Deterring Chinese Economic Coercion
May 10, 2023
The global impact of the loss of Russian energy and other commodities after its invasion of Ukraine shows that a number of countries can potentially engage in economic coercion. But the People’s Republic of China (PRC) deserves the most attention due to its economic size and breadth, dwarfing nearly all of the partners it might seek to harm. Examples of Chinese economic coercion reveal a willingness to target US treaty allies, and thus call for consideration of American policy responses on those occasions.
For the purposes of this testimony, coercion is international – one country using economic means to pressure another to change its behavior. It can be a two-edged sword, with opportunities lost on both sides. Possibly the most important feature of Beijing’s coercion to date is economic costs to the PRC have been tiny (due in part of course to size). One implication is that the US can deter China in at least some instances by threatening to raise its costs to a noticeable level. Our intervention to do so would have to be seen as credible. And this credibility can be established through bipartisan legislation authorizing a flexible set of responses that can be initiated quickly.
