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Reviews |  What Game Theory Says About China’s Strategy

On March 19, 1956, The New York Times interviewed Matyas Rakosi, who has been described as “Hungary’s hot communist patron”. Rakosi said his enemies accused him of using “salami tactics,” that is, cutting all opposition slice by slice. He did not deny it: “It is the job of any good political party, including the Communists,” Rakosi said.

Salami slicing may have originally been a metaphor in Hungary, but over the decades since it has entered the vocabulary of politicians, military tacticians and editorial writers far from the banks of the Danube.

China, for example. In August, The Global Times, a newspaper published under the auspices of the Chinese Communist Party, wrote: “The Biden administration has gradually strengthened its ties with the island of Taiwan using salami-slicing tactics. China itself has been accused of salami-cutting tactics with its encroachments in the waters around Taiwan, in the South China Sea and on its border with India in the Himalayas. (The Chinese term for slicing salami is “can shi,” which means to nibble like a silkworm.)

Economics, especially the discipline known as game theory, has a lot to say about slicing salami. The strategy is to move against an enemy in small increments, always staying below the threshold that will cause a response.

Thomas Schelling, the game theorist who received the Nobel Prize in Economics in 2005, memorably described the strategy in his 1966 book, “Arms and Influence”:

“The salami tactic”, we can be sure, was invented by a child; whoever first exposed the adult version had already understood the principle when he was little. Tell a child not to go in the water and he will sit on the bank and dip his bare feet; it is not yet “in” the water. Nod, and he will get up; he is no longer in the water than before. Think about it and it will start to flounder, without going any further; take a moment to decide if it’s different and he’ll take it a step further, arguing that since he goes back and forth, everything is average. Very quickly, we call on him not to swim out of sight, asking ourselves what happened to all our discipline.

A counter-movement against slicing salami is to draw a red line: so far and no further. Announcing your red line is not just communication; the announcement itself strengthens the obligation by making it more difficult to withdraw, writes Schelling in “Arms and Influence.”

To be effective against salami slicers, however, engagement has to be more than chatter. Otherwise, the salami slicer will not be discouraged. Syrian President Bashar al-Assad managed to call President Barack Obama’s bluff after Obama promised in 2012 that any use of chemical weapons by Assad would cross a red line. Assad remains in power today.

Having a reputation for being a little bit crazy, and sometimes overreacting, is another way to deter a salami slicer. As Schelling puts it, “If one cannot buy clearly identifiable and fully reliable tripwires, an occasional haphazard trap can serve much the same long-term goal.”

This brings us back to Hungary’s Rakosi, the original salami slicer. Rakosi, a Stalinist, thought he could gradually extinguish the opposition. But he misjudged. Just four months after being interviewed, he was forced to resign and leave for the Soviet Union. And just three months after that, Hungary erupted in a short-lived uprising against the Stalinist rule that Rakosi had led. Sometimes salami refuses to be sliced.

5.9 percent

The change in China’s industrial production in August from the previous year, according to an estimate from Action Economics of Boulder, Colorado. This would be down from an annual change of 6.4% in July and 8.3% in June. Chinese production has been limited by “flooding, rising raw material costs and anti-pollution restrictions,” according to FocusEconomics of Barcelona, ​​Spain. The National Bureau of Statistics of China will release the official figure tomorrow.

“Money makes the world go round.”

– Fred Ebb, lyrics to “Money, Money” from “Cabaret” (1966).

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