GT Voice: Don’t underestimate China’s decision to push back on US sanctions

Description: Liu Rui/GT

Description: Liu Rui/GT

Although high-level exchanges and constructive communication between China and the US have sent some positive signals, it does not seem to have slowed the US from imposing sanctions against China. But that doesn’t mean China will just roll over and take careless US crackdowns.

No one can underestimate China’s determination, bolstered by US ratchet-up pressure, to protect its own legitimate interests and resist US hegemony when China needs to.

China opposes the US launching a trade or tech war under the guise of competition and will not defeat the competition, but the so-called competition from the US is clearly unfair, Chinese Ambassador to the US Xie Feng said at the Aspen Security Forum on Wednesday.

The Chinese people will not remain indifferent, and the Chinese government will not sit back, Xie said.

His remarks come as the Biden administration is reportedly preparing an investment screening mechanism designed to reduce the amount of US money invested in Chinese entities involved in areas including semiconductors, quantum computing and artificial intelligence (AI).

Also, the US Commerce Department plans to update some export controls to make it harder for Chinese companies to get AI-related chips from companies like Nvidia.

Under such circumstances, how to improve the China-US economic and trade relationship, which is perhaps the most important economic relationship in the world but seems increasingly antagonistic, has become the focus of attention in the international community.

As Washington pushes Beijing into a corner, it also reduces its own room for maneuver, especially as China realizes that communication alone will not stop the US from increasing pressure on it, and it is time to try a different tactic.

The US has placed more than 1,300 Chinese companies on various sanctions lists, and the list of names may grow. In the face of continued US crackdown on trade and high-tech exchanges with China, the response from the Chinese side has been largely restrained, as China seeks to prevent the resulting relationship from derailing by strengthening communication and cooperation.

But such goodwill should not be ignored and interpreted as a lack of means to push back. If the Biden administration is committed to an adversarial economic relationship with China, then from the perspective of protecting its own economic and corporate interests, it is important for China to take counteractions.

Some legislative developments may offer some guidance on what China can do to fight back. For example, China’s Foreign Relations Law, which took effect on July 1, states that China has the right to take necessary measures in accordance with the law against activities that violate international law and the basic norms governing international relations and endanger China’s sovereignty, security and development interests.

Also, China established the Unreliable Entity List mechanism, which aims to combat unilateralism and protectionism. The criteria for listing include foreign entities that block and close supply chains, take discriminatory measures for non-commercial reasons, and cause actual or potential harm to Chinese companies and industries.

All of these bills can serve as a reminder for foreign entities that they should not blindly submit to US sanctions against China. If they participate in US sanctions, China’s evasions may cause them to lose the Chinese market or see their interests hurt in the Chinese market. Potential risk is a factor to consider in their decision-making, which is also China’s way to offset the impact of US sanctions.

Of course, China will lose if it retaliates in the same way that the US has hit China. However, if this is the only way to protect China’s interests, losses may still be necessary.

There is no going back if China decides to take these steps. Washington has been advised to change its China policy before it is too late.

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