By Peter Harrell, Elizabeth Rosenberg and Edoardo Saravalle
China has been a practitioner of economic statecraft throughout its history, and in recent decades since Deng Xiaoping opened the country in the 1970s. Today, one of President Xi Jinping’s central foreign policy initiatives, the Belt and Road Initiative (BRI), is a potentially trillion-dollar testament to Beijing’s commitment to using loans, infrastructure projects, and other economic measures as foreign policy tools. In the past decade, China has expanded its set of such economic instruments to include sticks, not just carrots. China has punished countries that undermine its territorial claims and foreign policy goals with measures such as restricting trade, encouraging popular boycotts, and cutting off tourism. These actions have caused significant economic damage to U.S. partners such as Japan and South Korea. The measures may also have long-term effects in deterring and shaping countries’ foreign policy interests that go well beyond the short-term economic costs.