As the CCP watches the Russian economy implode, Chinese leaders must shudder at the thought of what could happen to their own economy if it faced a similar onslaught. Although the communist regime would likely survive, given its tight control over the army and internal security services and its more robust and diverse economy, it would have to withstand a sustained, destabilizing shock with uncertain consequences. Moreover, it would face some erosion of its legitimacy, the public’s acceptance of its right to rule. The CCP’s two main sources of legitimacy are its reassertion of China’s central role in the world and, since Deng Xiaoping’s reforms, the party’s ability to grow the economy and significantly increase the living standard of most Chinese families. Any fundamental threats to that economy, now deeply embedded in world markets, would pose a significant political challenge.

Until Russia’s economy withered under sanctions, Beijing had little reason to fear similar punishment for invading Taiwan. After all, the world’s major economies did nothing when Beijing seized Hong Kong, in clear violation of its treaty commitments. They did nothing when they learned of the Uighurs’ mass imprisonment, “reeducation,” and deaths. They did nothing to sanction China for its role in spreading the COVID pandemic, and lying endlessly about it afterward. Based on that track record, Beijing must have figured the world would do little if it seized Taiwan. No more. Xi and his aides will need to recalibrate after seeing Russia hit with swift, draconian sanctions and largely excluded from world financial markets, despite the costs to countries imposing those sanctions.