Re-balancing or Counter-balancing? Assessing America’s Response to China’s Rise through Bilateral Investment Treaties

Esther Tran-Le, New York University

Full manuscript: www.kon.org/urc/v12/tran-le.html

Abstract The rise of China as an economic powerhouse with an aggressive leadership challenges America’s status as world superpower. In an international system increasingly dominated by economic relations, scholars have determined that specific international trade measures support strategic policy objectives.

My research addresses whether the United States government seeks to counterbalance China’s growing economic influence through bilateral investment treaties (BITs) in a certain set of countries. Using a logit regression, I show that Washington is trailing China and signing BITs with the same countries. However, running the same logit regression for Canada and Italy, I show that they too are signing BITs with the same countries as China. Because following China’s BITs is not unique to the United States, there is not enough evidence to conclude that the American government is using BITs as a strategic tool to counterbalance Beijing. Rather, the United States, Canada, Italy, and China are engaging in normal, competitive trade.

My thesis provides empirical analysis of the current U.S.-China strategic and economic relationship. It sheds light on the rhetoric exchanged between the American and Chinese leaderships, hopefully alleviating concerns of Chinese scholars and policy-makers that Washington is seeking to prevent China’s rise.

Read the full manuscript: www.kon.org/urc/v12/tran-le.html