Professor: Sanctioning China over Taiwan war too costly

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Readers will recall Profesor James Curran, the most persistent China apologist of 2020/21:

  • He is anti-American.
  • He is confused by Keatingesque fantasy and “China is inevitable” propaganda.
  • Is happy to sell Aussie freedoms for a few yuan more.

Having been wrong for several years now, and having learned nothing from Australia’s comprehensive victory over China is last year’s trade war, as seen by Beijing’s flip to kowtowing in Canberra, Professor Curran returned on the weekend to argue that the Ukraine regime of sanctions should never be applied to China in the event of an invasion of Taiwan:

The unanimity of the European position on Russia so far must surely make China contemplate what economic damage might come its way in the event it began armed intervention towards Taiwan.

Neil Thomas argues further that “severe economic sanctions are likely to deter Xi [Jinping] more than they did Putin, because of China’s greater integration with the global economy – although the costs to the West would be much higher as well”.

It is this question of costs, arising from the tightly woven fabric of global economic interdependence, that make this “new Cold War” totally unlike its predecessor. The use of sanctions in Asia would inflict huge costs to Japan, South Korea and Australia, and deal a harsh blow to south-east Asian economies.

The devastation, suffering and tragedy unfolding in Ukraine ought therefore to give pause to those dismissive of the catastrophic human and economic costs flowing either from a war over Taiwan or a concerted policy of sanctions against Beijing.

But just as thinking about future scenarios of this new Cold War ought to be factored into policymaking, it is imperative to understand how Western policy from the fall of the Soviet Union sought to exclude Moscow from a peaceful, prosperous and co-operative Europe, and therefore the implications if China was to be ring-fenced or contained with sanctions. China’s high levels of economic interdependence with the West are an important constraint on both sides and a powerful weapon for securing peace.

Likewise, can it be entirely forgotten that Washington’s pre-emptive strike doctrine, under which it acted alongside allies such as Australia and Britain in Iraq in 2003, and which resulted in hundreds of thousands of Iraqi and allied deaths, contributed to global disorder?

This is the flawed conceptual thinking that emerges when current events are so easily placed within a foreshortened past and when their interpretation suffers from the myopic vision of immediate experience.

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Let’s take each of these points one by one:

  • Yes, an economic embargo of China will have large costs. But what is the counter-factual? Either US allies fight a pan-Asian and possible world war to protect Taiwan or they let it go to China. The war is not worth fighting because it would most likely be lost or would spill over into the region. But giving Taiwan away without fighting for it economically would roll out the red carpet to the CCP to dominate all of Asia. It would end liberal democracy in our region and isolate Australia completely. What kind of cost is that?
  • Chinese integration with the West as an instrument of peace is fine so long as the CCP has no designs upon regional and global hegemony. But it does. The ecnomimc interdependence was allowed to develop on the assumption that it would liberalise China. It didn’t. But it must not now be used by China to illibileralise the West.
  • US pre-emption was not part of a Great Power strategy. It was part of the War on Terror against non-state actors. It shouldn’t be forgotten precisely because that context makes it irrelevant to today’s China debate.

In short, yes, the threat of economic containment of China to deter war in Taiwan, or box it in afterward, comes with high costs.

But not doing it comes with much higher costs – that is, losing our liberal democratic system entirely – and we should not be applying inappropriate strategic paradigms to muddy our thinking on the subject.

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Ask yourself, what is worse:

  • a nasty recession, or
  • your liberal democracy from being occupied by Beijing communists with gulags in the Pilbara for those that register a low “social credit score”?

Apparently, James Curran prefers the second.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.