The East Asian Peace as a Second-Order Diffusion Effect

While East Asia is often cited as a region at high risk of interstate military conflict, it has remained free of major hostilities since the 1979 Sino-Vietnamese war. In this article, I propose a second-order diffusion dynamic to help explain this East Asian peace. It is based on the stimulus event of China's shift in political-economic models that began in 1978. While the "flying geese" diffusion of open trading and developmental state policies in East Asia began earlier, China's shift contributed to dramatic region-wide change in a key variable: the volume of trade flows. Intraregional trade interdependence did not increase greatly because strong economic growth accompanied increased intraregional trade flows. Rather than interdependence, my argument focuses on the utility of high volumes of trade for interstate crisis signaling to avoid escalation to war. The first-order diffusion of trade-based strategies, I argue, had second-order effects on international relations in East Asia. While China was not the first adopter, diffusion of liberalization to this large, developing economy increased regional trade flows directly and indirectly via increased competitive pressures. The resulting higher flows of intraregional trade then inhibited the escalation of interstate conflicts. Statistical analyses support my contentions while controlling for a number of other plausible contributing factors.