From Two to Three

Since 2015, China has actively promoted “third-party market cooperation” as a new model of international economic engagement. This approach brings together China, advanced economies, and beneficiary countries to jointly develop infrastructure and construction projects, moving beyond traditional bilateral cooperation framework. Official narratives portray tripartite cooperation as a “triple-win” arrangement that combines China’s manufacturing capacity, partner countries’ advanced technologies, and the development needs of beneficiary countries. While such cooperation promises risk-sharing, resource complementarity, and enhanced project quality, it also introduces new challenges, including higher transaction costs, divergent governance practices, and complex negotiations among multiple actors. Addressing the central question of why stakeholders choose tripartite cooperation and how three-party collaboration shapes project outcomes, the book makes both theoretical and practical contributions. It integrates transaction cost theory, international relations theory, foreign direct investment theory, and infrastructure natural monopoly theory to advance a novel concept of “semi-internalisation.” The analysis provides policymakers, practitioners, and scholars with a framework to understand partner selection, interest alignment, and the evolving dynamics of one of China’s significant yet understudied innovations in global economic cooperation