If Politico is right, the Biden administration is making good on its promise to rope in allies to go after China. The United States, Canada, Britain, and the European Union are set to announce an array of sanctions on China on Monday over a genocidal campaign against Uyghur Muslims, according to Politico.
The report states that if the US and allies do agree on sanctions, it will follow the Russia-inspired sanctions known as the Magnitsky Act, which only punishes individuals. In this case, if the countries went through with it, it would target those involved with the mistreatment of Uyghur Muslims in Xinjiang, a province in far western China.
The problem with individual sanctions is that all they do is bar a person from coming to the United States, using American financial institutions, or buying or selling assets in the US. It is unclear what happens to family members, such as students, who are in American universities while their parents face sanctions.
The US has imposed these sanctions on Russians for at least five years now and the individual sanctions regime against Russians continues to this day, with no significant changes in the behavior of Russia that Washington sought to change. Recently, the US sanctioned individual Russians for allegedly targeting the US 2020 election with misinformation campaigns. This comes three years after imposing sanctions for the same thing.
We do not know if the Politico report is true, or if it is just someone in Washington jawboning over rumors and wishful thinking in hopes to sway decision-makers through the press.
What we do know is that getting allies to agree on ways to confront China will not be easy. Notably absent from the Politico list are Japan and Australia.
Germany, arguably the leader of the EU, is incredibly wishy-washy on China and the UK, which needs foreign markets to grow, is also not willing to irk Chinese capital or the City of London which is one of the biggest global players in the Chinese bond and forex markets.
A New York Times article that ran on Friday does a good job highlighting China’s importance to Germany now. Over the years, many private small and mid-sized businesses were sold to the Chinese that third and fourth generation Germans did not want to take over, opening the door to Chinese capital.
The relationship “has raised concerns that Germany has become overly dependent on China,” Times reporters Keith Bradsher and Jack Ewing reported. “That could be a particularly thorny problem for President Biden, who has made isolating Beijing on trade and geopolitical issues a major part of his overall China strategy.”
Biden should not wait for our allies to make a move on the detention of millions of Uyghurs, not to mention allegations of forced sterilization of Uyghur women to lower their population in parts of Xinjiang, home to a Volkswagen automotive manufacturing facility, polysilicon manufacturing for China’s behemoth, global solar industry and a former set piece for Disney’s Mulan.
Magnitsky sanctions surely did not scare the Russian government. We are actually still debating about the Russia-to-Germany natural gas pipeline called Nord Stream II, which has been sanctioned now going on two years and is still in the process of being built even as some pipe laying companies left. Uniper and Wintershall, both German, are still part of Nord Stream II. As is Royal Dutch Shell, Engie of France, and OMV of Austria.
Sanctions need to impose an economic cost to change behavior. Sternly worded letters and op-eds won’t cut it.
Multinational corporations from the US and Germany will not want good sanctions, nor will London’s biggest investment banks.
“We need to keep in mind that the US has more leverage than any single country in the world. Unilateral action allows us to lead without negotiating with others,” said Michael Stumo, CEO of CPA. “This multilateral effort could either be a good start or it could be weak in an attempt to take the pressure off to do more.”
With South Africa, it took a full boycott to address apartheid embedded in its society. Genocide and mistreatment of those that are not Han Chinese is embedded in Beijing policy. China’s government views them as a threat to civil cohesion, something the CCP thinks could be used by foreign powers against them and make it harder for the CCP to retain power.