Posted on: Thursday, 5 May 2022 – 19:48 | Last updated: Thursday 5 May 2022 – 19:48
The United States and its allies have imposed a series of coordinated economic sanctions on Russia for its invasion of Ukraine. It is considered the most comprehensive sanctions against a large and comprehensive economy in more than 70 years. This economy was eleventh in the world. The use of these sanctions has raised questions in Western capitals and Beijing about what similar sanctions would be achieved if they targeted the second largest economy, China, especially during a crisis over Taiwan.
An equally important question is whether Washington and its allies will use similar sanctions against China, including as a deterrent, says Girad de Bebeau, a senior fellow in the economic program at the Center for Strategic and International Studies. It seems that the answer to this question is no, based on Western behavior and preferences during the Ukraine crisis.
De Bebeau adds in a report published by the Center for Strategic and International Studies that the sanctions that target Russia include, finance, imports, exports and travel, and individuals.
In the context of China, the debate focuses on what similar financial sanctions will achieve for China and the financial and world trade sectors. Forbidding large Chinese banks to take advantage of the SWIFT network, cut off their correspondent banking links with the US dollar, or freeze the central bank’s foreign exchange reserves would undoubtedly cause widespread disruption.
Di Bebeau, who joined the Center for Strategic and International Studies after 11 years working in the US intelligence services in the field of economics, says the scenarios are complex, but some comparisons between China and Russia give us an idea of The huge impact such sanctions would have if they targeted Beijing.
By 2021, China’s GDP was almost three times greater than Russia’s, and Chinese banks had 30 times more balances than Russian banks. China is the world’s largest trading economy, and the number one exporter of manufactured goods with a very large margin.
Despite China’s economic weight, it still relies on the US dollar for most of its international financial transactions, making it vulnerable to US financial sanctions, especially if these sanctions are imposed in conjunction with other advanced economies – as is the case is with sanctions against Russia.
De Bebeau says that the actual sanctions path against Russia provides some useful insights into the imposition of such sanctions against China. The sanctions against Russia proceeded in the order of three objectives: deterrence, destabilization and humiliation.
If we compare the strategic conditions that Ukraine is currently facing with those that Taiwan is facing in the case of Chinese action to enforce unification by force with Taiwan, we will find that the two objectives of sanctions – destabilization and humiliation – to a large extent depends on Ukraine’s ability to continue its military operations below land communication lines. It connects directly with the West. The skill and courage of the Ukrainian forces is obvious, but their ability to confront Russian forces also depends on a constant flow of foreign weapons and ammunition.
In the event of any large-scale Chinese military action against Taiwan, any comparable Western flow of military and non-military aid to Taiwan would be more difficult – and perhaps impossible – as Chinese naval and air forces would attempt a blockade on the island even if did not amount to a large-scale amphibious invasion.the series.
Chinese leaders, perhaps more so than Putin, are likely to commit to achieving their military goals once their forces are involved. It is unlikely that Beijing will order military action against Taiwan if it believes that sanctions, including export restrictions, will undermine its ability to continue operations. Beijing will also learn from Russia’s mistakes.
It can be said that any similar Western strategy to impose sanctions on the aggressor and re-provide the other party with what he needs – to fight the aggressor alone – will not be feasible in any scenario specific to Taiwan. On this basis, the two goals of sanctions – destabilization and humiliation – will be conceivable unless Western leaders believe that China’s war effort through sanctions alone will collapse, which is unlikely.
Therefore, the third goal, which is economic deterrence, is reasonable. This is the goal that sanctions clearly did not achieve against Russia. In any case, if economic deterrence fails in any crisis, there is the possibility that US forces will participate directly in the event of a Chinese attack on Taiwan. For political reasons, Washington can impose sanctions for destabilization or humiliation, regardless of their chances of success. But in that scenario, the direct impact of severe sanctions against China could be less economically significant than real disruptions in Asian maritime trade and the course of the war itself.
In general, policymakers should not be complacent or overly complacent about economic deterrence. Western leaders should not deceive themselves into believing that economic deterrence is a substitute for credible military deterrence.