China might abandon high-level diplomacy or use its economic might against neighbours if they agree to deploy US offensive intermediate-range missiles on their territory, analysts said. But such repeated action also risked undermining Beijing’s interests as tensions with Washington increased, they said. China has vowed to take unspecified countermeasures if the US deploys ground-based missiles in South Korea or Japan. The prospect of US missiles being stationed abroad has risen with the Washington’s withdrawal earlier this month from the Intermediate-Range Nuclear Forces Treaty. Under the treaty, signatories agreed “not to possess, produce, or flight-test” a ground-launched cruise missile with a range of 500-5,500km. According to US Defence Secretary Mark Esper, Washington wants to station intermediate-range missiles in the Pacific region within months. US national security adviser John Bolton has also suggested that the missiles could be deployed in Japan and South Korea. Adam Ni, a China researcher at Macquarie University in Sydney, said China was likely to take action against South Korea, Japan and Australia if the missiles were put in place, and that response might largely be economic. “Economic punitive measures, restricting [import] goods, harassing and coercing companies from these countries in the Chinese market [could be on Beijing’s table],” Ni said. “Economic leverage is the biggest leverage that China has. Many countries in the region have China as their largest trading partner.” Ni said China’s response could be even bigger than the informal economic sanctions it imposed on Seoul over its deployment of the Terminal High Altitude Area Defence (THAAD) system, an American array of radar and interceptor missiles designed to spot and knock out incoming ballistic missiles. Seoul said the system was meant to deter threats from North Korea, but Beijing saw THAAD as a security threat because it could be used to monitor China’s military facilities. After the decision to roll out THAAD, China indirectly embargoed South Korean companies and their products – including the Lotte conglomerate’s retail operations on the mainland – and boycotted travel to the country. US wants to quickly deploy new missiles in Asia, defence chief Mark Esper says Ni said Beijing could also suspend official talks and collaboration. “It may [suspend] or downgrade military-to-military relations to signal its displeasure. Other measures may also include restrictions on people-to-people flow, possibly visa restrictions,” he said. Zhao Tong, a fellow in Carnegie’s Nuclear Policy Programme, based at the Carnegie-Tsinghua Centre for Global Policy in Beijing, agreed that China’s response this time might be more severe than the action it took over THAAD because Beijing considered the US plan a “more direct threat”. “Beijing may calculate that Washington is intent on working with its allies to threaten China, and therefore only strong military countermeasures would be effective to meet the perceived challenge of US hegemony,” Zhao said. “Regardless of whether the retaliation would be largely economic, political, or military in nature, Beijing’s response could be more serious than during the THAAD dispute. US missiles, jittery neighbours and South Korea’s big security dilemma “At the end of the day, THAAD is a defensive capability whereas medium-range missiles can be used to conduct a wide range of pre-emptive precision strikes on Chinese military and political targets, posing a more direct threat to China.” But observers said that tough economic measures might not best serve China’s interests, particularly when it needed allies in its expanding trade war with the US. “Economic punishment from China is possible, although during the THAAD dispute China’s extensive economic pressure on South Korea did not yield desired results and in fact contributed to the erosion of their bilateral political trust,” Zhao said. “It is hard to tell if Beijing would again rely heavily on economic countermeasures.”
