The limits of pressure: China’s bounded economic coercion in response to South Korea’s THAAD

ABSTRACT In the context of economic interdependence, South Korea, like other countries with asymmetrical trade relations with China, is often seen by its citizens as vulnerable to China’s use of economic power to gain political influence. However, South Korea’s deployment of the THAAD (Terminal High Altitude Area Defense) offers the opposite perspective on South Korea’s vulnerability. Despite China’s coercive policies against South Korean businesses and great leverage over Korea’s economy, China failed to generate a concession regarding Korea’s decision to deploy the THAAD. The question is why? Drawing on the 2016–17 THAAD crisis between South Korea and China, I argue that influence of coercive power will depend on the coercive state’s willingness to pay a cost, the target state’s level of stateness, and the relative intensity of interests related to the policy. This case study helps us understand the circumstances under which China’s use of economic coercion against target countries may be successful.