What Are Nexus States?

What are ‘Nexus States’? For the purposes of this discussion, they’re defined as small states that enjoy a convergence of geographical access, financial services –technological hub status, and possess crucial industrial commodities, that act as platforms for economic and security influence expansion.

As China’s corporate arm becomes globally ambitious, these nexus states utilize their position to Beijing’s benefit. A historical diplomatic relationship, for instance in the case of South Korea, adds to that convergence, by extending a mindset of possible suzerainty over the small state in question.

Each one of these factors is crucial enough to influence China’s bilateral relationship with a state in question; more so when a combination of them strengthens the case for Beijing’s extra attention. What is crucial is not in the numerical addition of these factors but how they act to synergize a level of attraction to China. For instance, in the case of Switzerland, the long standing presence of technological and financial prowess and its independent historical status in Europe, is sufficient to boost China’s attention to the Republic, despite the absence of strategic commodities, trade routes, or historical diplomatic ties prior to the modern era.

Some key aspects of Chinese foreign policy behavior have been observed in the prior literature; a preference for bilateral regional organizations where Beijing is seen as the active partner courting regional states (Chan 2010); a desire to depart from American influence and international organizations such as the World Bank, IMF, and ADB associated with trans-national corporate power from the West (Cassidy 2013). This neither completely removes Realist intentions, in terms of power projection in its immediate geographical region, nor erases the profit motive, through institutional guarantees such as the rule of law, ground rules for market entry and physical infrastructure (Ikenberry 2014). There is both a gap in deciphering Chinese behavior towards other smaller states and a lack of analysis on how non-European nexus states behave towards non-American powers like India and China.

This corresponds to a larger narrative of what China wants out of these interactions with nexus states that hold the key to economic and security convergence in the global market. It seeks better and more efficacious access to resources, markets, and avenues for continued economic expansion (resources), especially as the domestic scene matures. It seeks to gain influence and the ability to dictate the terms of trade and security in the international mercantile architecture (rule setting) and to ultimately enhance its global prestige and reverse centuries of status-decline (restitution).

A more detailed qualitative indicator would be the geographical proximity to core Chinese security interests in the Asia Pacific heartland; South Korea and Singapore lie much closer to Chinese land-based and maritime interests and are therefore treated differently as compared to Qatar. The latter is crucial to Beijing’s mercantile and industrial policies but geographically distant from its core and theoretically would be subject to a different foreign policy perspective from China. Beijing’s treatment of nexus states as qualitatively complex and driven by context as the situation demands would be constrained by some of the factors mentioned above. But there would be means to measure, comment, and analyze the nature of Beijing’s foreign policy towards the states in question.

From a more positivist angle, the “closeness” of any bilateral relationship between Beijing and the country in question can be measured by the volume of agreements, strength of diplomatic staff, extent of joint-research or levels of state visits between both parties (Kang 2003/2004) (Chan 2010) (Tony Tai-Ling Liu 2011). But this is simply another means of deciding the foreign policy influence of Beijing by means of its foreign policy ‘hardware’. Quantitatively limiting bilateral relations misses the forest for the trees and does not illustrate the narrative of Beijing’s intentions or qualitative nature of joint relations.  

These four factors converge as a gravitational pull for Beijing towards nexus states, regardless of their physical or population size. While China seeks to understand and ultimately utilize nexus states that possess one or more of the above-mentioned factors, it is simultaneously affected by the need to align trade and security policies toward the needs of its smaller counterparts. This creates the need to arrange these states into a hierarchy, which moves beyond a tributary arrangement: Singapore and South Korea, which are within the heartland of historical Chinese security and economic activity, would supposedly enjoy a more intimately ‘nuanced’ relationship with Beijing as compared to Switzerland and Qatar.

It seems apparent that the type of Chinese state-owned corporations and government organizations keen on Bern or Doha would differ based on the sort of benefits they would accrue from these two very different states. Azerbaijan and other smaller Central Asian Republics serve as a staging point for Chinese corporations to expand their reach through Eurasia into Russia and the EU. All such category types appear to be equally important but serve distinct needs for China’s aims of expanding its resource and market reaches while entrenching its position in the global economy. This is just the first step in what will hopefully become an ever-expanding new literature into how global powers interact with, influence, and get influenced by smaller nexus states.

Dickson Yeo

Visiting Researcher at National Institute of Strategic Communication, Beijing University

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