An increasing number of sovereign actors have transformed economic interdependence into a weapon for economic confrontation. Photo: TUCHONG

In recent years, an increasing number of sovereign actors have transformed economic interdependence into a weapon for economic confrontation. This article defines “weaponization of interdependence” as follows: country A actively cuts off or reduces its connections with country B by exploiting B’s sensitivities and vulnerabilities within their mutual interdependence, for the purpose of undermining B’s interests or exerting pressure on B to change or influence B’s policies, thereby achieving A’s own political, security, or other goals.

Basis of power

Social networks comprise collections of social actors and their interrelationships, structured around two fundamental elements: nodes and edges. Any entity, regardless of its nature or size, can be considered an actor or a node, including individuals, companies, nations, and international organizations. An edge represents the link between two nodes, and can be physical channels such as weapons, currencies, and diseases, or non-physical channels such as information, norms, and influence. Within networks of interdependence, nodes hold relatively asymmetrical positions, and particularly “prominent” nodes are referred to as “hubs” in this article. Countries occupying “hub” positions exert greater influence on other countries and play a more substantial role in shaping the network’s overall structure.

Sources of power

Nodes and edges exist as objective elements within networks and are not inherently characterized by coercive qualities. They only become the power basis for weaponization of interdependence when a country leverages its positional advantage in the network and its ability to disconnect so as to achieve its own goals at the expense of others. Weaponization of interdependence relies on three types of power: “market-based power,” “resource-based power,” and “access-based power.”

Market-based power: There is often a substantial asymmetry between the consumption scale of large economies and the production scale of small economies with regard to a certain good or service. As a result, the market of an ultra-large importing economy can have an enormous impact on the development of certain industries within the exporting economy, and can even influence its macroeconomic stability. If an ultra-large economy weaponizes its market, the impact cannot be underestimated, even for other major economies.

Resource-based power: When an actor becomes a key supplier due to its possession of strategic resources, its actions can significantly affect related industries in the demand-side country. With global economic transformation and energy transition, the importance of natural gas, rare earths, lithium, cobalt, and other critical natural resources has increased, while high-tech products, information technology, as well as labor and talent are becoming new strategic resources. Resource-supplying countries may seek to achieve their goals by threatening to reduce or actually reducing resource supplies to target countries.

Access-based power: Hub countries, by virtue of their central positions, can influence the degree of connectivity between target countries and other nodes, directly or indirectly restricting target countries’ scope of activities within the network. This, in turn, can change the policies and attitudes of other nodes toward target countries, thus determining these countries’ vulnerabilities and sensitivities. In the global economic network, the actions of hub countries with market-based or resource-based power not only impact countries directly connected to them, but also ripple through indirectly-connected nodes, generating broader consequences.

Manifestation of power

Market-based power is primarily exercised to diminish the profits of target countries by reducing or cutting off connections with their markets, which often involves implementing trade policies such as imposing tariffs, restricting product prices, and prohibiting participation in public procurement. Resource-based power is typically employed through export controls, bans on investment in certain regions or certain sectors of target countries, and the suspension of resource supplies (information, technology, talent, services, etc.) to target countries. 

In terms of physical channels, the exercise of channel-based power mainly manifests as restrictions on the movement of people and goods as well as control over transportation chokepoints. Regarding non-physical channels, common tools for exerting channel-based power encompass bans on the provision of insurance, brokerage services, technical certification, and financial telecommunication services, lowering credit scores, and prohibiting the use of key knowledge.

Weaponization of interdependence has become an integral part of international relations. China must confront this challenge and conduct risk assessments and stress tests in fields such as science and technology, trade, and finance.

Sun Chenghao is from the Center for International Security and Strategy at Tsinghua University. Wang Yexu is from the European Studies Center at China Foreign Affairs University. Dong Yifan is from the Institute of European Studies at China Institutes of Contemporary International Relations.

Edited by WANG YOURAN