Wang Hao thrived during her semester as an exchange student in Taiwan. As a native of mainland China, she found it exotic to hang out with Taiwanese students, sitting under a thicket of banyan trees and listening to local bands.

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Sun Yun, East Asia Program senior associate at the Stimson Center think tank in Washington, says China is effectively wielding a carrot-and-stick strategy — or, as she calls it, “economic enticement/punishment.”

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