Zongyuan Zoe Liu
Hearing co-chairs Commissioner Cliff Sims and Vice Chair Reva Price, Commission members, and staff, thank you for the opportunity to speak with you today. I commend the Commission for calling a hearing on this critical subject. My testimony today will focus on China’s attempts to develop an antidote to the West’s weaponization of the existing U.S.-led international trade and financial system against China.
The escalation of U.S.-China trade tension since 2018 and G7’s sanctions against Russian entities and individuals since 2022, notably the freezing of Russian foreign exchange reserves, have prompted China’s policymaking community to strategize immunizing the Chinese economy against Western sanctions and strengthen China’s financial security. Despite Western pressure and sanctions against Russia, China continues trading with Russia. During Russian President Putin’s visit to Beijing in April 2024, Chinese President Xi Jinping and President Putin strengthened their solidarity.
While criticizing Western sanctions against Russia as having no legal basis, Beijing has been pragmatically evaluating the danger of China’s reliance on Western countries for strategic industrial inputs and technology. Unabated U.S.-China geopolitical tensions and Western governments’ industrial policies to incentivize firms to reduce supply chain dependence on China have diminished trade between China and the West and fueled concerns among Chinese policymakers and academics about further intended decoupling. The Chinese government has accelerated its development of an anti-sanction policy framework and an alternative global system to prevent China from falling victim to Western sanctions like Russia did.
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