How China Imposes Sanctions on U.S. Officials

Chinese President Xi Jinping has made clear that China will not accept North Korea as a nuclear power and will severely punish anyone it senses doing so. He has also warned the United States and its closest allies that if there is war, there can be no negotiation. This is interesting in that China itself was one of the biggest holdouts during the Iran nuclear talks, refusing to give Iran onshore oil facilities, even though Iran was developing nuclear weapons.

It was not long before China decided it was no longer playing such a defensive game and decided to come to the table with the six world powers involved in the negotiations. There are signals that China may now do just that. The official reaction was quick. “The United States has conveyed China’s position on the Korean issue to the Russian government,” said Chinese State

Department spokesperson Hua Zang. “We believe China has every right to uphold its rights and to bring China’s complaint to the United Nations Security Council.” Russia has yet to respond. China is one of the biggest trading partners for the United States and has a
massive amount of foreign debt, which it is trying to get rid of. Many speculate that China simply wants to regain lost US economic leverage in the world, but there is little reason for China to do so, at least at this point, when it appears that the US may well be too deep in the hole to get out without more substantial pain.

At the same time, the Chinese realize that the international financial system is increasingly weighted in China’s favor, with most of the world’s new growth currently coming from China, and they are working to get a bigger slice of the pie. Meanwhile, the US appears to be trying everything it can to impose more economic pressure on China to cut off some of its economic ties. The most recent moves
seem to be a sudden outbreak of warnings from top American officials to Chinese banks, credit card companies, and other corporations.

It appears that the United States is trying to find every available tool to put intense pressure on China to cut off trade flows. For now, however, the Chinese government is publicly stating that it will not cooperate with any efforts to impose economic retribution. As tensions rise between the US and China over one of their neighbor’s
territorial disputes in the South China Sea, the ramifications of China’s reaction to the United States economic saber rattles will be felt across the global economy.

As tensions rise, the Chinese government will have to make hard decisions regarding what to do, and how to respond. Some analysts believe that China may decide to increase exports in response to this pressure. This would serve two purposes: one, it would help relieve some of the pressure on the American economy; and two, it would also help keep the US dollar strong thus helping exports to remain high. Whether or not this scenario plays out remains to be seen, but one thing is for certain: China’s economy will be playing a major role as these economic rivalries heat up.

These days, the world’s attention is divided between the rising energy and economic rivalry between the US and China, and the instability that each brings to countries in Europe and Asia.  No matter how diplomatically or responsibly China’s actions are viewed, they will inevitably change the economic landscape of the global economy. As tensions rise and US officials publicly express concerns over its neighbors, China’s behavior will have repercussions not only on its own economy but also on the stability of the global economy.

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