Just Do It: Explaining the Characteristics and Rationale of Chinese Economic Sanctions

It is no surprise that China, as a growing power, uses sanctions as a tool of economic statecraft. When the Dalai Lama visited Mongolia in November 2002, China imposed a swift but comprehensive two-day sanction by severely restricting the flow of people and goods across the Sino-Mongolian border.1 The Chinese Ministry of Foreign Affairs denied that the closure had anything at all to do with the Dalai Lama’s visit, stating that some trains were halted because of unspecified “technical issues.”2 Ten years later, in 2012, China banned the import of Filipino bananas following a territorial dispute with Manila over the Scarborough Shoal, a triangular atoll featuring a large lagoon encircled by coral formations in the South China Sea. In November 2021, Lithuania permitted Taiwan to establish a de facto embassy in Vilnius. In response, China asked several multinational firms to cut ties with Lithuania.3 In August 2022, when U.S. House Speaker Nancy Pelosi visited Taiwan, Beijing imposed economic sanctions on the self-governing island country, claiming that its fruit and seafood exports bound for mainland China were infested with bugs.4

In all of these instances, the sanctions were characterized by their ambiguity. China did not explicitly identify the sanctions as specific responses to perceived national security threats. All were enacted without prior warning. Two of the cases were officially described as pest control. And in the cases of Lithuania and Mongolia, China denied it imposed sanctions at all.

Sometimes, China does threaten sanctions in advance, but does not follow through. When the United States sold weapons to Taiwan in 2010, 2015, 2019, and 2020, the Chinese Foreign Ministry only issued official and explicit threats of sanctions against U.S. companies involved in the weapons transfers.5

How should we understand this behavior? After all, it stands in stark contrast to ways other major powers approach sanctions.

While both China and the United States use sanctions as a tool of economic statecraft, those issued by the U.S. government tend to be signaled and announced publicly and coordinated between the legislative and executive branches. Similarly, sanctions issued by the European Union are imposed explicitly through an open legal process. And even for Russia, it is federal legislation that allows the Russian government to impose economic sanctions against foreign states and entities.6 By contrast, as my new dataset demonstrates, of the economic sanctions that China used between 1990 and 2023, the vast majority of those executed (87 percent) were not officially acknowledged as sanctions and only a minority (13 percent) were threatened but not executed.

The data show us that Chinese economic sanctions tend to be vague and not explicit — that China rarely threatens sanctions and just goes ahead and enacts them. What explains these vague and executed Chinese sanctions? Under what circumstances are Chinese sanctions explicitly announced? Indeed, the vagueness of most of China’s sanctions and its preference for direct implementation over explicit threats of sanctions are what make China’s sanctions behavior puzzling.

Using primary sources and interviews with former Chinese officials for detailed case studies, I argue that Chinese decision-makers usually opt for the “just do it” route for two reasons. First, many of China’s economic sanctions involve sensitive political issues — for example, the status of Taiwan and the treatment of Chinese political dissidents. These cannot fall under the national security exception of the General Agreement on Tariffs and Trade of 1947 (the predecessor of the World Trade Organization, hereafter referred to as GATT 1947), which permits states to enact trade protection based on perceived national security concerns.7 Vague sanctions, therefore, are intended to provide China a measure of plausible deniability to help it appear to be in compliance with World Trade Organization rules. China believes that making sanctions unannounced will shield it from running afoul with international economic institutions like the World Trade Organization, because this approach provides ambiguity regarding whether the Chinese government imposed sanctions when they were not explicitly announced. For example, as Yeling Tan notes, World Trade Organization rule violations can be challenged formally through the dispute settlement system and informally through pressure exerted at committee meetings — as well as the China transitional review mechanism, a specific mechanism ensuring that China makes due progress on adopting all of the necessary provisions that are required of any World Trade Organization member.8 It is only when China can plausibly argue that economic sanctions are imposed based on the national security exception in World Trade Organization rules, such as in the cases of U.S. weapons sales to Taiwan, that Chinese economic sanctions are explicitly announced.

Second, per Thomas Schelling, actions speak louder than words. Since China typically does not acknowledge its sanctions explicitly as sanctions, it cannot threaten them in advance.9 And so by simply enacting sanctions, China intends to send signals not only to the target of the sanctions but also to third parties who might challenge Beijing’s interests in the future or may already be doing so. The exceptions are its explicitly announced sanctions against U.S. weapons sales to Taiwan, which are clear signals of China’s discontent that do not necessarily need to be executed.

This article draws from the literature on international political economy and international security to explain China’s economic sanctions behavior. It demonstrates the simultaneous opportunities and constraints that World Trade Organization rules place on China’s use of economic sanctions for national security purposes.

Studying China’s sanctions behavior is important for both scholarly and policy reasons. I seek to contribute to a growing body of literature that looks beyond sanctions imposed by members of the Organization for Economic Cooperation and Development, a group of mostly Western democracies. I do so by drawing from a novel dataset on Chinese sanctions action and rhetoric between 1990 and 2023. Analyzing the characteristics of Chinese sanctions also increases our understanding of how China uses economic statecraft to address national security concerns. Understanding this could help U.S. policymakers formulate better policies towards China, especially since many targets of Chinese efforts are U.S. allies or partners.

The article is organized into six sections. First, to lay the empirical foundation, I showcase descriptive statistics through a new dataset of China’s economic sanctions behavior and public rhetoric from 1990 to 2023. Second, I discuss how this article contributes to the extant literature on sanctions while elaborating on the arguments. The next section introduces the dataset and discusses the sources, methods, and case selection. Fourth, I examine empirical cases of Chinese economic sanctions, using primary sources to illustrate China’s rationale for imposing sanctions the way it does. The next section examines three alternative explanations. The final section concludes and discusses policy implications.

The Sanctions Literature and Theories Underpinning China’s Sanctions Behavior

This section first discusses the broader sanctions literature, then further examines the literature on Chinese economic sanctions, and finally introduces the theories that underpin China’s sanctions behavior.

The Sanctions Literature

Existing literature mostly evaluates the effectiveness of sanctions, not why and how sanctions are used. This article adds to the burgeoning literature explaining China’s sanctions behavior and rationale. Taking a rationalist approach, this article contrasts with existing studies that put forward an image and ideational-based argument.

The first wave of studies in the 1960s and 1970s concludes that sanctions are ineffective: They fail to induce policy changes in the target.10 Subsequent scholars argue that sanctions send signals to both the target and the sender’s allies and may, therefore, achieve goals other than inducing behavioral changes.11 Recent scholars specify under what conditions sanctions are effective.12

This article builds on these existing studies to examine the rhetoric and characteristics of Chinese sanctions, while examining them through a rationalist perspective.

However, the general sanctions literature does not further specify how sanctions decisions are made, focusing instead on the effectiveness of sanctioning authoritarian states.13 Among the scholars who do discuss sanctions decisions, there are two approaches. The first adopts a cost-benefit framework and assumes that states are unitary actors.14 A second approach focuses on domestic factors, noting that sanctions are disruptions of international trade and therefore have domestic distributional consequences.15 Alternatively, M. S. Daoudi and M. S. Dajani view sanctions as safety valves.16 Nevertheless, the general sanctions literature privileges Western democracies.17

This work helps to fill that gap, adding to the emerging literature on China’s economic sanctions post-Cold War when the Chinese economy became more integrated into the global economy, many of which works examine how China imposes economic sanctions and to what extent they are effective.18 These other works, however, are ultimately about evaluating sanctions effectiveness, not the rationale for how China imposes economic sanctions or what explains its sanctions behavior.

There are several scholars whose research does examine the distinct traits of China’s sanctions behavior, especially the rhetoric surrounding China’s economic sanctions. For example, Christina Lai looks into the unannounced nature of Chinese economic sanctions through the lens of evaluating their effectiveness, pointing out that the tensions in China’s long-term “peaceful development” goal and short-term policy objectives have led to China’s ambiguous sanctions, limiting its success.19 Angela Poh examines why China tends to be restrained in its use of sanctions, arguing that China’s longstanding sanctions rhetoric has a constraining effect on its sanctions behavior.20 Poh’s book, while comprehensive, focuses on explaining the effectiveness of China’s sanctions. Similarly, Enrico Gloria argues that China’s consistently vague acknowledgments and denials in claiming a direct hand on unilateral sanctions come from its broad foreign policy objective of maintaining a positive identity through its discourse of victimhood.21 These studies put forward an image and ideational-based argument: China’s sanctions rhetoric and characteristics are related to maintaining the image and identity of a peaceful great power.

This article builds on these existing studies to examine the rhetoric and characteristics of Chinese sanctions, while examining them through a rationalist perspective. It contributes to the burgeoning literature on Chinese economic sanctions in several ways. First, it creates an original case dataset on Chinese economic sanctions and sanctions rhetoric between 1990 and 2023, complimenting Darren Lim and Victor Ferguson’s industry-specific dataset on Chinese sanctions during the Terminal High Altitude Area Defense episode, which is extensive but focuses on that case only.22

Second, it attempts to further test the conjecture made in Lim and Ferguson’s 2022 article that “utilizing informal sanctions minimizes the risk of legal challenge and potential countermeasures under [the World Trade Organization] or other international trade and investment rules that require clear evidence of state responsibility.”23 Because their article focuses on identifying and explaining industries targeted by Chinese economic sanctions, it did not examine or provide empirical backing to this claim. As such, this article analyzes how China bypassed the constraints of international institutions to establish its resolve in defending perceived national security interests. It examines whether material constraints and interests or ideational and image concerns (addressed by Poh, Gloria, and Lai) matter more in explaining China’s sanctions rhetoric and behavior, while explaining the variation in China’s sanctions rhetoric. Below, I lay out the theoretical foundations that potentially underpin China’s sanctions rhetoric and behavior.

Sanctions as a Signaling Device

Instead of being mere punishments, sanctions serve other purposes, such as signaling, as David Baldwin indicates.24 Below, I discuss the different kinds of signals and why China might choose some types over others, applying theories from the broader signaling literature.

Vague Versus Explicit Signals

The literature on audience costs suggests that sanctions and threats of sanctions should be made explicit.25 Otherwise, it would be difficult for the audience to perceive the threats, whether by domestic or international audiences, or such threats might be considered cheap talk. When David Lektzian and Christian Sprecher analyze the relationship between sanctions and militarized conflicts, they mainly examine threats of sanctions, which generate audience costs, especially in democracies; that is, there is the domestic cost of backing down after announcing sanctions.26 For example, if the voters are hawkish, they might vote against a president who backs down from harsh sanctions on the state’s adversaries.

However, more recent literature on covert action in international relations help explain why states may want to impose “vague” sanctions that are not explicitly announced. Some scholars argue that states choose to engage in secret diplomatic communications — for fear of domestic opposition in circumstances when the hawkish public does not support states’ decisions to establish, maintain, or improve relations with adversaries.27 Other scholars consider external considerations — covert action can reduce the risks of unwanted escalations with one’s adversary.28 In other words, if covert actions remain covert, they are less likely to generate escalatory responses from within the initiating state and the target state.

In the case of economic sanctions, as noted by Lim and Ferguson, concerns regarding escalation could be about evading punishment from the World Trade Organization dispute settlement mechanism (especially tit-for-tat retaliation from the target country) or concerns about trade rules. The dispute settlement mechanism states that if the target state deems the actions of the coercing state as a violation of World Trade Organization agreements, it could “impose countermeasures,” informally known as retaliation.29 Without explicitly announcing sanctions, China can plausibly deny that it imposed them.

Therefore, violations of World Trade Organization rules can be costly for China.

Resolving trade disputes is one of the core activities of the World Trade Organization. A dispute arises when a member government believes another member government is violating an agreement or a commitment that it has made in the World Trade Organization.30 The organization has one of the most active international dispute settlement mechanisms in the world. Since 1995, 623 disputes have been brought and over 350 rulings have been issued.31 China is a member of the World Trade Organization and benefits from membership because its opens Chinese exports much more freely to the markets of member states while making it easier to facilitate imports into China.32

Upon entering the World Trade Organization, China agreed to assume the obligations of its more than 20 existing multilateral agreements, including core principles of the organization, such as most-favored nation treatment, national treatment, transparency, and the availability of independent review of administrative decisions.33 In areas where China violated rules, it has been disciplined by existing rules, including through the dispute settlement mechanism.34 The United States has consistently issued annual reports documenting cases where China did not comply with rules and has taken domestic trade actions including investigations and tariffs.35 For example, the United States successfully prosecuted a dispute settlement case challenging Chinese measures that deny foreign patent holders the ability to enforce their patent rights against a Chinese joint venture partner after a technology transfer contract ends and that impose mandatory adverse contract terms that discriminate against and are less favorable for imported foreign technology as compared to Chinese technology, as well as the imposition of substantial additional tariffs on imports of Chinese goods.36 Therefore, violations of World Trade Organization rules can be costly for China.

Execution Versus Threat of Sanctions

Sanctions signals can be either executed sanctions or threats of sanctions. The sanctions literature does examine sanctions as signals, mainly focusing on evaluating the effectiveness of sanctions as a costly signal rather than analyzing sanctions methods.37 Therefore, the paragraphs below apply theories in the signaling literature to explain why many of China’s sanctions are executed instead of being mere threats.

Thomas Schelling and Robert Jervis contend that concrete action is a more credible signal than mere threats.38 Schelling conceptualizes credibility as a bank, treating precedents and past actions as important in maintaining one’s credibility vis-à-vis one’s allies and adversaries — in order for a state to gain credibility, it needs to “deposit” past actions of resolve into the credibility bank. Jervis’ deterrence model similarly indicates this logic. Therefore, to avoid further aggression such as use of force or invasion from another state, the state must respond and demonstrate resolve, which means that issues of little intrinsic value become highly significant as indices of resolve. For example, Vietnam might not be of key strategic value in and of itself during the Cold War, but whether the United States fought against Communist North Vietnam could be an indicator of U.S. resolve. In this sense, both Schelling and Jervis suggest that to credibly deter future aggression, states sometimes need to take physical action.

More recent signaling literature also concludes that material actions serve as more effective signals. For example, Azusa Katagiri and Eric Min conclude that during the Berlin Crisis of 1958–63, the material actions of the Soviet Union had greater influence on the U.S. calculation of Soviet resolve than either explicit or private statements.39 As World War II ended, the four victorious powers — the United States, the United Kingdom, France, and the Soviet Union — divided the German capital into four sectors. The right of Western access to West Berlin was treated as a testing ground of resolve. Through the White House assessments of Soviet material actions, private statements, and public statements, Katagiri and Min show that material actions were most effective in shaping U.S. perceptions of Soviet resolve. This case highlights the robust character of action, how signals toward one state can be simultaneously directed at others to deter future action.

Therefore, vague and executed sanctions reflect a suboptimal choice. It provides plausible deniability — that China has imposed sanctions — to reduce possible economic retaliation from the target state while attempting to ensure that the message is credibly sent to not only the target state, but also other states. This is especially crucial for rising powers like China that are still in the process of economic development and tend to face greater pressure from the existing hegemon, which might take actions to thwart their rise (e.g., punishing China over explicitly announced sanctions).

In short, I hypothesize that when China imposes economic sanctions over issues that it cannot directly link to national security, they have two characteristics: vague sanctions instead of explicitly announced sanctions and executed sanctions instead of threats of sanctions. Such characteristics are driven by two concerns. First, vague sanctions increase plausible deniability and reduce escalation risks because China could deny that it imposed economic sanctions and, therefore, avoid retaliation from the target state. Second, executed sanctions are a stronger signal of resolve than threats of sanctions, especially when such signals are sent but not publicly announced. These two characteristics are interconnected and sequenced. Because Chinese sanctions tend to be vague and not explicitly announced, they must move beyond mere threats to physical actions to effectively deter both the direct target states as well as other surrounding states. Meanwhile, because they offer China plausible deniability, vague and executed sanctions could potentially evade the institutional constraints from World Trade Organization rules. However, for actions of target-state actors that China can directly and plausibly link to national security, we are more likely to see explicitly announced economic sanctions. Such sanctions do not necessarily have to be executed.

As such, if the logic prioritizing World Trade Organization constraints is correct, the observable implications should be the following. First, behaviorally, we should observe vague and executed Chinese economic sanctions in issues that are not clearly counted as issues of national security. For example, receiving the Dalai Lama may be viewed by China as an infringement on its internal affairs, but it is generally viewed by democratic states as honoring human rights and freedom of speech, not a matter of national security. We would, however, observe clearly and explicitly announced economic sanctions when the issues and relevant actors can be directly linked to China’s national security. Second, in terms of written and speech evidence, we should observe Chinese scholars and government analysts discussing the role of the World Trade Organization’s rules when they discuss economic sanctions. The next section examines the methods and sources used to test the argument prioritizing the roles of institutions.

Descriptive Statistics, Methods, and Sources

Economic sanctions is defined here as the deliberate government-directed withdrawal of customary trade or financial relations to pressure the target to change undesirable policies.40 Trade sanctions include embargo, boycotts, tariff increase or discrimination, withdrawal of “most-favored-nation” status, quotas, blacklists, license denial, and preclusive buying, while financial sanctions involve freezing assets, suspending aid, expropriation, unfavorable taxation, and controls on capital import or export.41

In contrast, in the four cases of U.S. weapons sales to Taiwan, sanction threats were explicitly issued and not vague.

Drawing from existing studies on Chinese economic sanctions, extensive Factiva search of China’s sanctions behavior, as well as primary sources from agencies such as the Ministry of Foreign Affairs, I created a new dataset on Chinese economic sanctions episodes from 1990 to 2023, focusing on China’s behavior and rhetoric regarding these sanctions.42 Table 1 below, therefore, shows a total of 31 Chinese sanctions episodes from 1990 to 2023. Each case is documented from the starting point of sanctions — for example, China’s economic sanctions on Norway, the salmon ban, span several years but originated from the 2010 Nobel Peace Prize awarded to Chinese political dissident, Liu Xiaobo. Therefore, it is counted as one episode instead of several and documented as “Norway 2010” in the dataset. The rationale for documenting sanctions episodes this way is that my dataset concerns how China initiates the sanctions and what rhetoric is being used. Such information tends to abound in the initial stage of sanctions and rarely changes in the implementation stage.

Table 1. List of China’s Economic Sanctions Episodes (1990–2023)

Sanctions Episode and Year	Issue	Rhetoric (Explicit or Vague)	Behavior (Threat or Executed)
France 1992	Arms sales to Taiwan	Vague	Executed
Taiwan 2000	Taiwanese election	Vague	Executed
Mongolia 2002	Receiving the Dalai Lama	Vague	Executed
North Korea 2003	Missile test	Vague	Executed
Taiwan 2004	Taiwanese election	Vague	Executed
North Korea 2006	Nuclear programs	Vague	Executed
Canada 2007	Receiving the Dalai Lama	Vague	Executed
Germany 2007	Receiving the Dalai Lama	Vague	Executed
France 2009	Receiving the Dalai Lama	Vague	Executed
Japan 2010	Senkaku Islands	Vague	Executed
Norway 2010	Nobel Peace Prize	Vague	Executed
United States 2010	Arms sales to Taiwan	Explicit	Threat
Estonia 2011	Receiving the Dalai Lama	Vague	Executed
Japan 2012	Senkaku Islands	Vague	Executed
Philippines 2012	Scarborough Shoal	Vague	Executed
United Kingdom 2012	Receiving the Dalai Lama	Vague	Executed
United States 2015	Arms sales to Taiwan	Explicit	Threat
Mongolia 2016	Receiving the Dalai Lama	Vague	Executed
South Korea 2016	THADD	Vague	Executed
United States 2019	Arms sales to Taiwan	Explicit	Threat
Australia 2019	Huawei	Vague	Executed
Canada 2019	Huawei	Vague	Executed
United States 2019	Hong Kong	Vague	Executed
United States 2020	Arms sales to Taiwan	Explicit	Threat
Australia 2020	COVID-19	Vague	Executed
Sweden 2020	Award to Gui Minhai	Vague	Executed
United States/Sweden/Spain 2021	Xinjiang	Vague	Executed
Lithuania 2021	Establishing the Taiwanese Representative Office	Vague	Executed
Taiwan 2021	Discussion on Taiwan’s constitutional revision	Vague	Executed
Taiwan 2022	Pelosi visit to Taiwan	Vague	Executed
Taiwan 2023	Tsai’s visit to United States	Vague	Executed

Over time, China increased the frequency of economic sanctions starting from 2010. China imposed sanctions once between 1990 and 1999, eight times between 2000 and 2009, 14 times between 2010 and 2019, and eight times between 2020 and 2023. Four out of the 22 sanctions episodes between 2010 and 2023 are explicit. Nevertheless, China did utilize vague and executed economic sanctions in the pre-2010 period, accounting for nearly 30 percent of all cases.

Of all cases in the dataset, 13 percent are merely threats of sanctions and concern U.S. weapons sales to Taiwan. 87 percent of the cases are sanctions that are actually executed. These executed sanctions also share another characteristic: They are vague and not explicitly announced. The appendix documents the vague rhetoric surrounding each of these cases.

For example, when the Dalai Lama visited Mongolia in November 2002, China closed the Sino-Mongolian border, essentially cutting trade with Mongolia. The Chinese Ministry of Foreign Affairs spokesperson denied that this closure had to do with the Dalai Lama and cited “technical issues.”43 In 2016, when the Dalai Lama visited Mongolia again, China pushed off bilateral discussions on loans to Mongolia indefinitely while implementing extra fees for Mongolians at port entries. When asked about these issues at a Ministry of Foreign Affairs meeting, the Chinese spokesperson denied that China had imposed sanctions and said instead that he was “not familiar with these issues.”44 In response to Australia’s ban on Huawei’s 5G technology in 2019, China banned imports of Australian coal to China. Similarly, China denied imposing such economic sanctions on Australia. Ministry of Foreign Affairs spokesman Geng Shuang said the ban was made on environmental grounds and described it as “completely normal.”45

In contrast, in the four cases of U.S. weapons sales to Taiwan, sanction threats were explicitly issued and not vague. In each of the cases spanning 2010, 2015, 2019, and 2020, the Chinese Ministry of Foreign Affairs explicitly issued sanctions, threatening explicitly that China would impose economic sanctions on the U.S. companies that sold weapons to Taiwan.46

Regarding the issues on which China has used economic sanctions, in line with China’s stated interest hierarchy that Taiwan and Tibet are China’s core interests, China used the most sanctions over Taiwan and Tibet issues, accounting for 58 percent of the cases in total. Territorial disputes constitute 10 percent of Chinese economic sanctions, whereas human rights related issues such as Hong Kong and Xinjiang account for 13 percent. The last 19 percent concern issues such as the Huawei ban, the origins of COVID-19, the Terminal High Altitude Area Defense missile system, and North Korea’s nuclear program.

Having established the descriptive statistics as well as variation in China’s economic sanctions rhetoric and behavior, the subsequent section examines the literature on economic sanctions while laying out the theoretical foundations influencing China’s sanctions rhetoric and behavior.

Methods and Sources

Regarding sources, I draw upon extensive fieldwork and a wealth of previously underutilized primary Chinese-language sources. First, I use publicly available documents from the Chinese and foreign governments and memoirs by former Chinese government officials. Second, I use materials from Chinese government think tanks. Third, I conducted interviews with former Chinese, Japanese, and U.S. officials, diplomats, and military officers, as well as Chinese analysts from government think tanks. Fourth, I searched and examined over 250 articles between 1990 and 2023 in the China National Knowledge Infrastructure database, China’s largest academic database, with the keyword “economic sanctions” to see what Chinese scholars and government analysts have written on this topic. Finally, I use behavioral evidence, tracking China’s economic sanctions rhetoric and behavior to see if they suggest any constraints from World Trade Organization rules. I cross-check these different kinds of sources against each other. Because interviews may be biased, for example, I avoid over-relying on them and try to triangulate them against other sources. If the interview data is consistent with the written materials, then they have greater credibility.

Some cases of Chinese economic sanctions were vague and executed, whereas sanctions against U.S. weapons sales to Taiwan were explicitly announced.

In terms of methods, this article first examines World Trade Organization rules regarding economic sanctions and analyzes the extent to which Chinese scholars and government analysts’ discussions about economic sanctions in the China National Knowledge Infrastructure database center on those rules. In other words, do Chinese government analysts and scholars mainly talk about rules as well as the constraints on economic sanctions? Second, the article looks at case studies on three issue areas: foreign leaders’ reception of the Dalai Lama, maritime territorial disputes, and Taiwan. It first examines China’s economic sanctions against France in 2009 over the reception of the Dalai Lama, which were vague and executed. It then examines China’s economic sanctions over maritime territorial disputes against the Philippines and Japan, which were also vague and executed. The third case study concerns Taiwan. It contrasts China’s vague and executed economic sanctions regarding political developments, such as Taiwanese leaders visiting the United States, against explicitly announced Chinese economic sanctions over U.S. weapons sales to Taiwan, analyzing the variation in sanctions rhetoric and behavior over the same issue.

These cases were chosen for three reasons. First, Taiwan, Tibet, and maritime territorial disputes constitute about 70 percent of China’s economic sanctions episodes, making them the most likely cases where Chinese sanctions might take place in the future. Second, the cases examined span different time periods (pre-2010, 2010–2019, and post-2020), making them more comprehensive in terms of the periods covered. Third, the case study on Taiwan presents an interesting within-case variation: Some cases of Chinese economic sanctions were vague and executed, whereas sanctions against U.S. weapons sales to Taiwan were explicitly announced. A within-case examination controls for potential confounding variables, making it easier to identify the primary factor that explains the variation. The following section presents the empirical analysis.

Explaining the Variation: When Are Chinese Economic Sanctions Vague and Executed?

This section is divided into two parts. The first part examines the GATT 1947 clauses related to economic sanctions, the legal basis of World Trade Organization rules. It also compares statements made by Chinese scholars and government analysts to discussions on those clauses. The second part uses case studies to illustrate the determinant logic when Chinese sanctions are vague and executed, looking at three issues: foreign leaders’ reception of the Dalai Lama, maritime territorial disputes, and Taiwan.

World Trade Organization Rules and Chinese Analysts Writing on Sanctions

When it comes to economic sanctions, the most relevant legal text is GATT 1947.47 For example, Article V states that “[a]ny contracting party may require that traffic in transit through its territory be entered at the proper custom house, but, except in cases of failure to comply with applicable customs laws and regulations, such traffic coming from or going to the territory of other contracting parties shall not be subject to any unnecessary delays or restrictions.” Article VIII states that “[n]o contracting party shall impose substantial penalties for minor breaches of customs regulations or procedural requirements.” Finally, Article XIII stipulates that “[n]o prohibition or restriction shall be applied by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation of any product destined for the territory of any other contracting party, unless the importation of the like product of all third countries or the exportation of the like product to all third countries is similarly prohibited or restricted.”

Many of the articles in GATT 1947 are relevant for China’s economic sanctions because they tend to take the form of import bans, export restrictions, extra fees charged at port entries, and unnecessary delays and inspections at customs, as mentioned in Articles III, V, VII, VIII, and XIII. Nearly all of China’s unilateral economic sanctions from 1990 to 2023 involve some form of import or export restrictions, excessive fees, or delays at customs, which could be seen as World Trade Organization rule violations unless they meet Article XXI of GATT 1947, the security exceptions clause (hereafter security exception in the empirical section). The clause, however, is not a catch-all excuse for countries to use discriminatory measures. Instead, it contains specific criteria for what counts as security exceptions. Relevant to China’s economic sanctions is that the contracting party can take actions that it considers necessary for the protection of its essential security interests.48

Of course, the World Trade Organization recognized that states might take advantage of the notion of “essential security interests” and had discussions regarding what the security exceptions could cover, fearing that countries would take measures for commercial purposes under the guise of security.49 For example, the United States was careful that its export controls against Czechoslovakia in 1948 applied to a narrow group of goods that could be used for military purposes.50 The language in GATT discussions specifically pointed out that restricted export goods should be “immediately or ultimately” used to supply a military establishment, implying that there needs to be a direct connection for the restriction to be reasonable.51 In April 1982, the European Economic Community and its member states, as well as Canada and Australia, indefinitely suspended the import of Argentinian products over the Falkland Islands dispute. Argentina stated that such measures were in violation of GATT articles. The GATT Council concluded in this case that the contracting parties taking restrictive trade measures for reasons of a non-economic character would not be consistent with GATT.52 It is important to note that this 1982 case was a case of maritime territorial dispute in which restrictive trade measures were not considered to be in line with GATT rules, including Article XXI. In this sense, China’s measures in maritime territorial disputes, such as its 2010 rare earth ban against Japan, could not count as export control for security purposes because the rare earths were not directly used for military purposes, nor would China’s 2012 banana ban against the Philippines count.

Chinese Government and Scholarly Writing on Economic Sanctions

Chinese scholars and government analysts examine economic sanctions using rational cost-benefit analysis, paying specific attention to World Trade Organization rules, as early as the 1990s, viewing economic sanctions as having signaling and coercive effects while being constrained by certain costs.53 In 2004, government analyst Wan Shu from China’s National Development and Reform Commission (a powerful government agency overseeing economic matters) argued that China should appropriately use economic sanctions to defend its national interests.54 Chinese scholars and government analysts focused on the “appropriate” aspect that Wan noted, highlighting the potential cost of imposing economic sanctions, especially due to international legal and institutional constraints such as World Trade Organization rules.

For example, legal scholars Jian Jisong and Wang Hongxin advocated for the use of economic sanctions but noted that China should be cautious about the restrictions regarding economic sanctions because “if unilateral sanctions were not imposed moderately, they could be viewed as breaching international law.”55 Liu Jianping and Zheng Xutao also stressed that China could consider utilizing economic sanctions, especially through import and export restrictions, but needed to make sure that such economic sanctions accord to the legal frameworks (youfa keyi) such as World Trade Organization rules.56 It should be noted that this latter article was written in 2005, long before China began to impose sanctions more frequently using exactly what the article suggested: import and export bans. The article, therefore, is not a post hoc justification of China’s behavior and suggests the continuity of the logic regarding its economic sanctions practice.

In other words, Chinese scholars and government analysts know that China will have difficulty linking import and export bans such as the banana ban and the rare earth ban directly to “essential threats” to China’s national security as stated in the World Trade Organization security exception clause.

By legal constraints, Chinese scholars and government analysts mostly focus on the discussion of World Trade Organization rules. Prominent legal scholar Zhang Hui explained that many cases of China’s economic sanctions were “quasi-sanctions” (zhunzhicai), including export and import restrictions that were not explicitly announced by the government, which provided plausible deniability — ambiguity regarding whether government-imposed bans took place or these restrictions were actions taken by economic actors.57 Zhang noted that China’s sanctions need to consider World Trade Organization rules, implying that some of China’s sanctions, if explicitly announced as such, would be in violation of those rules. Similarly, international relations scholar Yan Liang stated explicitly in his 2012 article that China’s economic sanctions in the form of import or export bans were intentionally vague because China could plausibly deny violations of World Trade Organization rules.58 Ge Miao similarly noted China’s concerns about the legitimacy of unilateral economic sanctions.59 In other words, Chinese scholars and government analysts know that China will have difficulty linking import and export bans such as the banana ban and the rare earth ban directly to “essential threats” to China’s national security as stated in the World Trade Organization security exception clause. Therefore, their rationale is that intentional vagueness helps China evade accusations that it violates World Trade Organization rules. China is a member of the World Trade Organization and benefits from being part of it, and being seen as violating its rules can be costly in two ways. First, other states can retaliate against China’s violation by enacting tariffs. Second, violations might make private companies think twice about doing business with China.

Many Chinese scholars and government analysts painstakingly parse the legal phrases in GATT 1947 clauses and their implications for imposing economic sanctions. For instance, various scholars and government analysts have noted that, based on their analyses of Articles XXI and XIV, for economic sanctions to be legitimate, the sanctioning country needs to establish a necessary and relevant connection (biyaode youguanlian de) between the goods banned as part of import or export restrictions and the issue causing national security concerns.60 These studies range from 2004 to 2023. They also involve a wide range of analysts, civilian and military, including scholars from prominent academic institutions such as Fudan University and Wuhan University as well as government analysts from the Chinese Academy of Social Sciences and the National Defense University.

Legal scholar Zhang Hu, in particular, noted that for the security exception to be applied, China should be cautious about what import and export bans could be counted as in compliance with the exception.61 Zhang also noted the essential security interests section in Article XXI, emphasizing the “essential” part. Similarly, legal scholar Li Wei stressed that not all interests concern a state’s “essential security interests,” explicitly stating that China should use the security exception appropriately and with restraint.62 Li implied that Russian sanctions measures such as import bans on meat, fruits, and dairy products were controversial and did not accord to World Trade Organization rules. As such, Chinese scholars and analysts are well aware of the constraints from these rules in terms of which goods can be banned as a sanctions strategy and what counts as an “essential” security interest.

Chinese government documents also suggest that China is concerned about the potential abuse of “overusing” the security clause as well as its negative implications for China. For example, China’s 2019 official government document, “Suggestions Regarding World Trade Organization Reform,” noted that “overusing the national security clause harms the interests of [World Trade Organization] members, especially developing country members.”63 Although the document did not explicitly state that China’s interests would be harmed, that was implied because China considers itself to be a developing country. More explicitly, China’s most recent 2023 official government report, “World Trade Organization Compliance of the United States,” noted that “to maintain its economic and technological leadership, the United States has abused economic sanctions to interfere in normal international commercial transactions and competition, under the pretext of ‘national security,’ ‘human rights’ and so forth,” which “have posed widespread concerns among many other members and companies.”64 Government analyst Li Xiaoling also echoed this concern that the national security clause has been abused to include economic security, food security, climate change, and cyber security, which may increase the cases of unilateral sanctions based on the national security exception.65 In other words, the logic seems to be that if China uses the national security clause for issues that are not strictly about security, others might abuse the clause and use it against China, too.

As such, Chinese government documents, government analyses, and scholarly writing all suggest awareness of World Trade Organization rules as well as of the circumstances under which China can explicitly invoke the national security exception to impose economic sanctions. The following paragraphs take a deeper dive into several case studies to illustrate this logic: the French reception of the Dalai Lama, maritime territorial disputes with Japan and the Philippines, and issues regarding Taiwan.

Receiving the Dalai Lama: France 2009

On December 6, 2008, French President Nicolas Sarkozy met with the Dalai Lama, the Tibetan spiritual leader.66 China views the Dalai Lama as having a political objective and considers any foreign leaders’ meeting with the Dalai Lama as an encroachment on China’s internal affairs and is against such meetings. A spokesperson from the Chinese Ministry of Foreign Affairs responded the next day, blaming France for interfering with China’s internal affairs and urging the French to “take concrete measures to correct its mistakes.”67 China subsequently used economic sanctions, in particular by “freezing” and “delaying” Airbus orders from France instead of cancelling them.68 China did not link this explicitly to the visit. Also, after the Dalai Lama’s visit, Chinese Premier Wen Jiabao visited countries such as Germany and Britain yet avoided France, which the French media dubbed “tour de France” (huanfa).69 This avoidance had economic impacts. When Chinese Minister of Commerce Chen Deming led the “Chinese group of trade and investment promotion” (zhongguo maoyi touzi cujintuan) to Europe, with €17 billion, he also avoided France.70

The characteristics of Chinese economic sanctions in this episode are vague and executed. The Chinese Ministry of Foreign Affairs did not explicitly state that China imposed coercive economic measures. Rather, spokesperson Liu Jianchao stated that France “caused serious damage to Sino-French relations” but did not specify what the damage was.71 It is important to note that Chinese scholars and government analysts believed that if China canceled Airbus orders — likely hundreds of aircraft — it would have caused much more damage and China could potentially breach World Trade Organization rules.72 Indeed, China did not link the delay with the Dalai Lama’s visit and cited instead issues with the “economic environment” (yin jingji huanjing) — that is, the global financial situation following the financial crisis.73 However, this was not an accurate representation of reality. As previous research has shown, China’s import of Airbus aircraft from France declined in 2009, but China increased its import of Airbus aircraft from Germany, offsetting the decrease from France and suggesting that the issues were not about the “economic environment.”74

To quote a Chinese proverb, the gun should aim for the first bird that emerged (qiangda chutou niao) — China was afraid that France would also set a bad precedent of state leaders meeting with the Dalai Lama.

Zhang Hui noted that such delay of orders without an explicit announcement of economic sanctions made it difficult to tell economic sanctions — government-instructed actions — apart from those of commercial actors, implying the plausible deniability of vague economic sanctions.75 Yan Liang similarly noted the plausible deniability aspect of China’s economic sanctions against France in this episode, that is, China can plausibly deny that it imposed economic sanctions.76 Interestingly, Airbus actively denied that China cancelled orders and did not comment on the delay, nor did it raise issues with the World Trade Organization.77 This is an indirect piece of evidence suggesting that, due to plausible deniability, Airbus could not appeal to the World Trade Organization because China could argue that the delay was not an episode of sanctions.

In addition to being vague, Chinese economic sanctions were also executed, meaning China did not issue explicit threats but instead went straight ahead with executing the sanctions. Such behavior is consistent with the signaling literature in that for sanctions to be more effective, sometimes states have to execute the sanctions instead of merely threatening them. Interviews with Chinese analysts and one former senior Chinese official’s memoir suggested that the logic indeed was to signal resolve to other countries and to prevent them from similarly meeting with the Dalai Lama in the future.78 As one former Chinese diplomat stated, French President Nicholas Sarkozy was the first ever to have met with the Dalai Lama while he was rotating chair of the European Union.79 To quote a Chinese proverb, the gun should aim for the first bird that emerged (qiangda chutou niao) — China was afraid that France would also set a bad precedent of state leaders meeting with the Dalai Lama.80 Senior Chinese diplomats, including former State Councilor Dai Bingguo, viewed France as the “leader in a herd of goats” (lingtou yang)81 — that is, a leader in Europe. China thus needed to coerce France to establish its reputation for resolve and to deter similar visits in the future.82 As such, Chinese economic sanctions in this case were vague yet executed, aimed at creating plausible deniability regarding the use of sanctions while sending a stronger signal to France as well as other countries.

Maritime Territorial Disputes: Japan and the Philippines

Economic Sanctions Against Japan in 2010

Both China and Japan claim the Senkaku (Diaoyu in Chinese, hereafter Senkaku for simplicity) Islands in the East China Sea as their respective territory. On Sept. 7, 2010, a Chinese trawler collided with a Japanese Coast Guard patrol boat around the islands’ disputed waters. Japan subsequently detained the Chinese fishermen and threatened to have the captain of the trawler go through a domestic trial. According to the Japanese diplomat based in Beijing, China imposed a ban on its rare earth export to Japan for two months, which affected Japanese IT firms in particular.83 According to the New York Times, industry officials said that China’s customs agency had notified companies that they were not allowed to ship any rare earth oxides, rare earth salts, or pure rare earth metals to Japan — China’s main buyer — although these shipments were still allowed to go to Hong Kong, Singapore, and other destinations.84

Many Chinese government policy analysts also admitted that China used economic sanctions via the export ban on rare earth materials.85 One former Chinese diplomat based in Japan at that time indicated that although China had been reducing its rare earth exports due to environmental concerns since summer 2010, the timing of the complete ban on rare earth exports to Japan (which began in September 2010) proved that this was an economic countermeasure for the boat clash incident.86 As in the French case, Chinese sanctions, and especially the rare earth ban, were vague and not explicitly announced: The Chinese Ministry of Foreign Affairs did not explicitly state that China had imposed coercive economic measures. In the press conference, spokesperson Jiang Yu said that “China is resolute in defending sovereignty and territorial integrity” and that “Japan should take measures to remove the obstacles in Sino-Japan relations.”87 Jiang did not specify what the obstacles were or how China would defend its sovereignty, nor did she mention economic sanctions. In addition, when asked about the reason for China’s rare earth ban in October 2010, the ministry’s spokesperson only stated that China’s action was “in accordance to relevant World Trade Organization rules.”88 In September 2012, the Senkaku dispute became heated again with the Japanese government nationalizing three of the five islands. Small-scale economic sanctions also ensued. Again, in this case, Chinese sanctions were vague and executed. In the press conference, Ministry of Foreign Affairs spokesperson Hong Lei noted that “China is resolute in defending its sovereignty” and “will take necessary measures to defend its sovereignty,” but did not specify what those measures would be.89

Chinese government analysts and scholars noted that the vague nature of China’s rare earth ban could help it to plausibly deny that it had imposed economic sanctions on Japan, thus reducing economic retaliation based on World Trade Organization rules. For example, Yan explicitly noted that the vagueness in the rare earth ban conformed to China’s tendency to impose vague economic sanctions, which could reduce the possibility of other states accusing China of violating World Trade Organization rules.90 Zhang explained that export or import bans based on the national security exception were often times controversial and lacked legitimacy, adding that China chose not to link the rare earth ban with national security.91 Senior analyst Zhang Jifeng confirmed that China did not announce economic sanctions against Japan because it could potentially violate World Trade Organization rules, which in turn might have a negative impact on China’s economic interests: Japan could potentially retaliate or lodge a lawsuit against China and, if China were to lose, it would need to comply with the ruling of the World Trade Organization dispute resolution mechanism.92 Other analysts, Wang Dong and Xu Mei, echoed Zhang’s concerns about the negative impact as well as the potential retaliatory economic measures.93 Analyst Li Wei stated that China should not mention the notion of economic sanctions against Japan, but did not say China should not impose implicit economic sanctions on Japan.94 An interview with a Chinese analyst suggests that plausible deniability and concerns about World Trade Organization rules influenced China’s behavior.95 This analyst reached out to Japanese diplomats at the time of the incident, and Japanese diplomats told this analyst that Japan could not sue China at the World Trade Organization on the basis of economic sanctions over the Senkaku dispute because Chinese actions were vague. In the World Trade Organization lawsuit DS431 that Japan subsequently filed regarding the rare earth embargo, Japan listed “the imposition and administration of restrictions through unpublished measures” as one area where China did not conform to the rules, indicating that there indeed was an export ban, but it was unannounced. Japan did not link the Senkaku boat clash incident with China’s rare earth ban in the lawsuit, nor did it accuse China of imposing economic sanctions. Legal scholar Li Xiaoling summarized that China did not invoke the security exception and explicitly announce economic sanctions in the rare earth case due to the cost-benefit analysis: The benefit of maintaining vague economic sanctions in this case was greater than making sanctions explicit.96

Because China did not explicitly announce these economic sanctions, it executed them for a stronger signal, which is in line with expectations from the signaling literature. Interviews with government policy analysts and scholarly writing further fleshes out China’s belief in the logic of demonstrating resolve, being resolved in defending its sovereignty claims over the Senkaku Islands. Government policy analysts stated, for instance, that if China did not use coercive measures to stop Japan’s plan for a domestic trial of the Chinese captain, it would signal to Japan that China had conceded to Japan’s territorial claims — and especially legal claims — over the Senkakus.97 Other government policy analysts emphasized that China feared that if it did not take action, it would be viewed as weak by others.98 Mei Xinyu, a Chinese government analyst at the Ministry of Commerce, also emphasized the need to use Japan for demonstration effects as a motivation for sanctioning it.99 As such, executed sanctions in this case reflect China’s logic of establishing resolve.

China’s Banana Ban Against the Philippines in May 2012

China has had disputes with Vietnam, the Philippines, Malaysia, Brunei, and Indonesia in the South China Sea over the Paracel Islands, the Spratly Islands, and features around the Macclesfield Bank.100 These disputes, centering on the sovereignty of claimed islands and maritime jurisdiction, have been over such resources as oil and fishery. China and the Philippines both claim the Scarborough Shoal, which is located in the Macclesfield Bank. In 2012, after the Philippines decided to arrest Chinese fishermen in that disputed area, China imposed a quarantine against Philippine fruit exports to China (especially bananas) during the ensuing standoff. China’s use of the banana ban as economic sanctions conforms to the characteristics analyzed in the above passages: vague and executed.

What we empirically see after the May 2 warning was an embargo: All Philippine banana exports were halted and thus rotted at Chinese ports, which seemed to be the result of the intentionally ambiguous wording of “during this period.”

China’s General Administration of Quality Supervision, Inspection and Quarantine issued warning No. 49 on March 5, 2012, but limited this to bananas from the Philippines’ Sumifru Corporation: The warning explicitly stated that pests were found in bananas from Sumifru Corporation and stipulated a suspension of those bananas starting from March 6.101 In particular, the warning demanded more inspections but implied that those that were pest-free would be allowed in. The Philippine Bureau of Plant Industry conducted an investigation on March 10 and informed the administration of the implemented corrective measures on March 27.102 The administration seemed satisfied, as it did not raise the issue of Philippine bananas at all in April.

However, China issued another much more stringent warning on May 2, during the height of the Scarborough standoff, which stated that it would strengthen inspections of all Philippine fruit exports to China and that these would not be allowed to enter China “during this period.”103 The wording of this warning is particularly vague, without an explicit instruction regarding what “this period” meant. Furthermore, the March warning only singled out a specific company: Sumifru Corporation. The May warning extended the inspection to all Philippine fruit exports — not just Sumifru bananas — without any evidence that fruits from other sources were contaminated. Moreover, if the Chinese administration found the pest issue to be getting more serious, it is curious that it was silent for the entirety of April and waited until early May. What we empirically see after the May 2 warning was an embargo: All Philippine banana exports were halted and thus rotted at Chinese ports, which seemed to be the result of the intentionally ambiguous wording of “during this period.” Thus, the timing and extent of the ban indicated it was a case of economic sanctions, but it was intentionally vague because it was not announced as such.

Chinese government policy analysts explained the vague and executed nature of this sanctions episode. For example, Mei confirmed on June 1, 2012 that China did not officially announce the sanctions, adding that, given economic constraints, China needed to be smart about how to utilize economic sanctions.104 Mei specifically stressed that Chinese economic sanctions should be imposed in a way that would not increase the instability and uncertainty of China’s trade relations with other states, ensuring that most of China’s trading partners would still be willing to trade with China. This analysis implied that China’s vagueness had to do with concerns about the international trade institutions, of which the World Trade Organization was a huge part. Analyst Zhao Jianglin concurred with Mei’s argument.105 It is important to note that their statements were made during the sanctions period and were, therefore, not post hoc justifications of China’s behavior.

Research has shown that China used executed sanctions to send a stronger signal to other states that it is committed and resolved to defend its interests, which is in line with the signaling literature. On May 8, 2012, the People’s Daily stated that “the Philippines should not view China’s friendliness as weak and susceptible to bullying … China would not mind creating a ‘Scarborough model’ to stop the opponent and to deter any transgression.”106 Interviews with government policy analysts, former government officials, and scholars confirmed this rationale. For example, one senior Chinese government policy analyst stressed that China needed to “achieve a deterrent effect on surrounding countries,” termed explicitly by another scholar as “establishing resolve” of being viewed as strong and committed to defend its national security interests.107 From China’s perspective, executed economic sanctions in this case were considered to achieve greater demonstration and signaling effects, whereas the vague nature of the banana ban could potentially shield China from lawsuits in the World Trade Organization and thus avoid economic loss.

Issues Concerning Taiwan: Political Matters versus Weapons Sales

Because the Chinese government considers Taiwan as a “core interest,” it is acutely sensitive to issues involving Taiwan and uses economic sanctions to exert its sovereignty and autonomy against what it perceives as foreign interference in internal affairs. What is interesting, however, is the within-case variation in China’s economic sanctions behavior and rhetoric regarding Taiwan. As seen in Table 1, in all the political cases involving Taiwan, such as Lithuania establishing the Taiwanese Representative Office in 2021, Nancy Pelosi’s visit to Taiwan in 2022, and Tsai Ing-wen’s visit to the United States in 2023, Chinese economic sanctions were vague and executed. In contrast, in all the cases involving U.S. weapons sales to Taiwan (in 2010, 2015, 2019, and 2020), Chinese economic sanctions were explicitly announced yet not necessarily executed.108 These economic sanctions took place in the same time frame — post-2010 — and all were related to Taiwan. What, then, explains the variation in China’s sanctions rhetoric and behavior? Why are economic sanctions against U.S. weapons sales explicitly announced?

The answer lies in China believing that political matters and weapons sales regarding Taiwan are of a different nature, which, in turn, entail varying constraints from World Trade Organization rules (especially the security exception in GATT 1947). First, there is a marked difference in China’s rhetoric regarding political matters and weapons sales involving Taiwan. In all four cases of U.S. weapons sales to Taiwan, when the Ministry of Foreign Affairs announced economic sanctions against the United States, the spokesperson would emphasize explicitly that weapons sales to Taiwan “gravely harmed China’s national security” (yanzhong weihai le zhongguo guojia anquan, zhuquan he anquan liyi).109 In contrast, in all of the political cases regarding Taiwan, such as the Pelosi visit and Tsai visit, the spokesperson did not once mention “national security” — instead, the rhetoric focused on China’s territorial integrity and internal affairs.110 As noted earlier by Chinese government analysts and legal scholars, many of China’s economic sanctions are about political issues that cannot fall under the rubric of the national security exception of World Trade Organization rules, and this includes sanctions over political matters such as the Pelosi visit and Lithuania establishing the Taiwanese Representation Office. If need be, however, China could make the case that weapons sales to Taiwan would harm China’s essential national security interests.

Second, in the weapons sales cases, China imposed economic sanctions specifically on companies that sold weapons to Taiwan, such as Lockheed Martin and Boeing. The Ministry of Foreign Affairs’ rhetoric also established a direct link between these companies and China’s national security: To protect China’s national security interests, China will impose economic sanctions on U.S. companies that sold weapons to Taiwan.111 As noted in the previous section, in order for the security exception to apply, there must be a direct connection between the sanctions and national security. China could plausibly make the case that these U.S. companies are directly related to weapons sales to Taiwan, which China considers as the supplying of arms to a military establishment that could harm China’s national security. In contrast, in the political cases where China banned Taiwanese exports such as citrus fruits and pineapple (as in the Pelosi visit case), China could not make the case that Taiwanese fruit companies have a direct link to impacting China’s national security.

Therefore, behaviorally, China’s careful rhetoric, including emphasizing national security in the weapons sales cases and targeting only companies that sold weapons to Taiwan, suggests that China is fully aware of the constraints of World Trade Organization rules and makes use of the security exception clause. In the weapons sales cases, because China could utilize the security exception clause, economic sanctions were explicitly announced and the rhetoric centered around national security. In the political cases, however, just as in the Dalai Lama and maritime disputes cases, China cannot plausibly argue that these cases harm essential security interests, nor can it establish a direct link between the banned goods (be they bananas in the Philippines cases or pineapple in the Taiwan case) and the issue at hand. Because China cannot plausibly apply the security exception, its economic sanctions in these political cases remain vague.

Third, Chinese government analysts’ and scholars’ research also concur with the behavioral evidence above. For example, Zhang noted the restriction on what could count as essential security interests.112 Li made a similar argument, noting that China should be adept at using the security exception clause to impose economic sanctions to protect essential security interests. At the same time, Li explicitly stated that the security exception could not be applied to “political matters.”113 When discussing China’s explicitly announced economic sanctions in response to the 2010 U.S. weapons sales case, international relations scholar Shi Bin emphasized that China did so because it carefully analyzed the stringent conditions under which China could impose such explicit sanctions, noting that China used them cautiously.114 The “stringent conditions” term implies that Shi is aware of the constraints from the security exception clause. Yan Liang also emphasized that in the 2010 case, China “only sanctioned U.S. companies that sold weapons to Taiwan,” implying an understanding of the “necessary connection” discussion in World Trade Organization rules.115

Some might recall that when France sold 60 Mirage-2000 fighter jets to Taiwan in 1992, China also imposed harsh economic sanctions, including banning French wheat exports and opposing the French bid for a subway contract in Guangzhou while stopping the negotiation of new trade projects with France.116 These sanctions, however, were not explicitly announced. This might seem like a deviant case because China could potentially use the security exception to impose economic sanctions on Taiwan. However, the company that built the Mirage-2000, Dassault Falcon, did not have any business with China at that time. It was not until 2012 that Dassault Falcon established a subsidiary in China.117 If China were to explicitly announce economic sanctions, it could only target Dassault Falcon, but that would not be effective because China could not cause any potential damage to that company. As such, China instead targeted the companies and sectors that could hurt France the most. But because it could not establish a direct link between French wheat export or French subway contractors and China’s essential security interests, Chinese sanctions remained vague in this case. Chinese sanctions in 1992 were effective: When a special envoy of the French Prime Minister visited China, the two sides signed a joint communiqué on Jan. 12, 1994, in which the French stated, “due to concerns from China, the French government promises not to approve arms sales to Taiwan in the future.”118

As such, sanctions over political issues were imposed in a vague manner, whereas sanctions over U.S. weapons sales were explicitly announced.

China’s government chose to execute economic sanctions over political issues because, as in the case of the Dalai Lama and maritime territorial disputes cases, such vague and unannounced sanctions had to be carried out to send the intended signal to the target country.119 As Xue Benhui, Wang Li, and Yan noted, actual trade restrictions could damage Taiwan’s economy, thereby forcing Taiwan to make decisions in line with China’s interests.120 As to why China’s explicitly announced sanctions over U.S. weapons sales to Taiwan were mostly threats instead of executed sanctions, there are two reasons. First, Chinese scholars believed that because these sanctions threats were explicitly announced, they were signals of resolve, clearly sent.121 Second, scholars also pointed out that China needed technologies and high-tech products from the companies that sold weapons to Taiwan (e.g., Boeing aircraft) and therefore, China could not carry out those economic sanctions.122

In short, because of the varying difficulty in justifying economic sanctions through the GATT 1947’s Article XXI, the security exception, China chose to impose economic sanctions differently regarding U.S. weapons sales to Taiwan and political issues involving Taiwan, even though both concern Taiwan. China cannot convincingly argue that political issues such as the Pelosi visit count as essential security interests but could apply the security exception to weapons sales to Taiwan, if need be. As such, sanctions over political issues were imposed in a vague manner, whereas sanctions over U.S. weapons sales were explicitly announced. The next section examines alternative hypotheses and compares them against the argument that World Trade Organization constraints explain China’s sanctions rhetoric and behavior.

Alternative Explanations

There are three alternative explanations of why China uses economic sanctions in this way: an ideational-based argument emphasizing non-material concerns, a bureaucratic politics-based argument centering on local discretion, and a third argument focusing on the availability of legal foundations. The following passages will examine each of them.

Ideational-Based Argument

First, if the ideational-based argument advanced by Poh and Gloria is the most significant factor explaining vague and executed Chinese economic sanctions, then we should expect to see China’s sanctions rhetoric as well as Chinese scholarly writing centering on image concerns and describing sanctions through the “victimhood” discourse. We should also see China applying sanctions in a uniform manner. The empirical evidence, however, does not conform to these observable implications.

For one, there is variation in China’s sanctions rhetoric and behavior. While the majority of China’s sanctions are indeed vague and executed, economic sanctions over U.S. weapons sales to Taiwan were explicitly announced, which cannot be explained by ideational factors, including constraints of the victimhood rhetoric. Even if we apply the victimhood discourse to U.S. cases and argue that China could announce sanctions against the United States because China views it as the unfair hegemon (and, therefore, it is just to impose sanctions on those who victimized China), this does not explain the variation between politically driven sanctions and the weapons sales-related sanctions against the United States. For example, as shown in Table 1 and the appendix, China’s sanctions against Nike and the National Basketball Association were vague, even though both were U.S. entities. Moreover, in the Ministry of Foreign Affairs’ official statements over weapons sales to Taiwan, the rhetoric centers on national security and there is no mention of China’s colonial past or the notion of being a victim of hegemony.

For another, my China National Knowledge Infrastructure database search yielded about 250 articles. I further teased out the irrelevant results123 and zoomed in on about 70 articles directly related to the topic of China and economic sanctions. Except for one article that did mention basic values in one sentence124 and another article that centered on China’s international image and values,125 the rest of the articles all focused on or exclusively discussed the legal and cost-benefit dynamics of imposing economic sanctions.126 As one Chinese government analyst summarized, China’s behavior regarding economic sanctions can, by and large, be explained by rational cost calculation.127 Of course, this does not mean that China does not invoke its colonial past for rhetorical advantage when criticizing U.S. economic sanctions, but it does suggest that the ideational factor is not the primary concern when China contemplates how to impose economic sanctions.

Bureaucratic Politics Argument

Second, if economic sanctions rhetoric and behavior were driven by relevant agencies and specific to the bureaucracies, then a more plausible result would be sanctions rhetoric and behavior varying across different issue areas. Empirically, China’s sanctions rhetoric and behavior were largely consistent across issue areas: vague and executed. The only variation is in cases of U.S. weapons sales to Taiwan where sanctions were explicitly announced. If, hypothetically, agencies such as State Council’s Taiwan Affairs Office dictate sanctions behavior, wouldn’t we expect to see a distinct sanctions style exclusive to any Taiwan related issues, be they weapons sales or political issues? As noted in the Taiwan case study, however, China’s sanctions rhetoric and behavior differ between weapons sales issues and political issues concerning Taiwan.

Finally, interviewees from different Chinese government think tanks confirmed that sanctions decisions come from the central government.128 Chinese scholars also added that based on Article 16 of China’s foreign trade law, sanctions would be carried out as “administrative measures,” notified by the Ministry of Foreign Affairs to relevant agencies in the State Council to ensure coordination.129 As such, bureaucratic politics is not the primary factor explaining China’s sanctions rhetoric and behavior.

Availability of Legal Frameworks Argument

Third, some argue that we are seeing “official sanctions” imposed by China because of “a more solid legal framework to issue sanctions.”130 If so, then we should see a discontinuity, a marked difference in sanctions rhetoric and behavior before and after the establishment of those legal frameworks. The two most prominent legal documents are the “Unreliable Entity List,” released by the Chinese Ministry of Commerce in 2020, and China’s Anti-Foreign Sanctions Law, released in 2021. If these legal frameworks are the driving factor in changing China’s sanctions rhetoric and behavior, we should then observe a drastic change in China’s economic sanctions — from vague to explicit — around the 2020–2021 timeframe. Empirically, however, as shown in the Taiwan case study, the four cases of explicitly announced Chinese economic sanctions took place in 2010, 2015, 2019, and 2020. Further, even after 2021, many of China’s economic sanctions remain vague, including the ones against Lithuania and Taiwan. Therefore, the establishment of new legal frameworks does not explain variation in China’s preference for more explicitly announced economic sanctions.

Conclusion

Using primary Chinese-language documents, scholarly writing, and interviews with former Chinese officials and foreign diplomats, this article examines the characteristics of Chinese economic sanctions. First, many of China’s economic sanctions are about political issues that cannot fall under the rubric of the national security exception of World Trade Organization rules. Vague sanctions, therefore, are designed to give China plausible deniability and help it evade institutional constraints. It is only when China can plausibly argue that economic sanctions are imposed based on the national security exception in World Trade Organization rules, such as the cases of U.S. weapons sales to Taiwan, that Chinese economic sanctions are explicitly announced. Second, because many of China’s sanctions are unannounced, they might not be easily observed by other states if they are not executed. Therefore, in line with the signaling literature, China aims to achieve greater demonstration effects by executing economic sanctions instead of merely making threats, signaling not only to the target but also to potential challengers.

In other words, international institutions, including the World Trade Organization, both enable and constrain China’s sanctions rhetoric and behavior.

This article contributes to the international relations literature in two ways. First, in line with the signaling literature, China’s logic of executing economic sanctions confirms Schelling’s argument that states might take physical actions because they could be viewed by other states as more credible signals. More recently, Ahsan Butt argues that, in the post-Cold War era, the United States engages in what he calls “performative wars,” or wars fought to maintain a reputation for resolve and send a message to other states.131 In this sense, China’s foreign policy behavior shares some similarity to certain U.S. foreign policy actions. Some might wonder if other states have received China’s signal of resolve. Indirect evidence suggests that other states were observing China’s vague sanctions and some of them were deterred from doing similar things that irk China in the future. For example, South Africa declined to refused to grant the Dalai Lama a visa in 2014, with Foreign Minister Nkosazana Dlamini Zuma stating that “[l]et’s be honest, it was also about avoiding putting South Africa on a ‘collision course’ with China,” implying that South Africa was aware of the economic sanctions China imposed on other countries that received the Dalai Lama.132

Second, this article adds to the exciting new literature on Chinese economic statecraft, especially economic sanctions. It complements Audrye Wong et al.’s 2023 article that analyzes China’s consumer patriotism, which argues that China utilizes consumer boycotts because they provide China with plausible deniability, indicating that China has a cautious approach to both economic sanctions and patriotic boycott.133 Further, the article confirms Lim and Ferguson’s conjecture in their 2022 article that China’s logic might be explained by the risk of legal challenge and potential countermeasures under World Trade Organization or other international trade and investment rules.134 Moreover, this article is in line with Ferguson’s interesting 2022 article that connects economic statecraft with analysis of law and argues that legal rules could constrain states’ use of economic power under certain conditions while enabling its use.135 By creating a dataset of Chinese economic sanctions rhetoric and behavior from 1990 to 2023 and examining more cases with new empirical evidence, this article adds further empirical support to arguments in Lim and Ferguson’s aforementioned articles. In other words, international institutions, including the World Trade Organization, both enable and constrain China’s sanctions rhetoric and behavior. For example, in the 2010 case of the Senkaku disputes, China imposed a ban on rare earth exports to Japan. China did not invoke the security exception and executed the vague sanctions, which provided China with plausible deniability that the ban was a sanctions episode. However, this does not mean that Japan could not do anything. Japan did not sue China for imposing economic sanctions, but instead successfully sued China at the World Trade Organization for restricting trade. This suggests that countries could still use the World Trade Organization to constrain China despite the plausible deniability provided by China’s use of vague sanctions.

Relatedly, this article also demonstrates that China utilizes economic sanctions cautiously. Its consistent use of vague sanctions over the past three decades suggests that China is not suddenly becoming more aggressive.136 The fact that China tends to target a particular product or company instead of cutting economic ties with the target state completely also suggests China’s caution, which again illustrates the simultaneous constraints and enabling effect of a globalized economy on China’s economic sanctions.

Finally, in terms of policy implications, one might wonder how to deter China’s increasing use of economic sanctions. Since these sanctions are often vague and plausibly deniable, they can be difficult for smaller powers to deter on their own. As such, this article agrees with Victor Cha’s call for “collective resilience” — a collective economic deterrence strategy where countries could come together by promising to retaliate should China act against any of the countries.137 Although difficult to achieve in practice due to interest differences138 among the countries that China has used economic sanctions against, such a move might raise the cost of imposing economic sanctions sufficiently that even vague sanctions are not in China’s interests. Further, as seen in the rare earth case discussed above, the presence of a strong legal team could help, although it requires resources. Therefore, more resourceful countries could help smaller countries with legal resources so that they could also hold China accountable at the World Trade Organization. If China loses every single case on vague economic sanctions, it might be deterred from taking similar actions in the future.

 

Ketian Vivian Zhang is an assistant professor of international security in the Schar School of Policy and Government at George Mason University. Her first book from Cambridge University Press, China’s Gambit: The Calculus of Coercion, examines when, why, and how China uses coercion when faced with issues of national security. Zhang is currently working on her second book that explores the relationship between economic interdependence and rising power grand strategies.

Acknowledgements: The author would like to thank the reviewers, Dani Nedal, Madison Schramm, Chris Berk, Phil Martin, Jen Victor, Lucas Núñez, and Rob McGrath for helpful comments, and Declan Holmes for research assistance.

 

Image: Wang Yu Ching (CC BY 2.0)