China: the unexpected winner of the European and the French parliamentary elections?
This column was first published in l’Opinion on june 24th, 2024
The rise of the far right in the European Parliament could keep the continent in an obsolete “peace economy” and accentuate the process of de-democratisation — to the delight of Beijing.
The spectacular rise of far-right parties in the European elections affects only two countries: France and Germany. They are also the two countries whose economies are most vulnerable with respect to China, and therefore the most likely to be affected by the disruption caused by the 20th Chinese Communist Party Congress. Since 2022, France’s trade deficit with China has widened drastically to almost $50 billion a year, and Berlin has significantly reduced its exports to China given the Chinese slow-down, which has fed into a new German trade deficit. In both cases, pressure put on employment in industry and commerce has brought more votes to the far right and enabled China to make significant progress towards attaining its objective of de-democratising the world.
Although the composition of the new Parliament in Brussels may be reassuring to pro-Europeans, the collapse of the Franco-German driving force considerably weakens Brussels’ future negotiating power with Beijing. Because it has constantly set aside defining its “systemic rivalry” with Beijing, Europe now finds itself unable to take any effective action with regard to China. This has just been illustrated by the example of electric vehicles: the additional import tariffs should only bring in around €2 billion a year, whilst Chinese government cumulative subsidies to the industry over the last ten years have amounted to €125 billion.
Artificially maintaining domestic demand will only serve to further increase the volume of imports from China, which now produces 30% of the world’s manufactured goods.
A war economy. Since President Xi came to power in 2012, China has entered a “war economy”, and has chosen to invest in production to the detriment of domestic consumption. Therefore it is surprising to read in the manifesto of the Rassemblement National [the far-right party in France] that it is readying itself not only to prolong but also to amplify the past mistakes of President Macron, who has remained in a “peace economy”. In artificially maintaining domestic demand by reducing VAT on energy, and in exonerating wage increases to low-paid workers from social security charges, this will only further increase the volume of France’s imports from China, which now produces 30% of the world’s manufactured goods. A population’s purchasing power can only truly be protected by means of productivity increases, which themselves result from improved education and training. Understandably, this reasoning may be hard to accept by the RN when, according to an Elabe survey, 50% of voters with educational level below the A level vote for RN, while only 17% among university graduates.
This conflict of interests between the RN and the much-needed intellectual awakening of the country reminds of the same conflict between Beijing and the digital development of its economy. From Beijing’s standpoint, since an increase in per capita wealth brings with it the risk of nurturing freedom of choice among consumers and, in the political arena, of paving the way to democracy, any expansion of the Chinese tech giants poses a threat to Party control over civil society. At least Beijing has had the excellent idea of promoting vocational training, seeing it as a key element in providing a competitive advantage for its 20th century industries, for which it seeks to take over the leadership from Europe. From this point of view, since it would mean France being locked even longer into a “peace economy”, a win of the Rassemblement National would play into China’s hands.
