It is a century and a half ago when British warships shot Chinese port cities in ruins to force the opening of the “Empire of the middle”! The deeper reason for the two “Opium Wars” (1839-1842 and 1856-1860) against China was that the British’s trade balance with China was hopelessly in deficit. The kingdom, the largest maritime and commercial power at the time, greed for top Chinese products, such as porcelain, silk and tea, but could not offer much itself, which the Chinese coveted.
With the victory over the Empire and the forced opening of trade policy, the sale of Opium from the British colony of India to China was pushed. The opium trade flourished, the British trade balance became active, every twentieth Chinese passive, namely drug addict. For China, the “century of shame” began, it became the game ball of the European powers such as Great Britain, France, Germany, Portugal, Russia, but also the USA and most recently Japan.
Today, 120 years after the last war of European and American powers against China, the West is once again in a deficit, both economically and financially, with its competitors in the Far East. In a gigantic scale. In 2018, the US trade deficit vis-à-vis China was $ 621 billion, while in the EU countries it was $ 215 billion Miese, while in the USA and the EU it was $ 836 billion. Each of the 1.4 billion living Chinese exported almost 600 dollars more goods to the highly industrialised west than he moved from there.
And once again, the capitalist metropolises react to trade imbalances with distrust, hostility and Martial means:
The US launched its aggressive Chinese policy a year and a half ago. “At the end of 2017, the Trump government published a new national security strategy. The PRC is a strategic rival that needs to be fought. There is now a competition between “free and repressive visions of the world order”. The US-weapons in this fight are the economy, war, Boycott and ban against Chinese companies and the economic all-purpose weapon “sanctions”.
As part of the bilateral trade talks, which are now taking place in the ninth round, China is trying to prevent the worst, a total trade war and a political Cold War. It will be forced to concessions. A possible ceasefire is likely to remain unstable.
Since the US declared its China relations to a “competition of systems”, the EU, in particular the leading powers of Germany and France, has also been making a tougher move towards China. Europe is trying with political pressure to force China to further open up its economic system and, with obstacles and walls against Chinese direct investment and “security-policy” exclusion of investors, to halt the country’s further rise. The EU Commission in China is now discovering more the economic challenger and competitor as well as the “systemic rivals” than the Partner. In unwavering loyalty to the United States, the EU is trying to use himself as a would-be dragon master.
China, on the other hand, wants to escape a two-front war with a Charme Offensive and economic enticements to individual EU countries. For the EU, on the other hand, China is the second most important trading partner, and for Germany, the most important one that one does not want to completely contradict, especially in view of the further prospects of the Chinese single market.
Now in March and April, the events and activities of the sino-European hanging party were over: the Chinese President Xi Jinping visited
At the beginning of March the countries of Italy, Monaco and France; against all diplomatic practices, French President Macron, Chancellor Merkel and president of the European Commission Juncker invited to the talks
on 12.3.19 the EU Commission published its “Joint communication” to the European Parliament and the European Council: “EU-China – Strategic perspectives”
then the EU summit of heads of government was held on 21-23 March with a focus on “China” on the basis of the EU paper
- April: 21. EU–China summit (EU Commission chief Juncker, EU Council President Donld Tusk and Chinese Premier Li Keqiang);
11 April in Dubrovnik: Annual Meeting 16+1 Format (China-CEEC= Central-Eastern European countries);
At the end of April, the second silk road summit in Beijing, with the participation of 14 EU-countries.
At its core, the EU-China dispute is about two issues:
Under what conditions is China allowed to enter the EU with infrastructure projects and bilateral agreements? It is particularly about the Chinese Globalization Project “Neue Seidenstraße”.
How can the EU force the further opening of China and vice versa against the increasing Chinese challenge? The creation of a single European industrial policy is an important building block in this respect.
China’s road to Europe
When Italian Prime Minister Giuseppe Conte signed a memorandum of understanding on cooperation in the context of the “new Silk Road” at Xis European visit, the panic broke out in EU core Europe. Of “China’s attack on Europe”, of “China’s grip on Europe”, the “Chinese bridge in the heart of Europe” was because of the speech; the danger threatened again from the East, this time as a “Yellow peril”. As “Trojan horses” were branded those 13 EU states, who had joined the Silk Road Initiative so far.
With Italy as number 14 is now an EU core country added, also founding member of the EU, third largest economy of the euro zone and G7 member. Brussels, Berlin and Paris urge that participation in foreign economic projects such as the Silk Road can only be decided by the EU and warned against the Chinese “debt trap”. This also applies, inter alia, to the 16+1 Format, in which China meets annually with 16 Eastern and South-Eastern European countries (including 11 EU countries) for cooperation on structural and economic issues.
The warning is cynical, considering that it was precisely the corporations and banks of the main EU countries that drove weaker EU states into debt bondage and the” Troika “ (EU Commission, ECB and IMF) then strangled them with debt servicing and drove them to sell off their state property. “It was we who urged the Greeks to privatise state ownership, including the port of Piraeus,” said Michael Roth, German minister of State (Ministry of economy). The Italians were in a similar Situation, and they also urgently needed investment.
China is now seeking to modernise and expand the ports of Genoa and Trieste (Porto di Trieste), in line with the agreement reached during Xi’s state visit; they could also become sites of Silk Road. The port of Piraeus, which the Chinese took over four years ago and extended to the end point and hub of the Maritime Silk Road, is this year Valencia (Puerto de Valencia) as the largest Container transhipment point in the Mediterranean. Since 2008, the volume of goods handled in Piraeus has increased more than tenfold, and it is planned to double further to ten million container units; in 2018 it was 4.91 million TEU, an increase of 21 percent compared to the previous year. The COSCO (China Ocean Shipping Company) wants to invest more than four billion dollars in the port of Piraeus.
While Germany wants to dominate the other EU countries in the area of Silk Road and order abstinence, it benefits itself splendidly from the Silk Road to Land. The Ruhr city of Duisburg with the largest inland port in Europe is camels Terminus of the “caravan of Steel”, as the railway-silk road in China is also called the; it is at the same time, the pivot point for the further distribution of the cargo of the 25 trains a week, each of 60 containers per train.
The idea of a new Silk Road, incidentally, comes from the USA, from Zbigniew Kazimierz Brzeziński and then Foreign Minister Hillary Clinton. In a 2011 India speech, Clinton said: “Let’s work together to create a new Silk Road. A whole network of economic and transit connections. A Vision for the 21st century.“Xi Jinping told his Vision in Kazakhstan in 2013: unlike the West, he has since made it a reality step by step. More than 80 countries have joined China’s Initiative. The map of the world economy is re-drawn. A Eurasian Economic Area will be created, which will have greater economic potential in a few years ‘ time than the transatlantic economic bloc.
From the factory Bank to a competitor
The times when China was mainly a profitable sales market for Europeans and a supplier of cheap goods are over. Meanwhile, the people’s Republic has become a serious competitor both economically and politically. In the European capitals, it is becoming increasingly clear that the EU must represent its interests vis – à-vis China more effectively than it has done so far-together.
This has now called on Germany and France to define a common defence strategy with regard to China at the European Council.
At the core of the demand for China is so-called reciprocity. It refers to reciprocal equal treatment in trade matters. Salopp: “like you to me, so me to you”. The EU “calls on Beijing to’ reciprocate ‘ market behaviour and also to abandon its model of state-controlled capitalism, together with The Associated industrial policy. This would distort competition and be unfair; on the other hand, it is increasingly self-criticism,” writes Stefan Baron, long-time editor-in-chief of Wirtschaftswoche and author of the book “The Chinese. Psychogram of a world power”, which was awarded as” economic Book of the year 2018”.
This demand for reciprocity cannot be persuaded, Baron believes that it is only fair in competition between the same. However, there is still “no equality of arms”between China and the western industrialised countries. China, measured by purchasing power parity, is now the largest economic power, but it is “still a developing country, ahead of which is still a long way, until it is fully modernized”.
Li Keqiang: “it is also a fact that the development in China is very unbalanced in urban and rural areas as well as in the different regions. Last year, GDP per head in China was only a quarter of the EU’s value, and for almost 600 million farmers in China, the average annual income available was less than 2,000 euros“ (ebenda). GDP per capita shows China’s comparatively low overall economic productivity. The Chinese economy ranked 82th in 2017, after Costa Rica, the Dominican Republic and Iraq. Bulgaria, the EU’s poorest country, ranked 64 with GDP per capita higher than China by 30%. It is like Deng Xiaoping once said: “Everything is a lot when you multiply it by a billion and everything will be little, when you divide it by a billion”. The factor is now 1.4 billion people.
Nevertheless, China opens its market in line with its development and its forces. While China is gradually expanding its trade Gates, Germany is increasing its door thresholds by means of investment controls and prohibitions for “security – relevant” areas and groups, and also by means of fines: “the EU has already imposed fines on imports from China in 93 sectors-far more than any other country” (HB, 22.3.19).
The EU’s powerful will no longer be able to enforce the foreign trade regulations of individual EU countries, such as Germany and France, vis-à-vis China. Juncker, Macron, Merkel & Co are urging that all EU states should be united with the economic power in the Far East. The “time of the European naivety is over” (Macron), Europe must speak “with one voice”. The EU’s dominant powers are Germany and France.
To this end, on 12 March 2019, the European Commission adopted the above-mentioned 10-point strategy paper “EU-China-Strategic Perspectives” on which EU heads of state or government met at the summit (21-23 March). The EU notes that, among other things: “China can no longer be regarded as a developing country, but has become an important global player and a leading technological Power.” As the EU target is issued to seek “more balanced, and reciprocal conditions for economic cooperation”.
Another objective: the EU must adapt to the ‘changing economic circumstances and strengthen its own domestic policy and industrial base’.
In particular, this refers to the “European industrial policy 2020”, which is to be developed by the next European Commission, which will take over the business in the autumn. Peter Altmaier’s “National Industrial Strategy 2030” should serve as a blueprint for Germany. The Chinese are once again to blame: “China is driving the EU towards a new industrial policy“. It is about the state subsidy of corporations and the construction of “European Champions”, which can exist as a Global Player. So it is not surprising that the corrupt car owner and former politician Troll Pofalla wants to replace the old signal system with a new ETCS at the railway. After the track is already concrete work for a building contractor, will now be subsidised by tax the industry of clay with € 21 billion.
At the international cartel conference held in Berlin on 14 March, Head of the cartel office Andreas Mundt showed his understanding of this industrial strategy: “the state has to think about how German and European companies can assert themselves against companies from protectionist systems that receive subsidies. It is a question of whether we need oligopolies or even monopolies to maintain the competitiveness of our companies“. One could also put the matter in a different way. Capitalism, this unbearable market seems to have lost.
Smaller EU countries, however, fear that Germany and France will subsidise their companies by billions, thereby distorting European competition. “Of course, our industrial base lives from the middle class,” she said. “But the truth is that, with regard to platforms, business and other, large players are necessary to reach market power and give SMEs an opportunity to develop. That is why tomorrow we will talk at the European Council about strategic issues of industrial policy“.
The markets for the rescue of the middle class!? That’s what you have to come up with. Stefan Baron writes on this subject: “what the new advocates of protectionism and industrial policy like to declare as” an end to naivety “ is more like suicide because of fear of death. Have they not always been superior to all other systems to a state-free, private competitive economy and Democratic political constitution?”
China’s system rivals
In the West, there is a growing recognition that the rapid rise of China and the backwardness of neoliberal capitalism has systemic causes. “In fact, the enormous growth of China in recent years, in some cases, creates doubts about the long-term superiority of the market economy model that is considered to be safe”. In the above-mentioned Ten-point document of the EU Commission “EU-China Strategic perspectives,” is China because, for the first time as a competitor and rival “systemic rival”) in a system of competition with the EU, described: “China is promoted in different policy areas, a cooperation partner, the EU followed closely coordinated objectives, a negotiating partner with whom the EU needs to find a balance of interests, and at the same time, an economic competitor in terms of technological leadership and a system of rival, alternative models of Governance”.
The EU is preparing a strategy to compete in the system after “the hope of a change in China to a free market economy has been shattered”. The EU is likely to shift from a strictly neo-liberal, capitalist market economy to a state-monopolistic type of capitalism (SMK).
Clemens Fuest, President of the Ifo Institute, talks about the challenges of the “third system competition”, which go far beyond the consequences of trade and capital flows also. “Can Chinese state capitalism produce more economic prosperity than Western market economies?”.
The original sources can be found on the German Website.