The Senate Foreign Relations Committee is holding a three-part hearing series under the 'Subcommittee on East Asia, The Pacific, and International Cybersecurity Policy' on a topic it calls "The China Challenge." The first hearing "
The China Challenge, Part 1: Economic Coercion as Statecraft," was held on July 24, 2018, the second "
The China Challenge, Part 2: Security and Military Developments" was held on September 5, 2018 and the third is pending.
The first hearing was attended by two witnesses, Dan Blumenthal of American Enterprise Insititute (AEI) and Ely Ratner of Center for a New American Security (CNAS). During his testimony, Mr. Ratner presented a report prepared by CNAS titled "
China's Use of Coercive Economic Measures." For a better understanding of what is meant by coercive economic measures, here is part of the introduction from Chapter 1 of the report:
China has long used economic statecraft as a pillar of its foreign policy. Historically, Chinese leaders used economic inducements ranging from gifts to the promise of loans and investments to solidify relationships with foreign governments and advance Chinese influence. [...]
In 2013, China launched the Belt and Road Initiative (BRI), a potentially $1 trillion, almost 70-country global infrastructure development initiative that is likely to significantly expand Chinese influence from Asia to Europe. [...]
Over the past decade, however, China has also used the “sharp end” of its economic statecraft, turning to coercive economic measures as a tool. The authors define coercive economic measures as China’s restrictions on trade or investment intended to impose financial or economic costs on a target in pursuit of a foreign policy objective or to influence a foreign government to offer policy concessions to China. As used here, coercion indicates the use, or threatened use, of economic “sticks,” but not the use of positive inducements or other tools, as commonly included in academic definitions.