Abstract: China’s rise presents a daunting dilemma for many Asia-Pacific states. What has not been fully appreciated is that many of China’s neighbors confront the dilemma of “close economic exchange with a threatening state” (CEETS). If they continue CEETS, it strengthens the threatening state’s economic and military power, jeopardizing their security. However, ending CEETS can cause their own economies to decline, deteriorating their national power and destabilizing their governments. Dominant theories such as realism and liberalism have not adequately explained security problems caused by CEETS, its origins, and potential countermeasures against it. This article examines these issues, focusing on the Asia-Pacific. Although there is no single panacea against CEETS dilemma, a regional agreement such as the Trans-Pacific Partnership (TPP) could be a promising countermeasure against it.
