Bethany Allen on How China Abuses its Economic Might
Nov 18, 2023
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Bethany Allen, China reporter at Axios, discusses China's abuse of its economic might. They delve into China's unique "party-state capitalism," its impact on global conformity and free speech, and the future of Taiwan.
China uses its economic power to enforce conformity and limit free speech globally.
Strengthening protections for employees' free speech within companies can counter China's economic coercion.
China's economic leverage significantly shapes government policies and actions, as seen in South Korea's case.
Deep dives
China's economic leverage through market access
China has created a sanctions-like regime that uses its economic might and control over market access to incentivize countries and businesses to comply with its rules and avoid crossing its red lines. The Chinese government has effectively shut out companies and governments that challenge its authority, such as Hollywood films that portray Tibet sympathetically. This economic coercion has been consistently enforced over the past 26 years, significantly influencing decision-making and self-censorship.
Challenges for free speech and response
The challenges to free speech and self-censorship in free societies, particularly in dealing with China's economic influence, require careful consideration. One potential solution is to strengthen protections for employees' free speech within companies and binding them with laws that prevent firing based on foreign government censorship demands. By elevating the issue to a government-to-government level, it creates a contest of equals and sets boundaries for companies, giving them the ability to push back within legal frameworks.
Regulating Company Behavior
Passing laws to regulate company behavior and protect against immoral decisions can help counter China's economic coercion. Regulations can include sanctions against companies that actively contribute to censorship or prohibiting the firing of employees due to foreign authoritarian government demands. These measures aim to change the incentive structure for companies and empower them to resist unreasonable demands, ensuring they do not sacrifice themselves while protecting the fundamentals of democracy and freedoms.
Targeting governments through economic influence
China's economic coercion is not just limited to companies, but also targets government decision-making. By leveraging market access, China effectively influences government policies and actions. For instance, in South Korea, China used economic pressure to challenge the installation of a US-made missile defense system. The focused and targeted nature of China's economic leverage allows it to significantly shape government decisions.
The Power of Economic Coercion and Its Impact on South Korea
The podcast discusses how economic coercion from China affected South Korea's national security and interests. A marine technology company in South Korea was penalized for having a deal with Taiwan to provide submarine parts. South Korean authorities claimed it violated trade law and jeopardized national security due to the fear of Chinese retaliation. The episode highlights the need for better multilateral cooperation to address economic coercion.
Potential Scenarios for Taiwan's Future and the Role of the US
The podcast explores different scenarios for Taiwan's future, focusing on the likelihood of a military invasion versus an economic blockade. While a military invasion is less likely, an economic blockade, specifically an energy blockade, is seen as a realistic scenario. The episode emphasizes the importance of US deterrence in preventing China from taking action against Taiwan. It also discusses the upcoming Taiwan election and the different stances of political parties towards China.
In this week’s conversation, Yascha Mounk and Bethany Allen discuss how China’s unique “party-state capitalism” can act both as a boon to and a drag on its economic growth; how China uses its economic power to enforce conformity and limit free speech around the globe; and what the future might hold for Taiwan.
