The Art of Economic Coercion: How China is Dominating Global Diplomacy

A recent report suggests that since 2020, Beijing has increasingly utilized trade restrictions and intimidation tactics to safeguard its geopolitical interests worldwide, with economic coercion now being considered a well-established and preferred component of China’s foreign policy.

This is noteworthy because China’s use of economic coercion stifles global criticism of Beijing and makes it more challenging for countries to maintain the liberal international system that promotes open trade, rule of law, and human rights.

The Australian Strategic Policy Institute’s new report titled “Countering China’s Coercive Diplomacy” revealed that from 2020 to 2022, China employed various economic pressures to target 19 countries as well as the European Union.

The report revealed that Australia, Lithuania, and South Korea were the most focused countries, with Europe as the most targeted region overall. The documented cases of coercion from 2020 to 2022 numbered 73, encompassing restrictions on trade, investment, and tourism, cyberattacks, boycotts, state-issued threats, and sanctions imposed on individuals.

Nations were typically targeted for engaging with Taiwan, expressing concerns over China’s response to the pandemic, condemning Chinese government oppression in Xinjiang, or crossing other red lines imposed by the Chinese Communist Party. According to the report, Beijing’s coercive techniques “erode the rules-based international order and possibly act as a warning to governments, businesses and civil-society groups that have witnessed the PRC’s coercion of others and do not want to become future targets.”

The report goes on to say that “this may result in decision-makers being hesitant to safeguard critical interests, support human rights or align with other countries on crucial regional and global problems.” The report suggests that democratic countries establish an international task force to combat coercion, commonly referred to as an “economic Article Five” or mutual economic defense pact. This would enable each other to provide assistance if targeted by Chinese government coercion.

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