Sanctions and Economic Warfare in the US–China Contest: The "Renmin School" Playbook
A review of "Sanctions and Economic Warfare" by Di Dongsheng, Ji Xianbai and Wei Zilong
“Once sanctions end, the initiating country should proactively rebuild economic relations with the targeted state to mitigate any chilling effect. Such compensation and assistance not only help realise the aims of the sanctions, but also prevent the targeted country from developing sanctions immunity. This lays the groundwork for maintaining the credibility of future economic-coercion threats, sending a clear message: resistance incurs heavy costs, whereas compliance brings tangible benefits.” — “Sanctions and Economic Warfare”, by Di Dongsheng, Ji Xianbai and Wei Zilong
Recent exchanges of blows over Sino–US export controls have underscored that dominance in global trade is likely to remain the central battleground among the world’s leading powers. Against this backdrop, we review Sanctions and Economic Warfare (July 2025), a book by a group of scholars at Renmin University of China. Treating trade and economic instruments as the primary tools of statecraft in the current geopolitical moment, the authors draw on a wide range of historical cases to develop a realpolitik-inflected sanctions playbook for China’s strategic direction.
It is a bleak conception of trade, in which economic exchange is subordinated to power and geopolitics, illustrated through cases ranging from the use of border markets (互市) in imperial China’s management of Inner Asia to the Reagan administration’s deployment of economic pressure against the Soviet Union. Yet it is also a compelling account of economic statecraft, advanced by scholars who would endorse the recent US National Security Strategy’s assessment that economics constitutes the “ultimate stakes”.
— James Farquharson
Key Points
Effective sanctions use strengthens asymmetric economic interdependence rather than erodes it, deepening a rival’s reliance on the sanctions initiator over time.
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.
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.
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.
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.
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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.
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.
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.
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.
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.
SANCTIONS AND ECONOMIC WARFARE
Di Dongsheng (翟东升), Ji Xianbai (嵇先白) & Wei Zilong (魏子龙)
Published by Renmin University Press in July 2025
(Illustration by OpenAI’s DALL·E 3)
I. Interdependence as Power
The deployment of rare earth export controls by China this October boosted the decouplers’ narrative that the death knell of Chimerican interdependence has sounded. While Scott Bessent described the restrictions publicly as a “clear decoupling message”, the head of Tsinghua’s CISS think tank, Da Wei, offered a congenial solution to the Sino–US trade woes on similar lines: first, consign economic interdependence and the broken liberal order to the past, and then allow the US and China to enjoy a “normal”—or partially decoupled—relationship by prioritising domestic development over great power competition.