Authoritarianism on the Rise:

Can Democracies Counter China with Sanctions?

Democracies around the world have responded to Russia’s invasion with unprecedented sanctions. But this strategy has yet to succeed in halting Russia’s aggression, and it seems even more unlikely to succeed against China. How should democracies respond?

Authoritarianism is on the rise around the globe. While Russia’s war of aggression against Ukraine and China’s escalatory regional tactics in the South China Sea, Xinjiang, or towards Taiwan have dominated the headlines, these actions are part of a growing global trend.

The question now is how should democracies respond to reverse this trend? Military options and regime change have proven to be fraught with risk and also highly unlikely to succeed. In response to Russia’s invasion of Ukraine, the United States, Europe, and allies such as Japan and South Korea have levied unprecedented sanctions against Russia, severely harming Russia’s economy in the process. Yet Russia’s invasion continues unabated, although reports of negotiations in their initial stages could be viewed as promising. Alarmingly, this rise of authoritarianism extends to Western allies as well. According to a 2021 report by the Swedish nonprofit V-Dem, the “United States and its allies accounted for a significantly outsize share of global democratic backsliding in the last decade”.

If the United States, the EU, and their allies wish to hinder or punish future Chinese actions against Taiwan by imposing sanctions at a given point, as they have as a response to human rights violations in Xinjiang, the Russia blueprint is unlikely to succeed. China’s economy is much more intertwined with the global economy -  many countries are still reliant upon Chinese goods and manufacturing, and the Global South would be very unlikely to support these measures - and its financial and military power are far more capable than Russia’s. While targeted sanctions against certain Chinese industries could certainly hinder China’s aforementioned financial and military might, they will most likely fail to significantly alter Chinese behavior, and will also incur serious costs to the nations reliant upon the Chinese economy. Sanctions can be an option to counter authoritarian states, but sanctions alone will not suffice. Leading democracies must simultaneously undertake significant domestic reforms, including fighting corruption and money laundering, increasing renewable energy output, and supporting global infrastructure investment.

Numerous Challenges to Sanctions Success

While the Russian sanctions provide an interesting case study, there is ample evidence that sanctions are declining in effectiveness, even as their utilization has increased dramatically. In fact, by historian Nicholas Mulder’s figures, during the 1990s and 2000s, the use of sanctions doubled during the time period of 1950-1985. Then, during the 2010s, the use of sanctions doubled again. Yet during these time periods, the effectiveness of sanctions actually dropped significantly, with the chances of sanctions success dropping from 35-40 percent during the period 1985-1995, to below 20 percent in 2016.

These figures highlight a crucial issue – that even as the United States, the EU, and others have increased their sanctions use in the past three decades, their effectiveness has been steadily declining. Yet as a policy tool, sanctions are clearly here to stay. If democracies intend to utilize sanctions to counter authoritarianism, reversing this trend of declining effectiveness is crucial.  

The factors contributing to the decline of sanctions’ efficiency are numerous and varied. As the use of sanctions has escalated around the world, sanctioned nations have adapted their economies and found willing partners to undermine sanctions. Russia’s attempts to “sanctions-proof” its economy following its annexation of Crimea in 2014 are well-documented, and this experience provides a blueprint for other nations attempting to navigate life under sanctions. These sanctions also carry the risk of driving authoritarian states together, even those with traditional rivalries, as the current case of China and Russia illustrates. China has also developed closer relationships with Iran and Venezuela, both countries experiencing harsh sanctions from the United States.

Increased sanctions present administrative challenges to the nations implementing them. Later, sanctions often prove difficult to remove for political reasons. As the case of United States’ sanctions exhibits, this can lead to a bloated list of sanctions with vague or undefined strategic goals. An additional drawback is that with a bloated list of sanctions to monitor, enforcing them and ensuring they harm the intended targets becomes that much more difficult. Even as the Trump administration implemented new sanctions at a record pace, enforcement dropped twenty percent from President Obama’s second term. These challenges highlight the need not only for drastic sanctions reforms, but also serious domestic policy reforms to complement the changes to sanctions strategies.

Looking Ahead

There are steps that can be taken to enhance the impact of sanctions while also improving governance at home. Fighting money laundering and corruption, particularly big issues in the United States and United Kingdom, will prevent wealthy targets, such as Russian oligarchs, from stashing their money and avoiding sanctions. Another crucial step is accelerating the transition to renewable energies. Not only will this ensure that the planet doesn’t continue to warm at an alarming rate, it will also reduce dependency on oil from authoritarian states such as Russia and Saudi Arabia. Even as the European Union continues to implement new sanctions on Russia weekly, Europe is spending as much as 1 billion US-Dollar per day on Russian energy, according to some estimates. This is simply unsustainable if the West truly wants to punish Russia for its invasion of Ukraine.

Yet the solidarity that Western democracies and their allies have shown against Russia may act as a deterrent to future Chinese aggression. The fact that China has not supported Russia militarily or with significant public statements shows that Beijing does not wish to further isolate itself on the global stage, and instead still hopes to emerge as a global leader. Maintaining unity and consistency in the face of similar cases of aggression will be crucial in the future.

Finally, the United States, Europe, and their allies should step up efforts to utilize diplomatic, regulatory, cultural, and other soft power instruments to counter growing Chinese global influence. Through the Belt and Road Initiative (BRI), China has effectively increased its global economic ties throughout Africa, Latin America, and the Middle East. By 2035, there will be a 40 trillion US-Dollar global infrastructure funding gap, highlighting a massive opportunity for leading democracies to improve the lives of billions of global citizens and spread the democratic values of transparency and good governance. The Build Back Better World (B3W) and the EU’s Global Gateway initiatives are a good start, but tangible follow-up and actions are required for an undertaking this large.

These measures won’t be easy, and will require a significant amount of political will to have the desired impact. But China’s growing role on the global stage presents a serious challenge to fostering democracy and human rights worldwide. While sanctions against China alone will not be sufficient, there are numerous ways to counter China’s growing global influence that will simultaneously improve home governance. This is a win-win, and if governments fail to act now, this will surely be seen as a massive missed opportunity.  

*Adam DuBard is the Program Associate at the FNF World Order and Globalization Hub in Washington DC. This article is an excerpt of an in-depth policy paper on sanctions as a tool to counter authoritarianism. You can read it soon on freiheit.org.