China's use of economic inducements as a foreign policy tool has produced a mixed record — delivering tactical wins in some countries while triggering backlash in others, according to Audrye Wong, author of 'Subversion and Seduction: China's Economic Statecraft'. Writing in The Diplomat, Wong argues that so-called 'subversive carrot' tactics — which include bribing politicians, bypassing regulations, and cutting corners — have allowed Beijing to entrench influence where leaders face few accountability checks, but have largely backfired in democracies with stronger oversight mechanisms.

Where China's Strategy Has Worked

Cambodia is cited as a clear success case. Beijing reportedly leveraged economic ties to secure Phnom Penh's support within the Association of Southeast Asian Nations (ASEAN), enabling Cambodia to block multilateral consensus statements on the South China Sea — a key Chinese foreign policy priority. Similarly, Greece and Hungary have reportedly used their positions within the European Union to veto statements critical of China, according to Wong.

Beyond formal vetoes, Wong argues that Beijing has also succeeded in buying 'silence and acquiescence' — from both governments and corporations — on sensitive issues including the detention of Uyghurs in Xinjiang. 'While not fundamentally winning hearts and minds or creating new allies, Beijing has used economic statecraft to divide and conquer,' she states.

Where It Has Backfired

In countries with stronger democratic accountability, the same tactics have proved counterproductive. The Philippines is highlighted as a case where subversive inducements failed to shift strategic posture, with domestic political pressures and institutional checks limiting Beijing's leverage. Wong notes that on the level of strategic influence, these methods have damaged China's global image — a significant liability for a country positioning itself as a great power promoting 'win-win' cooperation.

Business Lobbying and the German Case

The report draws particular attention to Germany, where the political influence of major business groups with deep exposure to the Chinese market has complicated Berlin's ability to form a coherent national strategy. German automakers dependent on China — which absorbs more than a third of Mercedes-Benz sales — have actively lobbied for cooperative policies toward Beijing. In March 2024, the Mercedes-Benz chief executive publicly spoke out against an EU anti-subsidy probe into China's electric vehicle industry, according to the report.

This pattern of business-driven lobbying, Wong argues, creates internal divisions within governments and key ministries, slowing any concerted policy shift away from China's centrality in global supply chains.

The Broader Strategic Logic

Wong contends that China's approach differs meaningfully from that of the United States, which has tended to emphasise sanctions and coercive economic tools. Beijing, by contrast, has been 'quite concerted and sustained' in deploying positive inducements — trade, investment, and aid — to align other countries with its foreign policy interests.

In Malaysia, despite earlier resistance to corruption-tainted Chinese infrastructure projects, a track record of economically beneficial Chinese investments has since conditioned political attitudes at both national and local levels, reducing appetite for confrontation over the South China Sea or Xinjiang. Beijing, Wong concludes, appears 'best able to achieve influence through the diffuse latency of economic interdependence' — a dynamic that makes China's role as a crucial economic partner a compelling and durable draw for many governments.

As China's economic statecraft continues to evolve, the central question for policymakers across the Indo-Pacific and Europe is whether institutional safeguards and coalition-building can outpace Beijing's ability to exploit economic leverage before strategic dependencies deepen further.