Against the backdrop of the recent Sino-US exchange of export controls, we review "Sanctions and Economic Warfare", a book by a group of scholars at Renmin University of China who elaborate their vision for China's economic statecraft through a wide-sweeping reading of history.

Key takeaways:

1. Effective sanctions use strengthens asymmetric economic interdependence rather than erodes it, deepening a rival’s reliance on the sanctions initiator over time.

2. The success of sanctions depends on whether short-term economic shock exceeds the adjustment capacity of the target, with shock-and-awe tactics more effective than gradual escalation.

3. Post-sanctions reassurance and trade normalisation reduce incentives for the sanctions target to diversify its trade links, preventing it from developing long-term “immunity” to future economic coercion.

4. Dynastic China’s management of steppe empires shows that exercising differential treatment towards rival economic blocs—penalising the strongest while rewarding the second-strongest—can fracture their internal cohesion.

5. Cognitive warfare can be employed to shape reactions to economic pressure, as the Reagan administration did during the Cold War by pairing economic pressure and encirclement with radio broadcasts in Eastern Europe.

6. Interdependence between the US economy and Chinese supply chains, alongside Chinese diversification to other trading partners, makes economic encirclement unfeasible as a US strategy towards China today.

7. China’s strategy of economic warfare should be embedded in a wider strategy of alliance-building and trade consolidation, strengthening the cohesion of its trade system through demonstrations of economic power.

8. China’s long-term success in economic warfare will depend on constructing a “parallel system” of trade developed with “potential allies”, particularly across the Global South.

9. Ideology and narrative framing are instrumental to sanctions use: China should tailor moral frameworks to the cultural psychology of third-party countries to secure broad-based compliance with its sanctions regimes.

10. Humiliation of another state through economic warfare cultivates collective identity formation among one’s own allied bloc, while projecting a perception of one’s invincibility among geopolitical fence-sitters.