"China has at least a 70% dependence on the U.S. and its allies for more than 400 items, ranging from luxury goods to raw materials needed for Chinese industries, a new analysis of trade data has found.
Countries could potentially use those products to counter economic pressure from China, but it would require a collective effort on a scale they haven't previously deployed against the world's second-largest economy, according to an analysis of 2022 global trade data by Victor D. Cha of the Center for Strategic and International Studies, a Washington-based think tank.
China has faced criticism for attempting to use its trade heft for political retaliation against countries, targeting a range of products and industries -- from Norwegian salmon and Australian wine to South Korean group tourism.
Beijing denies using trade as a weapon. It has also accused Washington of being the real offender, pointing to the U.S. curbs on tech exports to China as an example.
Countries such as the U.S. and Australia have found themselves in one-on-one trade fights with China. That risk has prompted efforts such as de-risking to friend-shoring that seek to create alternative supply chains that bypass Beijing.
Cha argues that the U.S. and other like-minded countries could collectively weaponize their own trade with China. Doing so would demonstrate a clear and immediate cost to Beijing, he says.
China has at least a 70% dependence on about 412 items imported from the U.S. and allied countries, at a value of roughly $47 billion annually, according to the analysis. Beijing lacks ready-made homegrown alternatives for many of the items.
Virtually all of China's imports of silver powder, essential for solar panels, arrive from Japan, the U.S. and South Korea, according to the analysis. Australia, Canada and the U.K. represent about 86% of China's imports of nickel powder and flakes used for batteries and other electrical components. China imports from the U.S. nearly two-thirds of its grain sorghum used for the traditional Chinese alcohol "baijiu."
The analysis in the International Security academic journal uses data from the United Nations Comtrade database, which tracks official global trade statistics.
The data show how potentially potent the U.S. and like-minded partners could be if they acted together to dissuade -- or even punish -- Chinese economic coercion, said Cha, a former U.S. National Security Council director.
"All of our answers are about playing defense, and none of our answers are about playing a little offense," Cha said. "Two can play this game if you want to."
Countering China has been a growing focus by Washington and its allies. In May, President Biden and the other G-7 leaders issued an unusually pointed communique that promised to "counter malign practices" by China and "foster resilience to economic coercion." The G-7, without mentioning China by name, launched an initiative to respond to cases of economic coercion." [1]
1. U.S. News: Beijing Relies on U.S., Allies for Key Products. Martin, Timothy W.
Wall Street Journal, Eastern edition; New York, N.Y.. 10 Aug 2023: A.4.
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