This Foreign Affairs article talks about taking tougher sanctions against Russia in case of a Russian invasion of Ukraine. Going through the arguments and suggestions, there aren't whole of viable ideas. And any success of sanctioning Russia to change the cost-and-benefit calculus would require Chinese cooperation, as it turns out.
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THE CHINESE FACTOR
The United States didn’t have to carefully weigh China’s potential reaction to imposing sanctions on the Kremlin in 2014. This was largely because the measures didn’t hit China in a meaningful way. Few Chinese-made goods were affected by the export controls, and China had no meaningful investments in Crimea. As a result, Beijing could condemn the sanctions but allow its companies to abide by them in the few instances that they had an impact on business.
But if Washington imposes much harsher sanctions, the Chinese response might be far different. China is Russia’s largest trading partner, after all. It’s unclear if Chinese companies would stop dealing with a major Russian firm that the United States chose to blacklist. Doing so would help strengthen U.S. financial power—and prove the potency of tools that could easily be used against China in the future. Russia and China have already collaborated to if U.S. sanctions obstruct their banking systems. If China chose to reject U.S. sanctions and its companies didn’t comply, it would put Washington in a tight spot. Chinese companies would be in violation of U.S. law, but any legal action against them would require risky escalatory measures such as imposing penalties on major Chinese firms.
The alternative, however, would be to accept that China need not follow U.S. sanctions, which would dramatically undermine their economic reach. The same dilemma applies to the Biden administration’s threat to cut off Russia’s ability to buy semiconductors, smartphones, or airline parts. Smartphones are mostly produced in China, for example, so any export controls on smartphone components would work only if China were willing to enforce them. Beijing could buck U.S. sanctions and dare Washington to retaliate—which would open a second front in a great-power financial war.
China has previously taken humiliating steps to avoid violating U.S. sanctions. Chinese state-owned banks, for example, refused to open accounts for Hong Kong’s chief executive, Carrie Lam, after the United States imposed sanctions on her. that have a chance of changing the Kremlin’s calculus, however, could force a rethink in Beijing. If there were ever a time to try to undermine American financial power, this would be it.
After all, in terms of their impact on the global economy, tough financial sanctions on Russia could well be the largest use of sanctions since the United States targeted Japanese finance and oil imports before World War II. This is why Russia may think the United States is bluffing when it threatens dramatic sanctions. The Kremlin believes it has a far higher tolerance for risk than its American or European counterparts.
If Biden is serious about using sanctions to shape Russia’s calculus, his administration needs to sharpen its messaging. The administration should name the Russian banks it would blacklist, the specific transactions it would prohibit, and the companies that would be in danger of going under. Then the Kremlin might start taking its sanctions threats more seriously.