This explanatory sequential mixed-methods dissertation examines the strategic application of economic warfare as a mechanism for degrading the People's Republic of China's (PRC) defense industrial base (DIB) and disrupting the military supply chain capabilities that underpin the People's Liberation Army's (PLA) modernization trajectory. The study addresses a critical gap in the scholarly literature: while individual components of economic statecraft directed at China—including export controls, financial sanctions, and investment restrictions—have received substantial attention, no existing research provides an integrated, multi-domain assessment of their collective effectiveness as instruments of capability denial against the PRC defense industrial base. Grounded in Farrell and Newman's (2019) theory of weaponized interdependence and drawing on economic statecraft frameworks from Hirschman (1945), Baldwin (1985), and Schelling (1966), the study adapts Andrew Marshall's net assessment methodology to analyze four interconnected domains: semiconductor supply chains, rare earth element dependencies, financial sanctions architectures, and technology transfer pathways. The research employs quantitative analysis—including time-series analysis, network analysis, and computable general equilibrium modeling—integrated with qualitative case study methodology and structured analytical techniques across 12 countries over the 1994–2024 period, drawing on seven primary open-source datasets including the Bureau of Industry and Security Entity List, OFAC sanctions data, UN Comtrade trade flows, and SIPRI military expenditure databases. The findings reveal that the United States and its allies possess extraordinary structural leverage through eight critical semiconductor chokepoints where allied firms exercise dominant or monopolistic market positions, including ASML's 100% monopoly on extreme ultraviolet lithography. However, these advantages are counterbalanced by China's 90% control of rare earth element processing, creating conditions of bidirectional weaponized interdependence. Financial sanctions achieve comprehensive coverage—with 68 NS-CMIC designated entities concentrated among five parent defense conglomerates—yet produce modest aggregate economic effects (approximately −0.3% of PRC GDP). China's defense spending continues to grow at a compound annual growth rate (CAGR) of 12.2%, and aggressive indigenous substitution strategies threaten to erode allied leverage over the medium term. The study advances three principal theoretical contributions: the concept of bidirectional weaponized interdependence, the capability denial paradigm as distinct from compellence-oriented economic statecraft, and the technology denial half-life framework for assessing temporal effectiveness. The dissertation concludes that economic warfare is most effective when conceptualized and executed as a multi-domain, coalition-based capability denial strategy targeting the temporal dimension of military modernization rather than seeking to compel behavioral change. Policy recommendations include expanding the semiconductor export control coalition, accelerating rare earth processing diversification, escalating select financial designations, and establishing dynamic calibration mechanisms for adaptive strategy execution.
Laszlo Pokorny (Thu,) studied this question.