Grassroots economic interdependence: evidence from US–China higher education partnerships

Abstract Extending the concept of economic interdependence to the subnational level, this paper explores how the foreign commercial ties of non-state actors can introduce geopolitical risks to advanced democracies. We examine this phenomenon through the lens of US–China higher education partnerships. Facing budget constraints, public universities in the United States often rely on revenue from international tuition and fees. Due to trade barriers in China, American universities frequently recruit fee-paying Chinese students through joint degree programs (JDPs) established with Chinese partner institutions. These transnational partnerships create asymmetric market dependencies that the Chinese government can exploit. Using newly compiled panel data from the United States, we find that the extensive pre-existing JDP network is significantly correlated with the proliferation of Confucius Institutes (CIs) – a flagship soft power initiative of the Chinese government – on American college campuses. Preliminary evidence from other countries aligns with the patterns observed in the USA. Our findings highlight how China employs a decentralized approach to advance its soft power strategy through higher education ties.