“China is a disruptor, but not a builder.” If that observation is true, the opportunity to strike a hammer blow against Chinese trade is fleeting. With the dragon rearing its head toward disrupting American influence throughout the global economic theatre, a reasonable administration ought to take immediate action to uphold our national interests. The most sensible, and arguably the strongest, being our ability to use trade as a tool against China.
William Chou, senior fellow and deputy director of the Hudson Institute’s Japan Chair, delivered a lecture at Baylor on Thursday, March 5th about economic competition between China and the United States. Hosted by Baylor’s chapter of the Alexander Hamilton Society, the lecture centered on a simple question: Is Trade a Tool Against China?
China’s economic trading strategy sharply differs from the foundations that guide Western trade policy.
China’s economic trading strategy sharply differs from the foundations that guide Western trade policy. Rather than viewing commerce as a mutually beneficial exchange, Beijing often treats it as an instrument of leverage. “In terms of application in how the Chinese use economic power, they align themselves with coercion,” Chou said. This dynamic can be seen in strategies such as the Belt and Road Initiative, a massive infrastructure program that some argue saddles developing countries with unsustainable debt in exchange for Chinese investment and influence.
Western concern over China’s predatory economic initiatives demands immediate action. Chou argued that the United States still possesses a powerful lever in the global financial system: “American capital markets are our greatest weapon. If there’s one way to really hit the Chinese hard, it is to cut them off from foreign financing.” Foreign investment accounts for a substantial share of Chinese trade – cash flows reach into the trillions of dollars. Combined with measures such as tariffs and sanctions, which have been a common note of the current administration, such limits on Chinese access to foreign capital could significantly constrain Beijing’s ability to expand its geopolitical influence.
Economic competition between the United States and China will consequently hinge primarily on financial power rather than simply manufacturing alone. Global markets operate on access to capital and investment, areas where the United States still holds the upper hand. As Chou bluntly summarized during the lecture, “Unless you control the money, you cannot really change anything.” If Beijing’s ambitions are fueled by access to global capital and expanding markets, then restricting that access may prove one of the most effective tools available to Washington in aligning the future with American interests.
f the United States hopes to preserve its geopolitical position, it cannot disregard its own economic agency in the present battle.
If the United States hopes to preserve its geopolitical position, it cannot disregard its own economic agency in the present battle. The administration must instead recognize what trade has become: an instrument of strategic competition. The Chinese Communist Party has demonstrated a particular willingness to use economic coercion and capture to advance their geopolitical aims, and the United States should not hesitate to respond definitively. Maintaining American influence in the global economy will require more than simply passive participation in the global market. If Beijing continues to treat economic relationships as instruments of geopolitical leverage, the United States must respond forcibly and decisively using tariffs, investment restrictions, and financial pressure to ensure that American economic power serves American strategic interests. If the United States fails to act while the dragon rises, it will find that the moment to strike has already passed.