China Is an economic bully - and weaker than It looks

For decades, the United States imposed punishing economic sanctions on Sudan, Iraq, and other states it branded as rogue. Outside of military invasion, trade, financial, and diplomatic sanctions became the primary tools for America and its allies to coerce foreign leaders “to start behaving differently” and disarm weapons programs, end support to international terrorist groups, and cease widespread human-rights abuses.

Now China wants advanced democracies around the world to behave differently, too. In 2017, Beijing blocked Chinese tourists from visiting South Korean island getaways after Seoul deployed an American missile defense system. Two years later, it placed trade restrictions on Canada’s agriculture exports to protest the Canadian arrest of a high-profile Chinese executive. After Australia called for an international investigation in the outbreak of the COVID-19 pandemic last year, Beijing responded with a barrage of tariffs and restrictions on its exports. More and more, Beijing is doling out its own punishment on countries that cross its political redlines. The West is learning what it is like to be on the receiving end of economic coercion.

In the face of billions of losses from China’s trade measures, some may see the value in meeting Beijing’s demands to stay quiet on its affairs in Xinjiang, Taiwan, and Hong Kong and stop blocking Chinese foreign investment deals in critical infrastructure. But rather than accept a future under China’s thumb, there are ways to survive and even put a stop to Chinese coercive diplomacy.

In a new article for Foreign Policy, DIIS senior researcher Luke Patey explains China’s economic coercion, its impact, and how to mitigate its risks.