EU Think Tank Suggests Strong Sanctions on China Over Taiwan Conflict
The European Council on Foreign Relations (ECFR) is recommending that the European Union (EU) impose strict sanctions on China if a conflict arises over Taiwan. This suggestion is detailed in their policy brief titled, ‘Hard, fast, and where it hurts: Lessons from Ukraine-related sanctions for a Taiwan conflict scenario.’
Key Recommendations
The ECFR advises the EU to use its economic power to deter China from invading Taiwan by targeting China’s access to the EU market. The policy brief, written by senior policy fellow Agathe Demarais, draws lessons from the sanctions imposed on Russia after its invasion of Ukraine.
China’s Stance on Taiwan
China’s leader, Xi Jinping, has stated that the reunification of Taiwan with the Chinese mainland is inevitable. One of the worst-case scenarios for this reunification is a Chinese maritime blockade of Taiwan, followed by a full-scale military invasion.
EU’s Economic Statecraft
To prepare for this scenario, the EU needs to consider its economic options against China, including financial sanctions and trade measures. The EU’s threat of sanctions could be significant, as China might not expect all 27 EU member states to unite on sanctions.
Challenges with Financial Sanctions
Traditional financial sanctions might not be effective against China, as the country has been insulating itself from such measures through ‘de-dollarization,’ ‘de-SWIFTing,’ and developing digital currencies. However, trade restrictions targeting China’s export-based economy could still be effective.
Trade Measures as Leverage
By 2028, financial sanctions might not impact China significantly, but trade measures targeting China’s access to the EU market could be a strong leverage point. China’s economic growth relies heavily on exports, which account for nearly 20% of its GDP. A significant portion of these exports goes to G7-EU economies, supporting millions of jobs in China.
Proposed Sanctions
The ECFR suggests that the EU and its G7 partners should impose sanctions on noncritical, finished consumer goods, particularly electronics and low-end goods. These goods make up a significant portion of Chinese exports, and restricting their import could be painful for China while manageable for Western consumers in the short term.
Conclusion
If deterrence fails, the EU should impose sanctions on China quickly and decisively. Gradual sanctions could allow China to build immunity to financial sanctions. The ECFR also urges European policymakers to discuss potential Taiwan-related triggers for sanctions and consider the consequences of reducing trade relations with China.
The European Council on Foreign Relations (ECFR) is an international think-tank focused on European foreign and security policies. They conduct independent research and provide a platform for leaders, activists, and influencers to share ideas and shape Europe’s global role.
Doubts Revealed
EU -: The EU stands for the European Union. It is a group of 27 countries in Europe that work together on various issues like trade, laws, and security.
Think Tank -: A think tank is a group of experts who research and give advice on specific topics, like politics or economics. They help governments and organizations make decisions.
Sanctions -: Sanctions are penalties or restrictions that one country puts on another to try to change its behavior. They can include things like stopping trade or freezing assets.
China -: China is a large country in Asia with a very big population. It is known for its strong economy and is a major player in global trade.
Taiwan -: Taiwan is an island near China. It has its own government, but China claims it as part of its territory. This causes tension between the two.
European Council on Foreign Relations (ECFR) -: The ECFR is a think tank in Europe that studies and gives advice on international relations and foreign policy. They help European countries make decisions about how to interact with other countries.
Agathe Demarais -: Agathe Demarais is an expert who wrote the policy brief for the ECFR. She researches and gives advice on international issues.
EU market -: The EU market is the combined market of all the countries in the European Union. It is one of the largest markets in the world for buying and selling goods and services.
Financial sanctions -: Financial sanctions are penalties that affect a country’s money and banking system. They can include freezing bank accounts or stopping financial transactions.
Trade restrictions -: Trade restrictions are limits on buying and selling goods between countries. They can include things like tariffs (extra taxes) or bans on certain products.
