Facing increased sanctions and Western trade war, Chinese paramount leader Xi Jinping stated, during the National People’s Congress last week, that Beijing needs to speed up its tech and science development to ensure greater self-reliance. As an example of such a trade war, the BGI group, one the largest genetic analysis companies, was included, last week, to an American “entity list” that limits access to US technology on “human rights” grounds.
Beijing accuses Washington of using this pretext to target Chinese companies. Last month, China in turn sanctioned American businesses over arms sales to Taiwan. In addition, the US is currently seeking allies within the G7 to back further sanctions against China over the latter’s supposed military support to Russia in Ukraine. On March 9, the United States imposed new sanctions against several Chinese companies allegedly supplying parts for Iranian drones that are claimed to be used by Moscow in its Ukrainian campaign.
We live in the age of economic warfare in a world where insulating local industries from geopolitical disputes is becoming increasingly difficult. The sanctions against Moscow, for example, are part of such warfare. However, the Slavic giant is neither North Korea nor Cuba, which means that isolating it from the rest of the world is no easy task. Not only Western sanctions have backfire, but also, as I have written, Russia’s rise in trade with neighbors and its regional allies and partners is reconfiguring international trade. In addition, these developments may ironically boost Eurasian integration and some proposals to further expand it. Could sanctions warfare against China also backfire somehow? One could argue this is indeed a possibility.
Another aspect of today’s economic warfare unfolds in the so-called US chip war - a process which, once again, ironically hurts American allies, namely Taiwan, South Korean and Japan, while in fact endangering the global microchip industry itself. Be it Russia or China, sanctioning, “containing” or “isolating” Eurasian Great Powers is not a simple thing: regarding semiconductors, for instance, too many supply chains for them are connected to Beijing, which remains the US third largest market for exports.
The deindustrialized post-pandemic world is witnessing the re-emergence of economic nationalism. This is in itself a very dangerous scenario, in that it makes economic warfare even more dangerous, by turning things into an existential challenge for the targets of it, thereby “cornering” them - be they rivals, enemies or even partners and allies.
In the US, this new economic nationalism materializes into aggressive protectionist policies, such as its “subsidy war”, which has hurt Washington’s main Atlantic allies, namely Europe as a whole - to the point of French President Emmanuel Macron warning about the risk of it “dividing the West”. One can thus see, in Asia and in Europe, - a certain pattern. This in turn is part of a larger picture: it is about the United States hurting and harming its partner and allies in a variety of ways.
“Irony” is the key word here: China has made geoeconomics the very core of its geostrategic approaches, with the Belt and Road Initiative and other such projects, whereas the American superpower keeps dangerously weaponizing its economic and financial policies so as to “counter” both Moscow and Beijing while also damaging close partners in the process. Ironically, the more Washington employs such economic leverage to coerce other nations, the greater the incentive to come up with alternatives against the American world order and the dollar itself. The risk of backfiring encompasses economic as well as diplomatic endeavors, as one can see in the Pacific. Be it across the Atlantic or the Pacific, whenever the US pressures its European and Asian partners to “choose” between them and China, it actually risks injecting friction eroding trust.
This is so largely because Washington, still framed by a cold war mentality, typically expects “absolute allies”, whereas the emerging polycentric globe makes room for rather diversified bilateral relations - not only in the broader Indo-Pacific region, but actually on a planetary scale, as one can already see in Africa, for example.
Throughout History, all declining powers have grown tremendously aggressive in their final stages. Such fury is no strength but rather a sign of weakness. What anyone can see is an overextended and overburdened Atlantic power trying to contain and “encircle” its two rival giants at once, and moreover bringing the planet closer to a world war. As the proverbial pelican, it may lose its beak when it tries to swallow too big a fish.
Washington’s foreign policy in the pursuit of the “American Century” and the maintenance of unipolarity, has at times oscillated back and forth, in a pendulum-like manner, between “countering” either China or Russia - or both, if possible, as US President Joe Biden seems to have it. At times, however, it would appear that the United States, in a kind of “plan B”, would prefer to push for a new bipolarity rather than welcoming the emergence of any new multipolar global order.
The so-called “Ukraine fatigue” lingers on, with the (increasingly undeniable) failure of anti-Russian sanctions. Moreover, upon facing the hard geopolitical and geoeconomic realities pertaining to the challenges posed by dual containment, the United States might indeed invest on Sweden and Finland NATO membership to pivot to the Pacific. Could then Hillary Clinton’s concept of the “Pacific Century” make a comeback?
That would mean, and here comes the pendulum again, focusing more on China and Taiwan, instead of Russia and Ukraine. The sanctions being advanced against Beijing could therefore be a sign of such a potential new development. The problem, from an American perspective, is that this could also be a repetition of the same mistakes all over again, with sanctions backfiring, alienating partners and boosting Eurasian integration.