Will Biden Turn the Sanctions Weapon on China?

Will Biden Turn the Sanctions Weapon on China?

For every sanction America imposes, China will impose another in its turn.

 

I once attended an international conference in the mountains of Colorado, a U.S.-China dialogue, where I had the opportunity of listening to an elderly Chinese lady talk about international affairs. She was the translator for Mao Zedong in the late 1950s and early 1960s when he was engaged in intensive discussions with the Russians, privy to some very intimate tête-à-têtes. She related that Mao was made furious by the way that Soviet leader Nikita Khrushchev and other Russians talked to him.

It’s been nearly twenty years, but this was the gist of her characterization. Khrushchev to Mao: “We are big brother; you are little brother. We are the leaders of International Communism, the fathers of the Marxist-Leninist church and the vanguard of the people all wrapped in one. We will listen to you, of course, and take your concerns seriously, but you are to follow our decisions once made. World Communism cannot survive without unity in the camp. You may not quit the camp; you are to follow and obey. Because we see further than you, because we know more than you.”

 

The conference occurred after the outbreak of the March 2003 U.S. invasion of Iraq, about a year in. She was making the point that this way of talking was not appropriate in the world of diplomacy. States had a right to their independent view. She noted that President George W. Bush had a habit of talking that way. She objected to it. Waiving aside any remonstrance to her statement of the obvious, she would remark, “It’s common sense.”

I liked this lady, a diminutive woman probably then in her mid-sixties. Her historical observations were a revelation to me, as suddenly the Sino-Soviet conflict of the 1960s came into clearer view. It wasn’t just about boundaries and nuclear weapons and the struggle for the developing world. It was about the condescending way the Russians talked to the Chinese. Arrogance, she intimated, cometh before the fall.

Everything she said about the Iraq War (she was not a fan) seemed like cold hard truth. She was generally plain-spoken, using words that a peasant would understand. Not that all the attendees understood it. Larry Diamond was there, back from trying to build democracy in Iraq, an enterprise he felt at that time was the most important thing in the world to do, but which caused him endless frustration because the Americans were doing it all wrong. Diamond and those in his camp apparently never got the message that there’s no way of doing it right. A 500-pound bomb is not “fit for purpose.” Such methods do not appear in Robert’s Rules of Order. Building a democracy through war is like making a pyramid stand by inverting it.

China Gets a Talking To

On Sunday, March 13, National Security Advisor Jake Sullivan appeared on the talk shows and made it clear how he was going to talk to the Chinese. “We are communicating directly, privately to Beijing, that there will absolutely be consequences for large-scale sanctions evasion efforts or support to Russia to backfill them,” Sullivan said. “We will not allow that to go forward and allow there to be a lifeline to Russia from these economic sanctions from any country, anywhere in the world.”

After action reports of Sullivan’s seven-hour meeting with top Chinese envoy Yang Jiechi said the conversations were “intense.” By that, we may infer that threats were exchanged.

In the Chinese readout of their phone call of March 18, President Joe Biden and Chinese leader Xi Jinping took the high road, restating common principles and disavowing hostile intentions, but important parts of the exchange were disharmonic. Biden “described the implications and consequences if China provides material support to Russia” and warned Xi that he didn’t want to suffer the same sanctions as Putin. Xi answered with an old Chinese saying: “Let he who tied the bell on the tiger’s neck take it off.” The U.S. plan is to enlist the entire world in the Total Economic War Against Russia (TEWAR). Those who do not take part will be sanctioned. China, one would have to assume, would be sanctioned most of all, because China is most in the position to give Russia assistance.

Washington has been warned for two decades by “realists and restrainers” that a renewed compact between Russia and China would not be good for America’s geopolitical position. In geopolitics, the idea is to keep your adversaries from uniting against you. Officialdom rejected that advice, pursued policies against Russia and China that convinced both that Washington regarded them as permanent enemies. Having failed to prevent them from becoming permanent allies, Washington now seeks to split them apart. China is to stand aside as Vladimir Putin falls.

This is a most unlikely outcome. China does not wish to take sides in the Russia-Ukraine conflict. Its official policy is neutrality. As a mediator, it would recognize some Russian claims, but not necessarily all. It is unlikely to play much of a role in that capacity, because it is not trusted at all by the West. How China will respond if America imposes big sanctions is not predictable in detail, just in general: they will respond proportionately as they understand it, though not necessarily in ways that Americans would find proportionate. In the arena of economic warfare, there are no “redlines” that are established. What is moderate and proportional to the one may seem cruel and unusual to the other.

Dynamics of Escalation

In economic war, the same dynamic of escalation occurs as in real war. That is driven not necessarily by optimism about the consequences of moving forward but often by fear and trepidation regarding the consequences of retreat. A classic example is decisionmaking during the U.S. escalation of the Vietnam War in the mid-1960s. Leslie Gelb and Richard Betts famously argued after the war ended that officialdom had realized they were embarking on a losing effort. Lyndon B. Johnson and his team had considered it carefully, knew it was a quagmire, saw the cruelty and pointlessness of the enterprise from the outsetand then went in anyways!

Why so? Losing right then looked a lot worse. This is sort of like being dragged butt-backwards by your suspenders into a fight. A perverse dynamic, the reader may observe; yes, but very powerful, especially in the American experience.

In the coming boxing match over sanctions, in one corner stands China, the center of world manufacturing, who for over thirty years has built a formidable, productive machine. It has commercial satellites all over Asia and beyond, tied to its supply chains. It makes things the United States cannot do without. In the other corner stands America, of formidable financial weight, whose dominance in world finance has leaped ahead of others in the last ten years. Look at the respective returns for an investor in American versus European or Japanese equities over the last decade.

Russia has been an important player in several sectors of the commodities trade, especially in energy, metals, and grain. The disruptions caused by the Total Economic War Against Russia (TEWAR) alone would be enough to send the world economy into a tailspin. In the coming contest, however, Russia is a minor player, China is a major player. It has strengths in that regard much more formidable than Russia’s. It will not necessarily lay all its cards on the table; some of its actions which are intended to be sanctions may not be represented as such, as with the sudden closure of a factory making essential parts for reasons other than their intended coercive effect. It is a fair bet, however, that for every sanction America imposes China will impose another in its turn.

Grim Tide Rolls On

A crucial feature of the TEWAR is that it intrinsically cannot be limited to one country and one sector. Its nature is ravenous; it will extend to all countries and all sectors, just like Covid-19 did. This is an inexorable consequence of stated U.S. policy. No more neutrals, every country must choose, you’re either with us or against us.

This dynamic is most unlikely to be arrested by a political settlement in Ukraine. Though highly desirable, it confronts an iron barrier. The West will not accept any settlement that can be seen as rewarding Putin for the use of force. Putin is not going to accept an outcome worse than the prewar status quo. Therefore, no agreement. In this hot phase of the new Cold War, it is only the line of future confrontation that is obscure, not its existence. That means the sanctions are, for all practical purposes, permanent.

The Biden administration’s political advisors must deeply fear a trade war with China, linked to the battle between Russia and the West. Yet this course happens to be the one on which the administration is set, unless the president and his team are to eat their words.