Oct 15, 2021 - World

First look: New bipartisan bill to counter China's economic coercion

Illustration of chessboard with a red and blue piece facing each other.

Illustration: Rae Cook/Axios

A bipartisan group of lawmakers has announced a new bill that would establish an interagency task force to craft a response to China's use of economic measures to further its geopolitical goals.

Why it matters: The draft bill represents growing awareness in the U.S. that economic coercion is a cornerstone of the Chinese Communist Party's ability to project authoritarianism beyond its borders.

  • The bill, spearheaded by Rep. Ami Bera (D-Calif.), chair of the House Foreign Affairs Subcommittee on Asia and the Pacific, and Rep. Ann Wagner (R-Mo.), also underscores deepening bipartisan agreement that China is America's top foreign policy challenge.

Details: The bill lists numerous examples of China's economic coercion, including:

  • Its block on Norwegian salmon imports after a Chinese dissident lawyer received the Nobel Peace Prize in 2010.
  • Restricting Chinese tourism to South Korea after Seoul deployed a U.S. missile defense system.
  • China's tariffs on Australian barley and wine after the Australian prime minister called for an independent inquiry into the origins of the coronavirus.

The task force would include appointments from within the Departments of Justice, Commerce, Treasury, Agriculture, and State, as well as the U.S. Trade Representative's office, and consult with the private sector, industry groups, and NGOs.

  • It would be required to submit a report of its findings, including an analysis of the tools the Chinese government uses to conduct economic coercion, and a list of recommendations on how the U.S. should push back.

What they're saying: "The People’s Republic of China’s (PRC) increasing use of economic coercion against foreign governments, companies, organizations, other entities, and individuals requires that the United States better understand these measures in order to devise a comprehensive, effective, and multilateral response," the bill states.

  • "PRC coercive economic measures [create] pressures for the private sector to behave in ways antithetical to United States national interests and competitiveness."

Between the lines: It's a thorny issue for liberal democracies to formulate policies to counter the Chinese government's use of trade ties and economic dependencies to push its security and political objectives.

  • Liberal political and economic systems are designed to give businesses the freedom to make their own commercial decisions, often making it difficult to regulate the behavior of firms.
  • Many industries are heavily dependent on China for resources, manufacturing, or markets, and don't want to be caught between rival superpowers.

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