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Beijing: China, in its quest to emerge as a global power, is using economic coercion as a strategy to defend its objectives and interests, reported Geo-politik.

Beijing is putting forward a message to businesses and governments of financial consequences if measures are taken in a manner it sees as unacceptable.

This practice of coercion is successful in preventing parties from crossing boundaries that are sensitive to China’s interests, at times which it sees as a threat to its security, Geo-Politik reported.

The employment of recently established defensive economic measures, such as the anti-foreign sanctions law, as well as widespread boycotts, and trade and tourism restrictions are among them. Another tactic used against foreign businesses doing business in China is administrative discrimination. Exclusion from public procurement and penalties for claimed regulatory infractions are two examples of such actions.

Consumer products, commodities, and the service industries are Beijing’s most frequent targets. Businesses in these industries must accept the unsettling reality that their operations in China are extremely vulnerable, according to Geo-Politik.

Most instances of economic coercion are brought on by concerns with national security and sovereignty. This mostly refers to matters pertaining to Taiwan, other East, and South China Sea territorial claims, or human rights concerns. But as China becomes more adamant about defending its interests, the boundaries are becoming increasingly hazy.

Considered unfair treatment of Chinese enterprises abroad, such as prohibitions against Chinese network providers, notably Huawei, is one of the new red lines. However, businesses have also come under fire for supporting political parties that Beijing accuses of pursuing anti-Chinese policies and like in the instance of Australia over COVID-19’s beginnings in 2020, started to push back against governments harming its reputation.

The use of economic coercion does not indicate a positive trade partnership. Beijing relies on businesses to advocate for its interests by employing a carrot-and-stick strategy. But it would be extremely unsettling if international businesses decided it was safer to support China’s viewpoints and attempt to sway the policies of their governments toward China. But if China uses economic pressure too frequently, it will hurt its economy and lose some of its efficacy, Geo-Politik reported.

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