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This study examines whether the pacifying effect of foreign direct investment (FDI) on territorial disputes between adversarial dyads is conditional upon the dyads' past experience of military cooperation. I built a political economy model and conducted a logistic regression analysis on the newly coded bilateral FDI data between adversarial dyads and the existing dataset by merging the rivalry data established by Thompson [51] and the territorial disputes data collected by Lee and Mitchell [42]. I found that when bilateral FDI flows between adversarial dyads reach a certain level the pacifying effect of FDI is stronger for adversarial dyads with past military cooperation. I also found that while past military cooperation has a pacifying effect in general, past military cooperation that occurred more recently has a stronger pacifying effect than those that occurred a while ago. Moreover, based upon the theoretical model and empirical findings in this paper, I investigated the political implications for Tsai Ing-wen's "New Southbound Policy" and Taiwan's approach to the territorial dispute issues in the South China Sea. [ABSTRACT FROM AUTHOR]

The paper seeks to enrich the discussion of China's power by critically engaging with existing literature on the topic, presenting a conceptual analysis of power, and suggesting a framework for future research. Firstly, it is shown that only a few scholarly publications approach China's power in a more comprehensive and conceptually rigorous way, and even these still contain spaces for improvement. It is argued that the main fault of the existing literature on China's power is confusion surrounding the concept of power. For this reason, secondly, the article presents a conceptual analysis of power and it puts forward a comprehensive framework suitable for analytical use in international relations. In this place, the article argues that an exhaustive assessment of state power should contain an analysis of state's intentions, its sources of power on (at least) three analytical levels, and outcomes of interactions. Thirdly, an analysis of Chinese policies in the South China Sea is offered as an example of applying the framework to a concrete issue. Finally, the article identifies further directions for researching China's power and foreign policy using the presented model of power. [ABSTRACT FROM AUTHOR]