While there is rampant speculation about whether Chinese president Xi Jinping will take military action against Taiwan by 2027, there is 100 percent certainty he will use economic coercion against unsuspecting governments and private companies. Over the past 15 years, China has used economic coercion against 18 countries and over 400 companies, causing tens of billions of dollars in damage, according to a unique data set created at CSIS.
This practice, in particular, has heightened under Xi. If Beijing does not like a neighbor’s statement about Taiwan or Xinjiang or wants to press on a territorial dispute, it will leverage its vast market to intimidate and punish. These actions are generally unannounced and not based in any universal trade rule or domestic law. And this bullying, in China’s eyes, has worked. Targeted countries and firms self-censor on issues like Taiwan, Hong Kong, and Xinjiang for fear of economic retaliation—threats which Beijing bandies about regularly like a mafia boss.
As the Chinese ambassador to New Zealand noted, “An economic relationship in which China buys nearly a third of the country’s exports shouldn’t be taken for granted.”1 China’s weaponization of trade is at the core of its building of an illiberal order. The Biden administration will need to think outside the box in deterring this practice.
