Europe-China: interdependency is negotiable
This column was previously published in L’Opinion on november 16th 2022
The 1930s taught us — with Mussolini, Hitler and Pétain — that only extremely weak countries officially grant full powers to one single man. Is present-day China an exception to this?
The surprise that has come at the beginning of President Xi’s third term of office is the end of the balance of power that prevailed for the last 40 years between the Shanghai clan and the League of Communist Youth within the Chinese Communist Party. That the elite of the Party has agreed to this major break with the past cannot only be attributed to the presence of a regime of terror, as generally described in the West. It is more likely to be due to their recognizing that, because of the rise in indebtedness and the real estate crisis, an economic cycle has come to an end, calling for the economy to be drastically restructured, with painful social consequences.
The development of services — particularly digital B2C services — has been outlawed by the Party since 2021 because it believed this caused the risk of the rise of democratic counter-powers. Instead, the government has taken the dangerous step of moving towards nationalistic state-based self-sufficiency, banking on China’s export industry and focusing mainly on automation and decarbonization.
This choice means that “common prosperity” is no longer being considered to be the sum of the prosperity of individuals seen during the “Forty Glorious Years” [translator’s note: a reference to the “Thirty Glorious Years” of economic prosperity in France after WWII], but as the building of a national infrastructure enabling the country to improve its relative dependency on the rest of the world, even if the population has to make heavy sacrifices.
It is high time to put a stop to European self-flagellation over its excessive dependency on China, so as get on with the job of gaining a better understanding of how China is truly dependent on Europe.
Break. Faced by this break with the past, the United States has speedily redrawn the outlines of its strategy towards this new China. Firstly, “cooperation/competition/confrontation” will turn into technological confrontation, which is the main area of Chinese dependency. In early October, the announcement of unprecedented sanctions aimed at the semi-conductor industry clearly showed America’s aim of continuing to maintain its relative lead in the key sectors of high-performance microchips, artificial intelligence and quantum computing.
Europe has still not reacted. Neither has it defined the outlines of its general policy pattern of “partner-competitor-rival”, thereby rendering it ineffective, as illustrated recently in the case of the port of Hamburg. China has changed, so Europe must change. It is high time to put a stop to European self-flagellation over its excessive dependency on China, so as get on with the job of gaining a better understanding of how China is truly dependent on Europe, at a time when China’s domestic consumption will slow down over the long term, and access to American high tech is a thing of the past. Of course, Europe depends to a critical extent on China for almost 150 key products, but these only account for 5% of the worth of our imports from China, so, as its customer, could we not finally bring our power into play with regard to the remaining 95%?
We must stop deceiving ourselves by pursuing sovereignty through de-globalization, and renegotiate our interdependency through re-globalization, utilizing the weaknesses — fleeting at the moment, but potentially structural in the future — of this new China.
