Hedging Strategy In Literature

3.1 Hedging strategy in the literature: conventional understanding as risk minimization

Introduced in the introduction in this chapter, I will first review existing literature on international relations theorists in narrating hedging strategy. Linking dictionary definition on the word hedge, hedging strategy means to prevent any loss in state’s pursuit of national interests from making strategic adversary in an uncertain international system by presenting overtly the strategic indeterminacy. Hedging strategy is, hence, a risk-aversive strategy in preventing any strategic loss thanks by putting all bargaining chips on single side. Rather, states practicing hedging strategy try to placing different chips onto different sides on a gambling table.
In the mid-200s, the period when hedging strategy drew concerns on the context of evolving geopolitics in the Asia-Pacific, many scholars directly relates the study of hedging strategy in relations to regional state’s response to the strategic implication of China’s rise (Foot 2006; Kuik 2008; Medeiros 2005; Roy 2005). Under such research agendas which does not deviates largely from the dictionary’s definition of ‘hedging’, facing increasing strategic uncertainty of what will China want from her rise in economics (and military, which becomes more significant since the late 2000s as Chinese PLA became more assertive), at the level of great power rivalry, scholars studied hedging strategies talked about the possibility to simultaneously gain economic benefits from China, largely short-term and material, with expanding business with China while engages China into a binding, rules-based, procedures-guided international economic
As we move alone on the scholarly discussion on hedging strategy in international relations, we shall see a large number of later works on why regional middle and small powers hedge against rising great powers like China involves what their precedent found: the reliance on defining hedging as minimizes strategic risks to hedgers in running international and regional politics in an increasingly anarchic system exemplifying by the uncertain effect, both on capability, intention and international order, by the global power shift (Lee 2012: 8; Matsuda 2012). Recent discussions on hedging strategy further broaden the scope of study on hedging as risk-contingency strategy, borrowing the terminology Kuik Cheng-Chwee, an Associate Professor of Strategic Studies and International Relations at the National University of Malaysia (UKM), who studes in the evolution of hedging for around a decade, in their literature to associate hedging as risk minimization strategy by deploying new dimensions to understanding hedging – regional networking of states, lack of bilateral trusts among members practicing hedging strategy, and domestic-driven strategy to maintain legitimacy