It’s China 1, USA 0 when it comes to so-called “economic warfare.”
As China has risen to become the world’s No. 2 economy, it has repeatedly used its business and financial clout to get what it wants on the world stage, say foreign policy experts Robert Blackwill and Jennifer Harris.
When Norway gave Chinese dissident Liu Xiaobo the Nobel Peace Prize in 2010, China dramatically scaled back its salmon purchases from Norway and halted trade talks. When tensions escalated between the Philippines and China over a territorial dispute in the South China Sea, China let Philippine bananas rot in its ports.
Over the years, Beijing has retaliated so strongly by cutting (or threatening to cut) business ties with any nation recognizing Taiwan that only 22 nations still formally call Taiwan the “Republic of China.”
These are only a few examples that Blackwill and Harris lay out in their new book, “War by Other Means.” Their thesis is simple: The U.S. should be using similar tactics to China’s — and doing it better. Right now, America is getting crushed.
“Despite having the most powerful economy on earth, the United States too often reaches for the gun instead of the purse in its international conduct,” they write.
China doesn’t just use punitive measures to get what it wants. It routinely gives loans and aid to countries like Venezuela that are at odds with the United States. Beijing also wields its massive sovereign wealth fund to invest — tactically — in parts of the world where it also wants to build political ties.
The U.S. used to flex its economic muscle more
“Geoeconomics tends to be easier and cheaper” than military conflict, Blackwill and Harris write in “War by Other Means.” It’s one of the reasons China, Russia and others are doing it.
A critical time
But in the past 30 years, Blackwill and Harris argue the U.S. has largely stopped using geoeconomics, preferring military force instead. The one exception is sanctions like those against Iran.
It’s a particularly critical time to change that approach, they say, as markets become more global (i.e., what happens with Brexit impacts the world), and countries are reconsidering which economic tie is more important to them: the U.S. or China?
Full article: China is crushing the U.S. in ‘economic warfare’ (CNNMoney)