China is using economic pressure as blackmail. US and EU must fight back

For decades, Taiwan has tread a fine line that’s largely suited to everyone: neither being part of mainland China, nor officially declaring independence. The People’s Republic of China could retain its claim on it. Yet Taiwan was free to grow into a vibrant liberal democracy and modern economy. And the democratic world was able to develop relations with both, as long as they did away with the issue of sovereignty and followed the so-called ‘one China’ policy.


But it has changed. Through its actions and the rhetoric of its Secretary-General Xi, China has shown that it is no longer willing to accept the status quo. Similarly, the free world needs to rethink its approach.

During General Secretary Xi’s tenure as leader, Beijing has intensified hybrid attacks on Taiwan. It targets Taiwan’s democracy with propaganda. It throws its diplomatic weight globally, forcing multilateral bodies and institutions to leave Taiwan out in the cold. And it has launched an increasingly aggressive and dangerous military incursion into Taiwan’s airspace.


China is actively threatening democratic Taiwan. To this day, many people in the free world have turned a blind eye to it. They feared Beijing’s threats and economic coercion, and were ready to unilaterally re-define and corrupt what Beijing now calls the “One China Doctrine”. Beijing wants this to mean that no other country can have any economic or political ties with Taipei.

We cannot let this happen.


FILE: Chinese President Xi Jinping attends a welcome banquet at the Great Hall of the People on April 26, 2019 in Beijing, China. During a year-end press conference on December 29, 2021, China’s Taiwan Affairs Office said it predicted more intense. Conflict with Taiwan and the United States in 2022.
Nicolas Asfouri/AFP via Getty Images

Taiwan’s status quo coexists with a US policy that has been described as strategic ambiguity. In short, it can be implied that the United States would support Taiwan if China does attack, but the exact scale and scope of any response has been left objectively undefined.

At times, President Biden has been far less vague in his views. China and Taiwan are an area of ​​foreign policy that unites both sides of the corridor in Washington.

The principle of strategic ambiguity may have worked well in the past. But Xi Jinping’s China is not the China of the past. Some more strategic clarity is needed. This does not mean that the United States should give Taiwan the same security guarantees as the Article 5 mutual defense clause of NATO. But the United States may be less secretive in its support for Taipei.


For the United States, there is a selfishness in defending Taiwan. If Taiwan collapses, the balance of power in the wider Indo-Pacific would be disastrous for freedom and democracy around the world. In this regard, Europe did not sit on the sidelines, criticizing the US for its overly strong approach towards China, allowing all the heavy lifting in the Indo-Pacific, as well as trying to maintain a trading position with Beijing. could. ,

We are seeing some good early signs. Recently, the European Parliament heavily supported a resolution urging advanced ties between the EU and Taiwan, including a new investment agreement. The new German government, with a green foreign minister, has moved more towards a values-based foreign policy. And Lithuania has left a Chinese economic grouping in Central Europe known as 17+1 and opened economic ties with Taiwan. These actions are completely in line with the “one China policy” as they make no claim about Taiwan’s sovereignty.

But China is fighting against the sovereign rights of European states to develop relations with Taipei. In response to Lithuania’s move, China launched economic coercion against the small European state, restricting its exports and tying up more than a thousand containers of goods that Lithuanian businesses already paid for in Chinese ports. was causing supply chain and cash flow woes. Lithuania and beyond.


China has been threatening a NATO ally and member of the European Union to influence its sovereign economic and political decisions. It is a test for the free world. If we leave Lithuania alone against Beijing, this super weapon of economic coercion will be directed at others to force democracies to accept Beijing’s will.

In the short term, we should offer Lithuania credit to mitigate the effects of economic disruption; The EU should signal that China’s actions are distorting the entire EU single market and respond with retaliation.

The European Union is working on creating an anti-coercion tool that will give it the tools to fight against such behaviour. But the real challenge of the EU is not whether it has the right legal instruments; It is whether it has enough political will to defend Lithuania’s right to make its own elections.

In the long term, the free world could create an “Economic Article 5” to blunt the abuse of China’s strategic investments and economic pressure at the geopolitical end. NATO’s famous Article 5 states that an attack on one ally is an attack on all. Similarly, an “Economic Article 5” would support economic coercion from like-minded democracies to support not only NATO allies, but also a broader global coalition—a state or an autocracy to support trade.

Beijing uses its economic power to blackmail countries and corporations because it is effective. It works in the case of fast-fashion brands, which faced boycotts after questioning human rights abuses at Australian winemakers, who have faced swinging tariffs after government relations deteriorated. Russia also uses economic levers to achieve geopolitical goals, in particular by weaponizing its gas supply. We need to neutralize the effects of these tactics by authoritarian states.

Europe and the United States also share a common interest in the Indo-Pacific: keeping it as free, open and democratic as possible. Europe’s role in this may not have been that of dispatching a fleet of aircraft carriers (although it does participate in freedom of navigation missions). But it could also upgrade its political and economic ties with Taiwan, for example, by unblocking a bilateral investment agreement that was put on ice while the EU sought a deal with China. Given Taiwan’s substantial wealth in hi-tech areas such as semiconductors, upgrading economic ties is as much in our interest as Taiwan’s.

Europe and the US must collectively seek a new approach to China – something that the Biden administration offered to the EU even before its opening. Our relations with Taiwan should not be limited to military support or a specific investment agreement; It begs the question of whether we are willing to stand up for the linchpin of freedom and democracy in a region where both are under increasing pressure from autocracy and dictatorship.

Anders Fogg Rasmussen was the Secretary General of NATO (2009–2014) and the Danish Prime Minister (2001–2009). Today he is the CEO of consultancy Rasmussen Global, and founder of the Alliance of Democracies Foundation.

The views in this article are those of the author.