Employing Economic Statecraft to Meet the China Challenge

Commentary

One should not, however, underestimate the complexities of the China challenge.

So severe and systematic were the CCP’s atrocities that they constituted “genocide against the predominantly Muslim Uyghurs and other ethnic and religious minority groups in Xinjiang,” stated Pompeo. “The governing authorities of the second most economically, militarily, and politically powerful country on earth have made clear that they are engaged in the forced assimilation and eventual erasure of a vulnerable ethnic and religious minority group, even as they simultaneously assert their country as a global leader and attempt to remold the international system in their image.”

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How, then, does the United States effectively sanction heinous conduct perpetrated by a great power with whose economy its own economy—like those of its partners, friends, and allies—is deeply entangled?

One approach takes advantage of the Chinese economy’s deep entanglement with the American economy, which remains the world’s largest. A judicious leveraging of American economic power and deft employment of diplomatic influence would not only impose substantial costs on the CCP for its human rights abuses but also raise the price of Beijing’s predatory commercial conduct and counter its quest to bend world order toward authoritarianism.

The report begins with the forthright assessment that “The United States is locked in a new cold war with the Chinese Communist Party (CCP)—not the people of China.” Like the Soviet Union in the 20th-century cold war, the CCP in the 21st-century cold war seeks preeminence in world affairs by subordinating free nations to its authoritarian norms and practices. In contrast to the Soviet Union, which primarily maintained its empire through military force while suffering from a rickety economy, the CCP relies heavily on schemes of economic cooptation and coercion—anchored in its enormous population, vast productive capacities, and grand commercial undertakings—to bring countries around the globe under its dominion. A one-party repressive dictatorship, the CCP “has become adept at weaponizing China’s position in the global economy in order to gain economic leverage, fuel its military modernization, fund its global illicit activities, and wage all-out economic warfare on the United States.”

To secure freedom at home, counsels the CESI report, “America must now deploy a new global economic strategy, led by the president, that safeguards the American economy and workforce, degrades the CCP, builds new global economic power centers free from the CCP’s authoritarian influence, and preserves U.S. economic dominance.” This won’t be easy: “The deep economic integration shared by the U.S. and the PRC, along with the global economic footprint of both nations, makes the scope and scale of this challenge immense.”

Because of the two great powers’ “deep economic integration,” even the most carefully calibrated economic statecraft will run substantial risks for the United States.

However, the CESI report argues that the consequences of not addressing the threat from the CCP will be much greater than the sacrifices required to combat it. The report outlines “seven presidential actions” as the core of a strategy to address this growing threat.

Firstly, the president should establish a new position within the National Security Council called the “strategic competition coordinator” to lead efforts in executing policies for strategic economic competition with China.

Secondly, a National Security Decision Directive should be issued to guide economic statecraft and protect the American economy from China’s exploitative practices.

Thirdly, a team should be built to manage interagency relations and draw on personnel from various government departments.

Fourthly, targeted measures should be implemented against CCP efforts to control supply chains, dominate industries, steal intellectual property, and undermine international law.

Fifthly, new global coalitions should be formed to counter China’s influence and revise the international system to favor the CCP.

Sixthly, cooperation with Congress is crucial for the success of economic statecraft in competing against the PRC.

Lastly, the president must communicate the urgency of the economic dimensions of the China challenge to the American people and outline a plan for defending the U.S. economy.

This economic statecraft is essential in supplementing the diplomatic and military aspects of the strategy needed to address the China challenge.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.