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The West lacks a strategy to compete with China

Europe must learn from China, which pushes its political ideology on the back of economic success, argues Sigmar Gabriel.

BySigmar Gabriel

Published onSeptember 17, 2018 2:34 pm



Europe needs to stop Chinese economic incursions until the country plays fair. Source: DPA

For the first time since World War II, an emerging power poses a real challenge to Western political and economic dominance. China not only wants to carve out a place in our markets for its exports and products. It also wants — and has long wanted — political influence.

In reality, what we are witnessing is more than simply a clash of authoritarianism and democracy. This is an encounter between two starkly differing social models, one based on collectivity, including collective progress, the other highly individualistic. One a determined, “hungry” society, the other a satisfied, largely comfortable one. Risk-taking and a belief in technological progress confront risk aversion and skepticism about technology.

China’s resurgence to a decisive position in global politics is historically unprecedented. No other country has made such leaps of development, and none has achieved this kind of modernization, within just four decades. Now China is preparing to make another great stride on its path to world leadership.

Projecting power

The “One Belt, One Road” initiative, also known as the New Silk Road, does not represent nostalgia for the days of Marco Polo. It is a geostrategic conception of historic significance through which China is determined to project power and realize its world vision, in terms of trade, geopolitics and ultimately military strength.

China is the only country pursuing a long-term geopolitical idea. That is not meant as a reproach: On the contrary, we should respect China for its assertiveness and its extraordinarily rapid development in the last 40 years. But we in the “old West” should certainly reproach ourselves for failing to develop a comparable strategy. Only if we succeed in clearly defining Chinese and European interests — or rather, Chinese and American-European interests — can we strike a sustainable balance between all three sides. This approach would not be aimed against China. Instead, it would be a means of compromise between our differing values and interests, laying out a path to equilibrium in our multipolar world.

At unprecedented speed, China is creating tools to expand its spheres of interest. The New Silk Road initiative (possibly soon joined by an Arctic Polar Silk Road) is an instrument of geostrategic leverage, meant to bring Chinese economic and political conceptions deep into Asia, Africa, the Middle East and Europe. But the Chinese elite, at times conceited, may underestimate the possibility of a Chinese world order failing to cope with the challenge of digital transformation. Thus the Beijing leadership is following the worsening international situation with some concern.

To safeguard Communist Party power, Chinese President Xi Jinping has announced a massive program of investment in ultra-modern technologies. By the 100th anniversary of its foundation, the People’s Republic wants to lead the world in 10 key industries, including automatization and robotics, information technology, electric vehicles, aerospace, new materials, medical technology, pharmaceuticals, and agricultural equipment. Already, the stages outlined in Xi’s masterplan, “Made in China 2025,”make clear that China wants to overtake the West. Unlike Western market economies, Chinese economic transformation is driven by one-party autocracy.

Intelligent protectionism

The country is constructing spheres of influence according to its own ideas. Chinese walls protect state-owned enterprises and private companies alike. Although Xi Jinping, as guest of honor at Davos in 2017, claimed to be a defender of free trade and climate protection, Chinese business is engaging in an increasingly intelligent kind of protectionism.

China also poses other challenges to the West. There is no point in Europeans complaining when China steps in as a partner and financier of infrastructure projects in the Balkans and Eastern Europe. Instead, our challenge is to offer attractive alternatives to Eastern Europe and the Balkan states. Ever since 2012, when China established the “16 plus 1”summit as part of the New Silk Road initiative, there has been a risk of a split within the European Union: Along with western Balkan countries, some EU member states have joined the project, including the Czech Republic and Hungary. On the other hand, along with other EU members, Germany has joined the Asia Infrastructure Investment Bank, an initiative originally launched by China. This testifies to our readiness to help develop Asian infrastructure. German industry has indeed much to offer the Chinese initiative, but any participation must be within a fair, rule-based framework.

The massive military buildup in the Asia-Pacific region represents a real danger to peace. Regional spending on armaments has increased by almost two-thirds in the last 10 years. No wonder that India’s long-term concerns currently focus less on arch-rival Pakistan and more on China.

More than any other government, the Chinese leadership has faced up to the political challenges of globalization and digital transformation, consistently forging them into workable political models. Since Xi Jinping’s rise to power, the Communist Party has systematically sought complete control of society, looking to keep centrifugal forces and currents of opposition in check. Western arguments and warnings about human rights will not change the regime’s attitude. And the digital revolution has enabled the autocratic system to develop even more authoritarian management: Big Brother meets Big Data, so to speak.

The most drastic example of this is the “social credit system” — an ongoing evaluation of citizen behavior, including rewards and punishment, currently under development by the Chinese regime. In a combination of wide-ranging information technology and detailed control, the omnipresent party monitors its subjects’ social and personal lives. This allows the Communist Party apparatus to simultaneously lay out incentives and punishments from above. One of the high points of public humiliation so far has been the use of facial recognition technology to prevent excessive toilet paper usage in public facilities. Low-cost access to comprehensive data gives the Chinese leadership an instrument for early recognition of deviant behavior and to curb individual activities.

A strong economy, strong state

China represents a manifold challenge for us Europeans, including economic and political challenges. But for the great majority of the world’s population, who do not live in politically, economically or socially secure countries, China is proof that gradual poverty reduction can work in contexts other than liberal democracy. Going against the idea that successful, sustainable market economies require liberal democratic systems, China seems to have created a more powerful economy, but within a system contemptuous of civil and political freedoms. Around the world, this development has not gone unnoticed.

In the future, it will probably be more and more difficult to bypass China. But possibilities for good cooperation continue to exist. Germany should make use of these chances, supporting the multilateralism that is now emerging with China’s backing. That means, on the one hand, creating economic alliances across the European Union in order to compete with massively subsidized Chinese state-owned companies. On the other hand, we should also undertake direct economic cooperation.

In addition, the EU must conclude an investment agreement with China, guaranteeing reciprocal market access. This is a matter of legal security and trademark protection. One reason why talks toward this agreement have not moved forward is because the starting positions are so radically uneven: China has no compelling interest in opening up to investment as long as it can act relatively freely in Europe. For this reason, we must set limits to China’s foreign investment strategy, especially with regard to technology and security policy.

And China’s prowess, in which political influence is based on global economic strength, may help us preserve the relevance of our liberal democratic model. Here Europe can learn from Beijing: It could even copy China’s geopolitical strategy in an intelligent way by integrating humanity and sustainability into its own strategy. Only by offering economic advantage can the liberal democratic model hold its own against the Chinese solution.

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