Nov 26, 2021 / News
A personal perspective on China’s relations with the “West”
A personal perspective on China’s relations with the “West”
Dr Georges Haour, IMD
For years, relations between the two “enemy-brothers”, China and the USA, have been on a collision course. Troubled to have such a powerful and fast rising challenger, the USA are exaggeratedly crudely rattling their saber. So does China, towards Taiwan and in the South China sea in particular. Mitigating climate change may, however, offers a powerful avenue to collaborate. Also, the world would be much better off, if Europe went down a different path, away from systematic confrontation, by engaging with China with a firm attitude, while strongly standing by its values. All this with a respectful attitude towards China. Depending upon the topic, there will be appropriate competing and collaborative postures. One area of common purpose is be the revamping and revitalising the Geneva-based WTO.
China’s ambitious Belt and Road Initiative (BRI), launched in 2013, is a multi-purpose plan, which, so far, has attracted attention mostly for its infrastructure projects: roads, high speed trains (to the Xinjiang, though Laos, etc…), ports (Hambantota, in Sri Lanka, and Gwadar, in Pakistan) and airports. Stimulating trade is the raison d’être of BRI, first by sea, second, by train, with a terminal in Duisburg. Concerning the BRI, three areas should receive more attention: SMEs, cultural exchanges and the digital arena, as discussed below.
SMEs (Small and medium size enterprises) constitute a large component of the European economies. They represent a crucial source for employment and exports. This is particularly true for the large SMEs of Germany’s “Mittelstand”. One way to create employment in Europe is for SMEs to leverage global markets more effectively. Europe should seize the opportunity offered by BRI to achieve just that. At the national and/or EU level, a one-stop service should be offered to SMEs, in order to help them boost their exports to the some 65 countries along the path of the BRI, all the way to China.
Cultural exchanges typically constitute a very low priority in the commerce between countries. This is unfortunate, as they contribute to better understanding between countries. This is particularly needed, as the ethnocentric West is very ignorant about China, which, in turn, sometimes displays a somewhat righteous attitude.
Cultural exchanges could mitigate current tensions. To make this happen, special funds should be allocated to organise translations of books, shooting of TV series and documentaries of fiction movies. These funds would also bring orchestras, or musical groups, to Europe, and vice versa. Political will is required, rather than large amounts of money. This action would involve agents and specialised firms, as well as better federating the efforts of cultural attachés from European embassies in Beijing, instead of each of them promoting their national culture.
The digital tsunami is transforming all activities. China is the world leader in 5G infrastructure and mobile internet. Alibaba recently purchased Lazada, an online shopping firm, active in south East Asia. That firm, as well as Tencent, Baidu and Huawei, are leaders in this sector.
An element of BRI is to build telecom infrastructures. It is relatively small, but growing fast. Between 2013 and 2019, the digital silk road has invested $17 bio in ICT projects, including $7 bio for fiber optics alone, such as the recently completed cable, by Huawei Marine, between Cameroon and Brazil. Huawei is handsomely benefitting from such projects. It is reported that Huawei’s prices are often 30% lower than those of competing Ericsson. Europe should be much more present, as a supplier of equipment, as well as promoting smart regulation of the sector for the world.
When considering relations between China and the West, common work on mitigating the destruction of nature, as well as on the three specific areas above would provide substantial, positive impact to the world.
Georges Haour is Professor at IMD. His area is Innovation/R&D Management, technology transfer and entrepreneurship. He acts as an advisor to firms and organisations. His latest book, “Created in China” (Bloomsbury, London) is on Innovation in China.
gh/nov 2021