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The Right Way to Sanction China

There’s a better way to shape Beijing’s behavior

by Zack Cooper & Eric B. Lorber

OVER THE LAST five years, the United States has struggled to influence Chinese behavior. Washington’s responses to Beijing’s increasingly assertive activities—ranging from economic espionage to artificial island construction—have been largely ineffective. Yet U.S. leaders are now considering a new option: economic sanctions. Conventional wisdom holds that the U.S.-Chinese economic relationship is “too big to fail” and that Washington therefore has little economic leverage with Beijing. Indeed, U.S. policymakers should be realistic that extensive sanctions against China would be unwise and infeasible. Nevertheless, certain limited, conduct-based sanctions may be able to shape Chinese behavior at an acceptable cost.
The surprising aspect of the debate in Washington over whether to sanction China is that it took so long to emerge; within the last decade, the United States has sanctioned every one of its major national-security concerns other than China. Iran, Russia, North Korea and terrorist groups have found themselves facing not only U.S. unilateral sanctions, but extensive international sanctions regimes. Acknowledging the need for more effective policy options, President Barack Obama issued an executive order providing the Treasury Department authority to sanction state and nonstate actors—including Chinese entities—engaging in malicious cyber activity. Last year, the administration threatened to impose sanctions on a number of Chinese persons in the lead up to President Xi’s state visit. Likewise, various presidential candidates have suggested that the United States impose sanctions against Chinese agencies or businesses involved in cyber attacks against economic targets.
Yet China is not Russia or Iran, and trying to impose an extensive sanctions regime on Beijing would be both unwise and ultimately ineffective. Given China’s global economic importance—notwithstanding its recent economic troubles—U.S. policymakers would struggle to attract the international support required to implement an extensive sanctions regime in response to cyber attacks or regional coercion. In addition, unlike the Russian or Iranian economies, which are dependent on energy exports, the Chinese economy is highly diversified and would be much more resilient to sanctions. Even if such sanctions could be constructed, China has the economic heft and political influence to hit back and do real damage to both U.S. companies and broader U.S. interests. If Beijing viewed extensive economic sanctions as an effort to undermine the economic basis of the Chinese Communist Party’s rule—particularly in the aftermath of China’s recent economic stumbles—Beijing’s response could be highly escalatory. In short, China’s global importance and its enormous economy inoculate it against the type of extensive sanctions levied on Russia and Iran.
Nevertheless, the United States has a set of more targeted economic options for shaping Chinese behavior. These options would need to be limited and designed to deter or reverse specific destabilizing activities undertaken by Chinese individuals, companies or agencies. While these options are far from perfect, they may provide policymakers better responses than threatening to use military force—or watching idly as China alters the status quo.

Source: Defense News

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