Economic diplomacy in the 21st century will face a different set of challenges stemming from the changed global economy, US-China tensions, as well as a backlash against globalisation, among others. Therefore, the conduct of economic diplomacy, i.e., how a country manages its foreign economic relations including trade and investment, must adapt.
The framework for economic diplomacy should seek to balance commercial openness with strategic foreign policy aims, broadly defined. It should situate a country within the 21st century global economy with its new drivers, promote a rules-based system in order to mitigate Great Power tensions, and recognise that all foreign economic policy is ultimately also domestic. There is no one general approach but there are several principles, each with their own challenges, for governments to consider, which is set out in this Strategic Update.
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Economic Diplomacy in the 21st Century
About the Author
Professor Linda Yueh is Visiting Professor at ÐÓ°ÉÂÛ̳ IDEAS and Chair of the ÐÓ°ÉÂÛ̳ Economic Diplomacy Commission. She also serves on the Policy Committee of the Centre for Economic Performance at ÐÓ°ÉÂÛ̳. She is Fellow in Economics, St Edmund Hall, University of Oxford and Adjunct Professor of Economics, London Business School. She was Visiting Professor of Economics at Peking University. Professor Yueh is the Editor of the Routledge Series on Economic Growth and Development and the author of numerous books, including China’s Growth: The Making of an Economic Superpower and The Great Economists: How Their Ideas Can Help Us Today.