Hedging Effects in Asia-Pacific Region: A Quantitative and Qualitative Analysis

Introduction

Amid rising Sino-US tensions, many Asia-Pacific (APAC) nations adopt hedging strategies, aiming to navigate complex geopolitical dynamics and protect their interests. This study explores the temporal-spatial evolution and implementation effects of these strategies through a novel four-quadrant theoretical framework and extensive empirical analysis using massive event data.

Theoretical Evaluation Framework

The proposed theoretical framework evaluates hedging effects using two indices:

• Geopolitical Relation Index (GRI): Measures the strength and nature of relationships between countries in terms of cooperation and conflict.
• Comparative Relation Index (CRI): Quantifies the relative distance between a country's geopolitical relationships with China and the US, allowing for the identification of countries that are significantly closer to one power over the other or engage in strategic balancing.

The framework allows for three categories of hedging effects:

• Significantly closer to China
• Significantly closer to the US
• Swinging (neither significantly closer to China nor the US)

Quantitative Methods

The study utilizes Global Database of Events, Language, and Tone (GDELT) data to construct the GRI and CRI indices. Event frequency and the Goldstein Scale (a measure of event significance) are used to capture the dynamics of international relations.

The analysis covers 19 APAC countries from 2000 to 2023 and examines the temporal evolution of hedging strategies in different periods, including:

• Effects of hedging strategies before and after China's Belt and Road Initiative (BRI)
• Influence of different US presidencies on APAC countries' hedging strategies

Qualitative Analysis

In addition to quantitative analysis, qualitative insights from country-specific case studies are provided to illustrate the complex factors shaping hedging behavior in the APAC region.

Results

• Temporal-spatial heterogeneity of hedging effects: The study reveals significant spatiotemporal variations in how APAC countries implement hedging strategies. The effects vary by country and over time, influenced by changing geopolitical circumstances and countries' risk-taking preferences.
• Three categories of hedging effects: Based on the dynamic evolution of effects, APAC countries can be categorized into three groups: those significantly closer to China, those significantly closer to the US, and those exhibiting a "swinging" pattern.
• Influence of BRI and US presidencies: The implementation of BRI has generally strengthened ties between China and countries significantly closer to it. Conversely, US diplomatic strategies, such as the Indo-Pacific strategy, have influenced countries leaning toward the US to distance themselves from China. The dynamics of hedging strategies have also been shaped by the different approaches of US presidencies.

Discussion

The article emphasizes the importance of quantitatively assessing hedging strategies to understand their impact on regional stability. It highlights the potential benefits of combining theoretical modeling with massive data for analyzing international relations. The study also provides valuable insights for policymakers in the APAC region to navigate the complex geopolitical landscape and adjust their foreign policies accordingly.

Conclusion

The study concludes that the implementation effects of hedging strategies in the APAC region are highly variable and subject to change over time. It provides a valuable framework for evaluating these effects and offers guidance for policymakers to understand the complex dynamics of Sino-US competition and its implications for regional security.