China Seen as Likely to Increase Use of Export Controls
China is likely to increase its use of economic and trade restrictions, specifically export controls, to penalize U.S. and EU companies that act against its interests, two security and economics experts said. While China hasn’t “extensively” used its newly established export control or sanctions regimes, its recently issued export control white paper and other rhetoric suggest it won't hesitate to soon use those powers more broadly, the experts said.
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The December white paper, which outlined how China has tried to improve its export restrictions and broaden its enforcement powers (see 2112290036), is a signal that China will “absolutely” look to increase its use of export controls, said Emily Kilcrease, a senior fellow at the Center for a New American Security. “I think it’s a pretty important indicator that this is a tool that they see as valid,” she said during a Jan. 7 event hosted by the think tank.
Emily Jin, a CNAS research assistant, said China could look to bolster its use of export restrictions to retaliate against third-country sanctions. “China is maybe willing to deploy the widest range of economic tools in response to a geopolitical conflict,” Jin said, adding that China has the “most expensive toolkit” among the world’s major countries.
Not only is China prepared to impose more traditional economic restrictions such as export controls and sanctions, Jin said, it also can encourage boycotts of foreign companies through state propaganda. “It's generally not afraid to deploy official and unofficial measures,” Jin said. “So just my quick gut response is yes, we could see an increase in intensity or use of coercive policies in export controls.”
Kilcrease specifically pointed to a case in 2020 in which China used its export controls to restrict technology associated with TikTok, the video-sharing application owned by China-based ByteDance. The controls were issued after the Trump administration banned U.S. transactions with the company (see 2008240031). “That’s a pretty clear example that that's something that they do intend to use if the particular situation seems to warrant it,” Kilcrease said.
China also passed a new law last year to counter foreign sanctions, another indication that the country is looking to bolster its ability to retaliate for foreign economic coercion, Kilcrease said. Even if China's regimes "aren't used extensively, the fact that they're setting them up is an indication that someday they might be used," she said.
Although the U.S. also uses export controls and sanctions, it does so in a way that abides by international laws, said Rep. Ami Bera, D-Calif. Bera pointed to U.S. sanctions against Iran, which he said aren’t aimed at the Iranian people but are instead intended to force the Iranian government to negotiate a nuclear deal. “What [China is] doing really is direct coercion,” Bera said during the event. “When I think about our use of sanctions and so forth, they're usually used as temporary measures to get folks to the table to achieve some other good.”
Bera in October helped introduce the Countering China Economic Coercion Act, a bipartisan bill that would create an interagency task force to streamline U.S. tools for deterring Beijing’s economic coercion (see 2110180036). He said the legislation would allow the U.S. to “study” how China is implementing its sanctions regimes and “come up with the best practices” to respond. Bera said he is confident the bill will soon be moved to a committee for a vote. “It’s noncontroversial, bipartisan,” he said. “There shouldn't be any issue, whether we're able to move it as a stand-alone bill or just attach it to something else.”