Chinese researchers are advising the Chinese Communist Party (CCP) on measures to prepare for US sanctions on China in the event of a war with Taiwan, Reuters reported on Friday last week.
“Researchers warn that China’s much larger economy and dependence on foreign technology and commodity imports mean that sanctions on China would be more impactful than those imposed on Russia following that country’s invasion of Ukraine,” the report said.
One researcher said that China should “accelerate the promotion of yuan pricing of commodities such as lithium.”
Another researcher said that China should “blunt sanctions by increasing its economic links with the US and its allies.”
More interdependency would make sanctions a more costly prospect, which would give cause to refrain from such punitive measures, they argued.
With so much of the world’s goods still being manufactured in China, sanctions would mean that the cost of almost everything would go up significantly. Voters in the US and elsewhere would protest, lobbyists would pressure Washington, and opposition lawmakers would seize on the chaos to sow further division in society. China would also ramp up disinformation campaigns.
“Partly in response to this, the EU and US have sought to de-risk and diversify supply chains and on-shore production of chips. But these policies would take time to bear fruit,” the article cited Peterson Institute for International Economics in Washington senior fellow Martin Chorzempa as saying.
This is the crux of all issues related to China and its relationship with democracies. Regardless of whether there is war in the Taiwan Strait, the more interdependent the US and other democracies are with China, the more autonomy those democracies lose. The CCP would always seek to buy off lobbyists and lawmakers, and manipulate policies in a way that favors China, while lawmakers who would show resolve to remove Chinese influence would face fierce resistance from a public fearful of inflation.
The only way forward is for democracies to significantly reduce interdependence with China. Doing that would require an accelerated time frame on moving companies and their manufacturing out of China, which might be possible through a US-EU alliance that would share the costs of moving supply chains, and would implement free trade between alliance members.
Manufacturing in China is about 5 percent cheaper than manufacturing in the US, and Beijing increasingly makes it unfavorable for foreign companies to operate in China through policies such as requiring customer data, trade secrets and technology transfers.
The governments of the US and European countries should facilitate the exit of companies from China by providing incentives like tax breaks and subsidized energy costs, while penalizing those that choose to remain in China through tariffs and other measures. One of the major challenges in convincing companies to move away from China is going to be the growing value of private consumption there, which is now worth US$6 trillion annually, making it a larger market than that of the US.
Taiwan also plays a crucial role in shifting supply chains away from China, and as the country most at risk from Chinese aggression, it also acts as an important role model in making that shift.
Taiwan, the US, EU nations and other democracies must cooperate to form a strong economic alliance to act as a bulwark against Chinese expansionism and hegemony. Only through decreased interdependence with China can democracies truly be strong and remain autonomous.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
The military is conducting its annual Han Kuang exercises in phases. The minister of national defense recently said that this year’s scenarios would simulate defending the nation against possible actions the Chinese People’s Liberation Army (PLA) might take in an invasion of Taiwan, making the threat of a speculated Chinese invasion in 2027 a heated agenda item again. That year, also referred to as the “Davidson window,” is named after then-US Indo-Pacific Command Admiral Philip Davidson, who in 2021 warned that Chinese President Xi Jinping (習近平) had instructed the PLA to be ready to invade Taiwan by 2027. Xi in 2017