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Policy report

Countering China’s coercive diplomacy

Prioritising economic security, sovereignty and the rules-based order
Other authors
Albert Zhang, Urmika Deb
International trade World politics Relations with China Diplomacy China Australia

The People’s Republic of China (PRC) is increasingly using a range of economic and non-economic tools to punish, influence and deter foreign governments in its foreign relations. Coercive actions have become a key part of the PRC’s toolkit as it takes a more assertive position in international disputes and seeks to reshape the global order in its favour.

This research finds that the PRC’s use of coercive tactics is now sitting at levels well above those seen a decade ago, or even five years ago. The year 2020 marked a peak, and the use of trade restrictions and state-issued threats have become favoured methods. The tactics have been used in disputes over governments’ decisions on human rights, national security and diplomatic relations.

The PRC’s tactics have had mixed success in affecting the policies of target governments; most governments have stood firm, but some have acquiesced. Undeniably, the tactics are harming certain businesses, challenging sovereign decision-making and weakening economic security. The tactics also undermine the rules-based international order and probably serve as a deterrent to governments, businesses and civil-society groups that have witnessed the PRC’s coercion of others and don’t want to become future targets. This can mean that decision-makers, fearing that punishment, are failing to protect key interests, to stand up for human rights or to align with other states on important regional and international issues.

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Policy Brief Report No.68/2023