This column was previously published in Les Echos on 22nd January 2021
By rejecting technology — that of the new vaccine and of 5G — France continues to sink into a “society of fear” whilst the Chinese “society of zeal” pursues its conquest of the 21st century. Far from being considered a disruption leading to a so-called post-Covid world, the pangolin is perceived in China as the harbinger of a speeding-up of digitalization. A century after the Roaring ’20s in the USA, China is entering its “Roaring 2020s” in the same spirit: the automobile of the 1920s has become the smartphone, the radio has been replaced by the influencer, the telephone call by the short video, the department store by “social commerce”, and electricity by solar energy. Jazz is yet to be replaced… but this may come!
Those who enjoyed 2020 will love the coming decade, for the digitalization of all human interaction, which has been forced through by the Covid crisis, means that all services in China will be recast. This will begin with those services that the West has arrogantly placed farthest from customer needs: banking, insurance, healthcare, education, nutrition and transport. These are all sectors in which China will reinvent itself as the “world’s butler”, by using artificial intelligence to develop services that break with the past, being personalized at affordable prices. ZhongAn, Ping An Good Doctor, Youdao, Futu, Douyin, Kaoshiou, TongCheng… the list goes on of new players who are keen to compete with “Alibaba and its 40 disrupters” and build up Chinese oligopolies that, in a second phase, will mount an attack on the rest of the world.
The digitalization of all human interaction, which has been forced through by the Covid crisis, means that all services in China will be recast.
The most surprising consequence to be expected in this decade will be China’s return to the world finance stage, two decades after its industrial come-back when it joined the WTO in 2001. This will happen because the upcoming “Roaring 2020s” will almost certainly lead to the same global excesses that brought about the monetary crises of the 1930s. The “whatever it costs” principle, currently adulated as much in Paris as in Washington, will contribute to the relative re-evaluation of the RMB in the coming years, notably in its digital form which, judging by pilot projects and the choice of the best of Chinese financial markets, is destined for a rosy future.
The main challenge
But, in these upcoming “Roaring 2020s”, the main challenge facing China will still be a social one. This digital revolution is turning out to be even more conducive to inequality than previous technological changes, because of the “winner takes all” economy. It will lead the Chinese authorities to a two-fold interventionism — the complete opposite of the Western pattern. Firstly, by preventative regulation with regard to fallacious business models, like that of the Ant Group, or to predatory practices like those of Alibaba in e-commerce, whilst the USA will continue to wallow in laisser-faire and Europe will attempt — belatedly — to stifle the GAFA. Secondly, by increasing political control of the population, half of whom have a monthly income of only $150 and who will have to wait some time before they see the famous “Chinese dream” at their door.
Angela Merkel and Ursula Von der Leyen have thought the time is right to sign an investment treaty between Europe and China, after seven years of discussions. At the beginning of this “roaring” decade, we can easily see why.