Imposing Costs On China – What Will That Look Like?


If there’s an ‘oral’ equivalent of seeing a ghost, I think I heard a ghost the other day when President Biden’s National Security Advisor, Jake Sullivan mentioned ‘imposing costs’ on the People’s Republic of China for its bad behavior.

That was a popular term in the Obama era.  And one heard it a lot at Pacific Command (then PACOM, now INDOPACOM) in Honolulu.

But the whole thing smelled of Secretary of Defense Robert McNamara’s approach to the Vietnam War. Apply just enough ‘graduated’ pressure – not too much, not too little – and the North Vietnamese would do what you wanted them to do.  And it was an efficient, cost-effective way to victory and required minimal sacrifice from the American public.  If only.  

The end result of Obama’s ‘cost imposition’ strategy – not that much cost was ever imposed?  By 2016 the PRC had taken de facto control of the South China Sea and seized our Philippine ally’s territory.  And the People’s Liberation Army was even more of a match for U.S. forces.  

To some regional nations it seemed like China was ascendant and the U.S. destined to be pushed out of Asia.  Plenty of Americans in the foreign policy class agreed.

But there was something condescending about the notion of imposing costs on the Chinese.  And remember that the expression ‘give them (the PRC) off-ramps’ was also in vogue at PACOM at this time – paired with ‘cost imposition.’

It was as if the Chinese were children who just didn’t know they were misbehaving.  And if they came to their senses they would see how the grown up world works – and which way the arc of history bends. 

With patience and more exposure to international norms they would become responsible stakeholders in the rules based order.

But it seems Beijing knew the rules perfectly well but wanted something different for themselves.

How much ‘cost’ is enough?

As for calculating the correct amount of ‘imposed costs’ needed to move the Chinese, it was probably a lot more than many people at PACOM imagined, and still is.

Today’s Chinese may not be able to ‘eat bitterness’ and endure the way their parents and grandparents did, but one shouldn’t underestimate their ability to absorb punishment.  And Chinese Communist Party (CCP) leadership just might let them absorb it – especially if the ‘payoff’ is attractive enough. For example, forcing Taiwan into submission and collapsing U.S. defenses and presence in Asia-Pacific in the process.

However, it’s not as if the PRC is immune to ‘costs.’  

One China scholar notes that Chinese military medical people have expressed great concern in journals and books on military psychology.  For example, how will the fact that China’s military is largely comprised of single children (i.e., no siblings), many of whom have been spoiled, affect their ability to operate in the face of overwhelming firepower and death?  This is a real concern, which probably isn’t talked about with the public but is talked about within the PLA.

And suffer high enough casualties; particularly deaths, and that just might provoke a response from the parents and families, who will no longer have old age support, as well as an end to their genetic line.

So when thinking about imposing costs, the U.S. should think about ‘maximizing’ Chinese casualties in the event of a conflict. 

You can bet the Chinese are thinking about maximizing costs – and casualties – on the Americans.  The Chinese may have to worry about losing ‘only children’ in a fight, but America also had better get used to the idea of losing 5,000 men and women in an afternoon. 

Considering that losing a 4-man Special Forces team in Niger in 2017 was considered a catastrophe – and prompted congressional inquiries – Beijing might think today’s Americans can’t eat nearly as much bitterness as today’s Chinese.

But imposing costs isn’t only a military calculation – even if that is important, especially when dealing with an expansionist, rapidly militarizing nation such as the PRC.

Making ‘costs’ personal

While Chinese Communist Party leadership may be willing to have their citizens absorb punishment, and a lot of it, they may not have such a high tolerance if ‘costs’ are imposed directly on them and their families.  

And the Biden administration has plenty of non-kinetic, non-military options for imposing such costs – and in peacetime.

Target CCP elites and their overseas wealth, expose it and seize it. Go after foreign bank accounts, real estate, and the bolt-holes in New York, Vancouver, London, Sydney and elsewhere.  And no more ‘green cards.’  No more of the good life for Chinese elites – who are already on the verge of becoming pariahs – owing to Xinjiang genocide and snuffing out Hong Kong peoples’ freedom.  And Covid-19 has made China far more enemies than friends around the world.

But to impose the one ‘non-kinetic’ cost that really matters to Chinese communist leadership, cut off the flow of foreign exchange – convertible currency – into the PRC. This is the ‘juice’ that keeps the CCP and its economy and  ‘international operations’ going.  

Here’s the test, however.  

Is the Biden administration willing to impose costs in a way that actually hurts the other side?  Or will it be done in a McNamara-esque fashion – with costs and pressure lovingly calibrated and applied in a way that makes sense in Washington (and that doesn’t inconvenience Wall Street and the Chamber of Commerce?)  

If so, the PRC can handle it all.

The Chinese can practically smell weakness.  And if the other guy thinks you are inclined to pull your punches and not willing to ‘go all the way’, he’ll just wait for you to tire and eventually give in.

In fairness, the Biden administration is just getting started and deserves both a chance and support.

Mr. Biden’s new foreign policy team – many of whom had earlier turns at the plate without distinguishing themselves – hopefully, learned their lessons about what works and what doesn’t with China.   

And maybe Jake Sullivan remembers what ‘imposing costs’ meant and led to in the Asia-Pacific during the Obama administration.  And it’s even better if he is now inclined to give the expression a new meaning.