Geoeconomics and economic statecraft are expressions that are frequently heard. Both terms have almost the same meaning, that is, to use economic and technological power to coerce other countries to exhibit friendly behaviors or refrain from hostile activities. Thus, economic statecraft, which includes financial sanctions, has been dubbed “war by other means.”
For Japan, and many other countries, it would be preferable to counter China and alter its behavior without military action. The United States and Japan, allies of advanced economies, appear to have agile statecraft capabilities.
However, living in the age of geoeconomics or economic statecraft, we should keep in mind the negative impacts. Japan needs to be cautious to avoid becoming trapped in an economic statecraft battle between the United States and China.
It is increasingly clear that the U.S.-China rivalry is escalating in terms of economic statecraft. Recently, Carry Lam, chief executive of Hong Kong, complained in a local TV interview that she could only use cash and was unable to use her credit cards because Hong Kong’s commercial banks closed her accounts after she was placed on the U.S. Treasury’s financial sanctions list.