China, Taiwan and the Sanctions Trap

Taiwan and its Western partners, including the US and the EU, are discussing the possibility of imposing pre-emptive sanctions against China to deter any possible future invasion. Sanctions, as a policy, have not been effective historically in achieving desired changes. In the case of China, any pre-emptive sanctions would likely fail to prevent a Chinese invasion of Taiwan, and backfire on those seeking to implement them.

As the US and China continue to engage in a test of wills regarding the future of Taiwan, the Taiwanese government is pulling out the stops to encourage its Western partners to pursue a policy of sanctions-based deterrence to forestall any future Chinese military aggression against the island nation. The US is considering implementing targeted sanctions against China to pre-empt an invasion of Taiwan, with the EU also reportedly considering the matter. Taipei recently hosted a diplomatic gathering in Washington, DC, where it lobbied 60 parliamentarians from Europe, Asia and Africa to pledge to adopt economic-based deterrence policies.

While details remain thin on what proposed sanctions might involve, reports suggest they would build on existing restrictions on sensitive electronic technology such as computer chips and telecoms equipment, designed to impede the development and manufacture of advanced military systems. Also vague are specifics about how such sanctions would be triggered or enforced.

The motivation of those promoting a policy of sanctions-based deterrence against China is clear: to forestall action by China similar to that conducted by Russia against Ukraine. But George Santayana, a US philosopher, famously observed in his work, The Life of Reason: Reason in Common Sense, that “those who cannot remember the past are condemned to repeat it.” In their haste to stand up to perceived Chinese aggression, Taiwan and its partners are embracing a model of deterrence that has not only failed in recent times to prevent aggression, but has backfired against those embracing it. US and European sanctioning of Russia over Ukraine is a case in point.

Policy Trap

By embracing a sanctions-based deterrence model against China, the US, EU and other nations sympathetic to Taiwan would run the risk of falling into a policy trap that would not only fail to achieve the desired outcome — deterrence — but could also accelerate any potential Chinese military action by furthering the notion of an independent Taiwan. Moreover, there is no reason to believe that either the US, the EU, or any potential combination of pro-Taiwanese nations, would be able to initiate and sustain pre-emptive sanctions that could detrimentally impact China to the point of causing that nation to alter a stance on reunification that has been the cornerstone of its public and international policy for decades. Taiwan is not an existential issue for the West; it is for China.

The reality is that any Western policy seeking to alter Chinese behavior vis-à-vis Taiwan is doomed to fail. China is fundamentally committed to reunification with Taiwan, preferably through peaceful means, but, if necessary, through the use of force.

Cautionary Tale

History is replete with examples where sanctions have not succeeded as a vehicle of deterrence or coercion — Iraq, Iran, North Korea and Russia, to name a few. The Russian case, in particular, should stand as a cautionary tale. Nations that joined the US and EU in sanctioning Russia over its invasion of Ukraine are discovering that Russia had a far better grasp of global energy security than they did. Arguably, China has a similar advantage, through its better grasp of global supply-chain issues. To proceed down such a policy path would run the risk of China being able to turn sanctions into a weapon against those imposing them by disrupting supply chains already made fragile as a result of the global pandemic.

For a sanctions-based deterrence model to be viable, the consequences of having sanctions imposed would have to outweigh the consequences of the desired behavioral alterations the sanctions are seeking to achieve. In short, sanctions-based pain would have to exceed the sacrifices China would be willing to make if it were to use military force against Taiwan. China has clearly articulated that it is willing to use force, if necessary, to achieve the reunification of Taiwan with China. Given the high threshold of national sacrifice involved in war, anyone embracing sanctions as deterrence would have to believe that Chinese posturing on Taiwan is little more than a bluff — and that when push comes to shove, China would not engage in direct military confrontation. Political reality does not support such a position.

The question, then, is whether there is a combination of pre-emptive sanctions that could generate a higher degree of national sacrifice for China than war — the consequences of which would be of such existential consequence as to make China forgo foundational domestic and foreign policy. The short answer is “No.”

Vulnerable Economies

Moreover, any effort to pre-emptively sanction China would likely trigger countersanctions that, given the current vulnerable state of many Western economies, could have serious consequences for those initiating the sanctions. Pre-emptive sanctions would, simply put, be a self-defeating measure.

For any sanctions program to be effective against China, there would need to be broad-based support for their strict application from enough of China’s major trading partners to have an immediate impact on China’s economic health. There is little indication of such support. In fact, the recent summit of the Shanghai Cooperation Organization (SCO) showed that, if anything, the tide has turned on sanctions as a politically acceptable policy in many parts of the world, especially among nations outside the US orbit.

One of the main attractions of the SCO is the protection it provides against Western-backed sanctions by providing an alternative economic system virtually impervious to US influence. China and other SCO members are also pursuing collective policies designed to blunt the effectiveness of sanctions, including increasing the use of national currencies for transactions that have historically been conducted with the US dollar. All this is bad news for those promoting Taiwanese independence. However, it could be good news for a peaceful resolution of the Taiwan crisis, if it encourages countries to seek a more rational way forward that avoids a global economic crisis and the devastation of war.

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