CHINA WATCHProtecting U.S. Allies and Partners from Chinese Economic Coercion
China’s growing willingness to defy the international order, and its increasingly aggressive leadership, have led it to increasingly utilize economic coercion against countries it believes have defied China’s interests. This coercion can be powerful, and the United States and its partners have not been well-prepared for Beijing’s actions. The U.S. and others need to develop a response immediately.
Even as China’s economy faces massive domestic problems, from sluggish consumer demand to industrial overcapacity, its leadership, headed by the increasingly assertive and nationalistic Xi Jinping, has continued a strategy of applying intense economic coercion to countries it feels have disregarded China’s major interests.
As the Australian Strategic Policy Institute (ASPI) and others have noted, Beijing usually applies economic coercion—while consistently denying it is doing so—when it feels its core interests in international relations are threatened. Those core interests can sometimes be blurry, but tend to encompass
· isolating Taiwan from the world;
· ensuring that China is not deprived of what it needs to continue long-term economic growth;
· preventing other states from threatening the power of the Chinese Communist Party (CCP), for example, through criticism of its human rights record and authoritarianism;
· preventing threats to China’s security, as in the case of states, particularly in Asia, signing new defense arrangements with the United States or agreeing to play larger roles in patrolling the South China Sea; and
· delivering a message to the world that China acts peacefully in international affairs.
Though the Donald Trump and Joe Biden administrations have taken some steps to bolster responses to Chinese economic coercion and assist smaller countries facing Beijing, they still have no clear strategy or combined political will in place. To be sure, Washington and its key Asian and European partners do have plenty of tools to confront Chinese economic coercion and help defend states subjected to it, but they have often struggled to work together well and played a relatively strong hand weakly. As a result, important states in Europe and Asia (including Australia) are often left to their own devices to save their economies from Chinese coercion. While some have developed effective counterresponses on their own, others give in to some of Beijing’s demands. In so doing, they show China that coercion works and make it more likely that the Xi administration will utilize more economic coercion in the future.
