More Sanctions, More Development : China's “State-Enterprise” Pathto Counter the U. S. Economic Sanctions

SONG Guoyou XIAO Fangxin

Abstract:

Since the Trump administration took officein2017, the U.S. government has frequently employed economic sanction sandexport controls against Chinese enterprises to serve its goal of strategic competition with China.  However, financial data from sanctioned listed enterprises reveal that the performance metrics of most enterprises have notonly remained largely unaffected but have also shown varying degrees of growth,presenting a counterintuitive phenomenon of “more sanctions,more development”.The main reasonis that in the context of China-U.S. strategic competition,the strong competition orientation of U.S. economic sanctions has prompted the Chinese government to intervene and fully leverage its financial and market capabilities to provide policy support for enterprises. Based on publicly disclosed data, including financial reports of sanctioned Chinese listed enterprises from 2017 to 2022, this study finds that the Chinese government has aligned its policies with the development strategies of sanctioned enterprises through direct fiscal support , bank credit guidance , IPO and refinancing approvals,market capacity building and so on.This has endowed enterprises with strong resilience in the face of sanction shocks,effectively mitigating and off setting the impact of U.S. sanctions.This“state-enterprise”approach provides a useful explanatory framework for better understanding the mechanisms of China's countermeasures against U. S.economic sanctions in the context of major power competition between China and the UnitedStates.

Keywords:

China-U.S. economic relations,strategic competition,economic sanctions,“state-enterprise”relations,economic counter measures