Is Beijing Using Up Too Much Leverage?

The United States and China seemed locked in a new type of economic cold war. Each country has been using its economic ties to leverage against the other, and these moves have been very aggressive on both sides, especially lately.

Within the past week, The CCP (Chinese Communist Party) has demonstrated to the world its preferred strategy when dealing with speech it does not deem acceptable – cut the offenders out of the Chinese market.

In one week the CCP has made significant moves and threats against the NBA, Apple, Blizzard, and the creators of South Park. They have also ended a sister cities agreement with Prague. All of these moves were predicated on people making statements about Hong Kong, Taiwan, or references to human rights abuses carried out by the CCP.

When the CCP perceives and offense, it demands the “offender” take corrective action and issue an apology, if the “offender” refuses, they are cut from the doing business in China. We have seen this behavior with the NBA, Apple, and South Park, as the CCP believes it can control international speech because of economic ties. However, I wonder if the CCP is moving too swiftly.

I believe the pace of CCP threats in the recent week have opened eyes across the world to the dangers of doing business within the borders of China. Despite the vast size of a potential market, governments and companies now have a clear vision of the dangers they face if they become too economically entangled in China: their domestic decisions will be dictated by mandates from Beijing.

In addition to companies, the latest moves by Beijing should, and I believe have, opened many governments eyes to the threat of allowing CCP controlled companies to build critical infrastructure. There I think Beijing’s strategy may end up backfiring on themselves, as countries and companies that do business with them clearly see what bleak future lies ahead of them.

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