions increases the urgency of RMB internationalization but also makes it unacceptably risky to liberalize the capital account. The sources suggest that China's solution is to pursue partial RMB internationalization by keeping the capital account tightly regulated while encouraging trade partners to sign up for RMB settlement platforms. As more foreign banks sign up for RMB payment systems, China is gaining confidence that its financial system could weather the sudden imposition of dollar sanctions. However, China remains vulnerable in principle to a “monetary sniping” attack on the offshore RMB market.

In 2005, the Chinese government deployed a new financial instrument to accelerate technological catch-up: government guidance funds (GGFs). These are funds established by central and local governments partnering with private venture capital to invest in state-selected priority sectors. GGFs promise to significantly broaden capital access for high-tech ventures that normally struggle to secure funding. The aggregate numbers are impressive: by 2021, there were more than 1,800 GGFs, with an estimated target capital size of US$1.52 trillion. In practice, however, there are notable gaps between policy ambition and outcomes. Our analysis finds that realized capital fell significantly short of targets, particularly in non-coastal regions, and only 26 per cent of GGFs had met their target capital size by 2021. Several factors account for this policy implementation gap: the lack of quality private-sector partners and ventures, leadership turnover and the inherent difficulties in evaluating the performance of GGFs.

Under pressure to choose between the U.S. and China, Southeast Asian countries have adopted a hedging strategy: deepening economic relations with China while strengthening security cooperation with the U.S. How does the region's public view this strategy? With tensions rising in South China Sea territorial disputes, are more nationalistic individuals more likely to oppose hedging? Using an original public opinion survey conducted in the Philippines, we find that while an overwhelming majority of respondents were concerned about the territorial disputes, more nationalistic Filipinos were no more concerned than less nationalistic ones. Further, more nationalistic Filipinos were more likely to view economic relations with China as important for the Philippines and to approve of Duterte's China policy, which follows the logic of hedging. These surprising findings suggest that under the shadow of great-power competition, the link between domestic politics and foreign policy is nuanced in the Philippines, and Southeast Asia in general.

Vietnam has tried to maintain a delicate balance between the United States and China by pursuing a hedging strategy. In a shifting strategic environment marked by structural uncertainty caused by the rise of China, weaker Southeast Asian states like Vietnam are projecting a non-alignment posture. However, this rational behavior is not the product of systemic factors alone but also certain domestic political dynamics. We argue that regime legitimation – how the Vietnam Communist Party seeks to generate and sustain internal and external legitimacy – weighs heavily on Vietnam's strategy toward US–China competition. In particular, three legitimation strategies employed by the Vietnam Communist Party – performance-based legitimation, nationalism-based legitimation vis-à-vis China, and defensive legitimation vis-à-vis “hostile forces” – produce dynamics that ensure Hanoi does not get inadvertently pulled into the orbit of either Beijing or Washington. Theoretically, this article contributes to the literature on domestic determinants of foreign policy with a focus on regime legitimation. Empirically, we seek to supplement the discussion on the salience and relevance of domestic politics in informing Southeast Asian states' strategic calculation amid great-power competition.

This article examines how Japan has adapted economic statecraft to serve changing strategic aims through case studies of trade arrangements, official development assistance, and dual-use technology. After World War II, Japan continuously adapted these economic tools to pursue shifting non-economic goals related to international reintegration, comprehensive security, human security, and traditional security. More recently, in response to escalating US–China strategic competition, Japan has employed economic statecraft to simultaneously reduce international instability and to counter China in targeted ways as part of a broader hedging approach. First, Japan has attempted to bolster multilateral trade arrangements amid a volatile policy environment, while also using them to both engage and counter China. Second, Japan has used official development assistance to stabilize and build defense capacity in Asian countries facing pressure from China. Third, Japan has increasingly militarized its dual-use technologies to enhance its ability to respond to Chinese activity in outer space.