Checkbook diplomacy, or chequebook diplomacy, is used to describe international policy openly using economic aid and investment between countries to carry diplomatic favor.
In East Asia, the most significant example has been the competition between the People's Republic of China (in Mainland China) and the Republic of China (in Taiwan) to gain "recognition" with entities around the world, notably in the Pacific. Stratfor has referred to them vying for the attention of "geopolitically insignificant governments," as nearly all major countries around the world have recognized the PRC as the legitimate government of China.
The term has been used to describe German and Japanese international involvement during and after Gulf War I. Due to their history, both countries were unable to commit troops to the coalition, because of restrictions placed into their constitutions when they were drawn up under allied occupation following World War II (see Article 9 of the Japanese Constitution and Art. 87a of the Basic Law for the Federal Republic of Germany). Instead they volunteered large amounts of financing for the war effort. However, during this time Germany was also providing additional NATO navy units in other regions.
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