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ARAB NEWS REPORTS: Europe on a Geopolitical fault line between China and US

Europe on a Geopolitical fault line between China and US
Originally Posted: November 17, 2019 18:05
Ana Palacio
ArabNews.com


ARAB NEWS REPORTS - Two months ago, in his address to the UN General Assembly,
Secretary-General Antonio Guterres expressed his fear that a “great fracture” could split the international order into two “separate and competing worlds,” one dominated by the US and the other by China. His fear is not only justified, but the fissure he dreads has already formed, and it is getting wider.

After Deng Xiaoping launched his “reform and opening up” policy in 1978, the conventional wisdom in the West was that China’s integration into the global economy would naturally bring about domestic social and political change. The end of the Cold War — an apparent victory for the US-led liberal international order — reinforced this belief and the West largely pursued a policy of engagement with China. After China became a member of the World Trade Organization in 2001,
this process accelerated, with Western companies and investment pouring into the country and cheap manufactured products flowing out of it.

As China’s role in global value chains grew, its problematic trade practices — from dumping excessively low-cost goods in Western markets to failing to protect intellectual property rights — were increasingly distortionary. Yet few so much as batted an eyelid.

No one, it seemed, wanted to jeopardize the profits brought by cheap Chinese manufacturing,
 or the promise of access to the massive Chinese market. In any case, the thinking went,
the problems would resolve themselves because economic engagement and growth would soon
produce a flourishing Chinese middle class that would propel domestic liberalization.

This was, it is now clear, magical thinking. In fact, China has changed the international
system much more than the system has changed China.

Today, the Communist Party of China is more powerful than ever, bolstered by a far-reaching
artificial intelligence-driven surveillance apparatus and the enduring dominance of
state-owned enterprises. President Xi Jinping is set for a protracted — even lifelong —
tenure. And, as US President Donald Trump has learned during his ill-fated trade war,
wringing concessions out of China is more difficult than ever.

Many Europeans believe they can improve their strategic position by situating
themselves on the frontier between the two emerging worlds.

Meanwhile, the rules-based international order limps along without vitality or purpose.
Emerging and developing economies are frustrated by the lack of effort to bring
institutional arrangements in line with new economic realities. The advanced economies,
for their part, are grappling with a backlash against globalization that has not only
weakened their support for trade liberalization and international cooperation, but also
shaken their democracies. The US has gradually withdrawn from global leadership.

As a result, international relations have become largely transactional, with ad hoc deals
replacing holistic cooperative solutions. Institutions and agreements are becoming
shallower and more informal. Values, rules and norms are increasingly regarded as quaint
and impractical.

This has produced a golden opportunity for China to begin constructing a parallel system,
centered on Beijing. To that end, it has created institutions like the Asian Infrastructure
Investment Bank and the New Development Bank, both of which mimic existing international
structures. And it has pursued the sprawling Belt and Road Initiative — an obvious attempt
to position itself as a new “Middle Kingdom.”

Yet many, including in Europe, are not particularly concerned about the emergence of this
parallel system. So long as it brings ready access to project finance, it’s fine with them.
As Europe becomes increasingly alienated from the US, many Europeans also believe that they
can improve their strategic position by situating themselves on the frontier between the
two emerging worlds.

That strategy may offer some advantages, including opportunities for arbitrage. But, as
anyone who lives on a fault line knows, there are also formidable risks: Friction between
the two sides is bound to shake the foundations of whatever is positioned atop the boundary.

This is especially true for the EU, which is built on a commitment to cooperation, shared
values and the rule of law. If the EU aids in building a parallel structure that
contradicts its core values, particularly the centrality of individual rights, it risks
severing its meta-political moorings — the beliefs to which its worldview is tethered.

A Europe adrift will eventually sink. The solution is not for Europe simply to take
America’s “side” and turn its back on China (that, too, would run counter to European
values). Rather, the EU must heed Guterres’ call to “do everything possible to maintain
a universal system,” in which all actors, including China and the US, follow the same
rules.

In this sense, the recent joint statement by Xi and French President Emmanuel Macron
reaffirming their strong support for the Paris climate agreement is promising, as is
Europe’s growing recognition that China is not only a partner or economic competitor,
but also a “systemic rival.” But this is only a start. Europe needs a robust China
strategy that recognizes the profound, often subtle challenges that the country’s rise
poses, mitigates the associated risks, and seizes relevant opportunities.

Achieving this will require perspective and discipline, neither of which comes naturally
to the EU. But there is no other choice. As soon as Europe stops defending the rule of
law and democratic values, its identity — and its future — will begin to crumble.

Columnist
Ana Palacio
Ana Palacio, a former Spanish foreign minister and former SeniorVice President of the World Bank, is a member of the Spanish Council of State, a visiting lecturer at Georgetown University, and a memberof the World Economic Forum’s Global Agenda Council on the US.


Image Credit: IAEA Imagebank


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