The United States of Sanctions
The Use and Abuse of Economic Coercion
In Europe this week, on his first overseas trip since taking office, U.S. President Joe Biden has framed the current moment in world politics as an existential choice between democracy and autocracy, a fundamental decision that, as he put it in a speech in Pittsburgh on March 31, is “what competition between America and China and the rest of the world is all about.” China’s economic success and political durability have indeed demonstrated that development does not require democratization. And as China grows more influential, it may “ultimately present a stronger ideological challenge than the Soviet Union did,” as Kurt Campbell and Jake Sullivan noted in these pages in 2019.
The Biden administration is correct to emphasize the challenges facing democracy around the world, but the more immediate threat to the United States and other democracies lies within, not without. At present, the dangers of conceiving of U.S.-Chinese competition as a global contest between democratic and autocratic systems outweigh the benefits. Domestically, invoking competition with China may seem like an attractive way to build bipartisan support for long-overdue investments at home. But such appeals are unlikely to sway Republican members of Congress and may validate their efforts to cast China as a greater threat to U.S. democracy than Republican efforts to overturn the 2020 election and restrict future voting. No matter how carefully the administration differentiates between the Chinese government and people of Chinese ethnicity, this good-versus-evil rhetoric creates a permissive environment for xenophobia, anti-Asian racism, and violence against anyone perceived as foreign.
The U.S. government should resist the temptation to mirror the ideological insecurity of the Chinese Communist Party (CCP). Casting U.S.-Chinese competition as a contest between systems overstates China’s ideological appeal and undermines Washington’s ability to engage productively with a wide range of governments in Asia and beyond. Simultaneously defending American values and achieving a peaceful—if competitive—coexistence with China requires a more pragmatic approach.
Over the past year, as the United States has been wracked by political turmoil and one of the world’s worst outbreaks of COVID-19, China’s leaders have redoubled their efforts to project strength. Yet beneath Chinese propaganda lies political insecurity and fears of ideological bankruptcy. During the final decades of the twentieth century, as other communist regimes collapsed, the CCP embraced capitalism and tolerated rampant inequality as the price of rapid growth, creating a widening gulf between its founding ideals and its current practices that has exposed it to charges of hypocrisy. The CCP sees itself as locked in an ideological struggle to defend its domestic legitimacy and ward off the threat of democratization. So far at least, its ideological aspirations have been more nationalistic than universalistic, even as its efforts to quell criticism have gone global. These efforts have had a corrosive effect on free speech but do not amount to an existential threat to liberal democracy.
The true sources of China’s foreign policy influence are transactional and coercive, not ideological. In Southeast Asia, for example, Beijing’s behavior reveals no favoritism toward regimes with similar ideological foundations. Like China, Vietnam is ruled by a single-party authoritarian regime, officially communist in orientation but having opened up and undertaken a significant process of economic reform since the 1980s. And yet Vietnam has consistently opposed Chinese activities in the South China Sea, forged its own reform path under single-party rule, and built its own 5G network to avoid partnering with the Chinese technology giant Huawei.
China has found it easier to manage relations with Malaysia and the Philippines, two multiparty, noncommunist regimes. Malaysia is a hybrid regime whose Malay Muslim majority population strongly opposes communism. Still, strong economic ties with China have discouraged the Malaysian government from escalating periodic encounters with Chinese vessels in disputed waters. The Philippines is an electoral democracy, albeit a flawed one. Even after the Philippines prevailed in a case brought to The Hague over China’s claims in the South China Sea, Philippine President Rodrigo Duterte has avoided confronting Beijing and expressed interest in cooperating on petroleum exploration.
The sources of China’s foreign influence are transactional, not ideological
Around the world, Beijing’s “no strings attached” assistance has avoided ideological conditions, other than deference on issues the CCP deems integral to its political survival and territorial sovereignty. As the political scientist Yeling Tan has noted, Chinese economic efforts overseas are “mostly the product of the country’s messy internal politics and not the result of a coordinated master plan.” The Belt and Road Initiative (BRI) has brought Chinese investment and infrastructure development to more than a hundred countries, but local politics and institutions have often trumped instructions from Beijing. For example, the massive Melaka Gateway project in Malaysia was put on hold when the long-time China skeptic Mahathir Mohamad replaced Najib Razak as prime minister in 2018.
In Myanmar, China has acted pragmatically rather than ideologically. Even though political liberalization in the 2010s had led to greater engagement between Myanmar and the United States, China’s BRI initiatives in Myanmar remained active, and China proved to be a useful partner for Aung San Suu Kyi as her government faced international condemnation in response to the Rohingya genocide. Following Myanmar’s 2021 coup, China adopted a cautious stance, favoring a return to order to protect its investments. In Myanmar as elsewhere, China’s geostrategic interests eclipse any ideological commonalities that Beijing might have with its partners and rivals.
Over the last two decades, the CCP has built contacts with more than 400 political parties in over 160 countries. Although Chinese efforts to cultivate future foreign leaders are nominally designed to help ruling parties in other countries hone their survival strategies, many of these exchanges are more like junkets than serious learning opportunities. And even as the CCP uses training sessions to burnish its image abroad, it also relies on Harvard Business School materials to teach project management and evaluation.
These exchanges may also reflect pull factors more than an outward push by Beijing. In Malaysia, for example, members of the former ruling Barisan Nasional coalition have sought counsel from the CCP on governance issues. Despite their distaste for communist ideology, Malaysian officials discovered in the CCP a shared distrust of the United States and interest in “Asian values,” ultimately concluding that it was “no longer a Communist threat to Malaysia.”
Under Chinese President Xi Jinping, China has become more ambitious in its efforts to make the international order more hospitable to its interests. But a world safe for autocracy does not preclude a world safe for democracy. With U.S. experts warning that “our entire democracy is at risk” from new voting restrictions and specious claims of election fraud, repairing democracy is the paramount task in the United States. And while it is important to affirm liberal values abroad, building U.S. grand strategy around fighting authoritarianism could backfire, provoking Chinese escalation on the ideological front—and pushing other countries closer to China.
So far, the CCP has touted the superiority of its system and offered it as an example that other countries can learn from. But the more Beijing sees geopolitical competition as being fought along ideological lines, the more likely it is to prioritize taking steps to weaken democracies. Such efforts could go beyond Beijing’s current exports of surveillance technology and coronavirus-related disinformation campaigns to include more concerted attempts to remake other countries in China’s image. Beijing’s “Wolf Warrior” diplomacy has demonstrated its willingness to amplify domestic criticism within democracies. But intelligence officials have concluded that China has so far refrained from Russian-style efforts to interfere in U.S. elections. Stressing the need to counter authoritarianism worldwide could increase Chinese fears that Washington seeks regime change in Beijing and precipitate even more disruptive moves abroad.
Framing U.S. strategy as a competition between democracy and authoritarianism is also likely to alienate countries that see limited ideological attraction in either the United States or China (and that, in any case, are driven less by ideological affinity than by national interests). And there is the related challenge of how strictly to define “democratic.” On the one hand, it would be counterproductive for the United States to set too high a bar for joining the democratic tent. But the opposite approach—calling partners “democratic” while overlooking their domestic abuses—would dilute the term, opening the United States to charges of hypocrisy and undermining U.S. moral leadership.
A world safe for autocracy does not preclude a world safe for democracy.
Indonesia offers an instructive lesson. It is a strategically important U.S. partner, but its democracy is in a fragile state today: President Joko Widodo’s administration has used repressive tactics to stifle criticism and opposition mobilization, and the Indonesian military plays an outsize role in national politics. Even leaving such issues aside, for Indonesians, appeals to the normative superiority of liberal democracy would not outweigh the immediate economic benefits of trade with China. Many Indonesians are wary of what they view as the excesses of American liberalism and the partisan rancor of U.S. politics. Although they have little appetite for communism, they admire China’s economic success and political stability. China’s approach to Indonesia is focused on deepening trade relations, securing access to natural resources, and deflecting criticism of its internment of up to two million Uyghurs by organizing junkets for Indonesia’s Muslim elites. Yet these measures have not bought Indonesia’s deference to Chinese interests in the South China Sea or assuaged Indonesia’s fundamental wariness of Chinese influence. Indeed, strong economic ties with China rarely create puppet states: cases such as Cambodia, a dictatorship which has proved to be a useful Chinese partner in Southeast Asia, are rare and driven by regional alliance patterns and historical ties.
The final risk is that elevating ideology will push autocracies, China and Russia most notably, to deepen their cooperation. During the Cold War, the United States was most successful when it exploited rifts between the two communist rivals. Today, there is no inevitable “alliance of autocracies,” but framing international politics as a systems contest could have the counterproductive effect of bringing one about.
Although it is tempting to see China’s growing influence as a harbinger of rising authoritarianism worldwide, the more proximate roots of democratic backsliding in most countries are domestic: popular resentment over the perceived loss of power and resources to immigrants, minorities, and robots; “out of touch” political and intellectual elites; economic dislocation resulting from globalization and deindustrialization; and polarization and disinformation fed by a loosely regulated digital sphere.
The United States can defend democracy without making ideology the focus of its approach to China. Internationally, the United States should recommit to leading by example, getting its own democratic house in order. American leaders must recognize that laying the groundwork for consolidated democracy requires more than simply holding elections and that governance reforms even in highly flawed democracies yield palpable benefits. Indeed, even authoritarian countries may have a keen interest in performance-enhancing reforms. A pragmatic focus on governance meets third-country partners where they are, as China has long recognized.
Ultimately, the Biden administration should work to reenvision an open and rules-based international order that is flexible enough to accommodate illiberal and liberal countries alike. China’s rise does not require the wholesale destruction of the existing international order, although China does favor a more conservative version that emphasizes Westphalian norms of sovereignty and noninterference. Yet the extraterritorial clause in the Hong Kong National Security Law and the efforts to intimidate and punish free speech abroad all threaten the principle of noninterference. If China wants to defend a return to a more Westphalian system of mutual coexistence among sovereign states, it will need to curtail these extrusions of “sharp power” into other societies.
Internationally, Washington should focus on tempering the unilateral exercise of covert, coercive, or corrupt power, whether through military, economic, or informational means. The United States should also work to concentrate global attention on common issues such as climate and health, which will have knock-on benefits for U.S. competitiveness and influence. As Anne-Marie Slaughter, the CEO of New America, wrote recently in the Financial Times, “a special presidential fund to combat the HIV-AIDS pandemic accomplished more for America’s reputation in Africa than many direct efforts to combat Chinese influence on the continent.”
Even as the Biden administration builds common cause with other democracies, it should invest in keeping China within a more flexible international order. If Chinese leaders conclude that Washington will never allow Beijing to play a leading role on the world stage, it could lead to precisely the kind of all-out confrontation that the United States must strive to avoid as it resumes international leadership.
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