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71. Between inflation and growth: for an ECB at the service of European power and strategic autonomy

Author:
Nicolas Goetzmann
Publication Date:
09-2023
Content Type:
Working Paper
Institution:
Robert Schuman Foundation (RSF)
Abstract:
The succession of shocks that have hit the global economy since the beginning of 2020 highlights the strengths and vulnerabilities of the different growth models of the major global blocs, namely the United States, China and the European Union[1]. While the United States can still count on domestic consumption, which is the unsinkable foundation of the country's development, China faces the necessary evolution of a model considered obsolete by its authorities[2]. From growth guided by a level of investment that will be difficult to sustain over the long term and a trade balance that is largely in surplus, Xi Jinping's China is under increasing pressure to support its domestic demand as a means of correcting its imbalances. Situated at the centre of this Sino-American competition, the European Union - and more precisely its heartland, the euro area - finds itself weakened by sluggish domestic demand and development based largely on foreign trade, the structure of which has been geopolitically undermined over the last three years. However, the shortcomings of the European growth model came to light in the aftermath of the great financial crisis, which pushed the GDP trajectory onto a path of stagnation, the first consequence of which was that it fell behind the United States, before being overtaken by the Chinese economy in 2021.
Topic:
European Union, Economic Growth, Inflation, and Strategic Autonomy
Political Geography:
United States, China, and Europe

72. How to Curb Investments in Chinese Technology: Initiatives and Debates in the United States

Author:
Mathilde Velliet
Publication Date:
08-2023
Content Type:
Policy Brief
Institution:
Institut français des relations internationales (IFRI)
Abstract:
In a continuation of U.S. efforts to slow China's development and acquisition of strategic technologies, Washington has imposed new restrictions on American investment in Chinese technology sectors such as artificial intelligence (AI), quantum, and semiconductors. On August 9, 2023, President Biden issued an unprecedented executive order, announcing notification requirements and prohibitions for U.S. tech investments in China. Three sectors are targeted: semiconductors, quantum information technology, and artificial intelligence. Washington’s main concern is that these investments are accompanied by technology transfers and “intangible benefits” contributing to the development of Chinese military capabilities. This concern, first voiced in the 1980s, has received a heightened political response since 2018. Considering the emerging consensus in Congress and the multiplication of bills, further measures are likely to be adopted in the coming months. The European Union and certain Member States are beginning to reflect on the consequences of U.S. measures, and on the relevance of adopting their own tools to control investment in China.
Topic:
Science and Technology, European Union, Investment, Artificial Intelligence, Quantum Computers, and Semiconductors
Political Geography:
China, Europe, Asia, and United States of America

73. How trade cooperation by the United States, the European Union, and China can fight climate change

Author:
Chad P. Bown and Kimberly Clausing
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Recent efforts to reduce greenhouse gas emissions have revealed different policy priorities; the United States and China have emphasized subsidy-based approaches, and the European Union has emphasized carbon pricing. These divergent policy choices—some lowering energy costs, others raising them—raise concerns about industry competitiveness and have implications for upstream and downstream firms in supply chains. This paper identifies the trade tensions resulting from varying climate policy approaches and describes policy efforts to address them. It then describes the role of a rules-based trading system in tackling the challenges that these distinct policy approaches create, examining World Trade Organization (WTO) rules on subsidies, border measures, and export restrictions. The authors suggest that the United States, the European Union, and China prioritize reforms to those rules as a path forward for cooperation on trade and climate. Such an approach would be an important starting point toward creating a functioning multilateral system.
Topic:
Climate Change, European Union, Trade, Cooperation, and Energy
Political Geography:
China, Europe, and United States of America

74. Reimagining Africa’s role in revitalizing the global economy

Author:
Amin Mohseni-Cheraghlou
Publication Date:
10-2023
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The world economy now finds itself at a critical juncture, facing a series of extraordinary setbacks that have pushed down growth. Reigniting growth requires a unique combination of targeted policies, robust international cooperation, and a renewed look at the global economy, with a particular focus on Africa. Due to its burgeoning and youthful population, abundant natural resources, and a strategic geographical location that can facilitate global trade, Africa can play a major role in—and should be front and center of—any renewed efforts for revitalizing the global economy. A decade-long robust, inclusive, and green growth in Africa will not only move hundreds of millions living in the continent out of poverty but will also accelerate a global rebound and recovery. However, for this to materialize, Africa needs substantial investments in its failing and inadequate physical and social infrastructure. With access to basic infrastructure, alongside efficient institutions as well as its young population, massive natural endowments, and strategic location Africa can seize its economic potential and act as an engine of growth for the global economy for decades to come. Therefore, it is crucial to support Africa to unleash its immense economic potential, through massive and focused investments in the continent’s human capital and its physical and social infrastructure.
Topic:
Development, International Organization, Reform, European Union, Regulation, Finance, Economy, and Economic Growth
Political Geography:
Africa, China, Europe, and United States of America

75. The Comeback of Industrial Policy. The Next Geopolitical Great Game

Author:
Alessandro Gili, Davide Tentori, and Paola Magri
Publication Date:
12-2023
Content Type:
Special Report
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
Industrial policies are the key element underlying today’s geopolitical scramble and a pillar of national security. Reacting to Western weaknesses and bottlenecks in the global supply chains, highlighted by multiple shocks such as the pandemic, the war in Ukraine, and the recent Israel-Hamas war, the US in first place and the EU later have started to introduce new industrial legislation aimed at making up for lost ground with respect to other industrial powerhouses, such as China. Besides being policy tools to accelerate the green and digital transitions, however, the US Inflation Reduction Act and the Net Zero Industry Act, as well as the US and the EU Chips Acts, entail subsidies, local content requirements and export controls targeted at strengthening the domestic industrial base for critical technologies, fostering strategic autonomy and de-risking from excessive foreign dependencies. This race poses risks for the weaponisation of industrial policies and fragmentation of international trade and also potentially jeopardises technological development. How can we strike a balance between economic security and efficiency? Which sectors are the most critical and which ones are the leading global powers pursuing? What will the consequences be for global value chains and international trade? Is it possible to reach an agreement on rules for a new level playing field to prevent economic competition turning into economic warfare?
Topic:
Development, Industrial Policy, National Security, Science and Technology, European Union, Geopolitics, Trade, and Supply Chains
Political Geography:
China, Europe, and United States of America

76. EU-China relations in an uncertain world: Walking a geopolitical tightrope

Author:
Sinikukka Saari, Niklas Helwig, Juha Jokela, and Mikael Mattlin
Publication Date:
11-2023
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
After the 2008 financial crisis, the EU’s approach towards China shifted from overconfidence in European normative power to an embrace of unconditional economic engagement with China. The EU policy of de-risking is critically important, but it needs to be carefully considered, managed, and communicated to China. US-China tensions and American debates on China impact the EU’s approach. Nevertheless, there are significant differences between European and US positions on China irrespective of which party holds power in the US. China’s position on Russia’s war of aggression is a make-or-break issue for the EU. By actively enabling Russia’s invasion, China is harming its own long-term interests in Europe and globally. It is in Europe’s interests to avoid framing current international dynamics in terms of “the West and the rest”. Although this discourse may be popular domestically, there is a danger of it becoming a self-fulfilling prophecy.
Topic:
International Relations, European Union, Geopolitics, and Economic Policy
Political Geography:
China, Europe, Asia, and United States of America

77. The EU and Taiwan: Normalizing the Status Quo

Author:
Jasper Roctus
Publication Date:
10-2023
Content Type:
Policy Brief
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
When I read Egmont colleague Sven Biscop’s My Summer in Beijing, I was just about to depart to a little-recognized political entity off the Chinese coast that – constitutionally, at least – still claims Beijing as part of its territory: The Republic of China (ROC/Taiwan). Unlike my colleague, I was not questioned on the academic desirability of my stay – Taiwan has over the last few decades consistently ranked in the higher echelons of academic freedom. I was, however, counselled on multiple occasions to reconsider by concerned family and friends who had seen sensational media reports claiming that the People’s Republic of China (PRC) could attack at any moment. Staying in a serene yet vibrant Taipei, visiting multiple places of interest and meeting with local scholars, I have noticed that confusion reigns not only in Europe toward Taiwan, but also in Taiwan toward Europe. Especially the cross-Strait position of the EU, which does not recognize Taiwan due to ‘its “one China” policy’ but has over the last two decades increased the scope of engagement with Taiwan, is little understood. As exchanges between Brussels and Taipei intensify, there is an increasing urgency to consolidate the EU’s position on Taiwan.
Topic:
Foreign Policy, European Union, and Strategic Engagement
Political Geography:
China, Europe, Taiwan, and Asia

78. EU-Pacific Talks: Taiwan and security dimension – lessons learned, Indo-Pacific containment

Author:
Adam Horry
Publication Date:
12-2023
Content Type:
Special Report
Institution:
Europeum Institute for European Policy
Abstract:
During the first debate of the third edition of the EU-Pacific Talks, organised by EUROPEUM Institute for European Policy, participants engaged in a lively debate covering various aspects of Taiwan's status. They discussed the economic, military and value drivers behind Taiwan's importance, addressing concerns about China's approach and lessons from other global conflicts such as the war in Ukraine. Read what our guests debated in this report by Adam Horry.
Topic:
European Union, Economy, Deterrence, Armed Conflict, and Russia-Ukraine War
Political Geography:
China, Europe, Taiwan, and Indo-Pacific

79. Let a thousand contacts bloom: How China competes for influence in Bulgaria

Author:
Vladimir Shopov
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
China is a geopolitical latecomer to Bulgaria, having traditionally shown more interest in other countries in south-eastern Europe. Beijing has long struggled to gain influence in Bulgaria due to the country’s EU membership and entrenched interests in sectors such as infrastructure and energy. China has responded to this challenge by adopting a multi-track strategy of engagement with state and non-state actors at the national and subnational levels. Beijing has significantly expanded its subnational cooperation with Bulgaria in areas such as culture, education, agriculture, research, public procurement, and e-governance. China has focused on strengthening its frameworks of cooperation and building relationships with local elites to circumvent national policies. China’s growing presence in Bulgaria has concerning implications in areas such as technology transfers, agriculture, research, ‘smart city’ and governance projects, control of critical infrastructure, and public procurement.
Topic:
Foreign Policy, Diplomacy, International Cooperation, and European Union
Political Geography:
China, Europe, Asia, and Bulgaria

80. Byting back: The EU’s digital alliance with Latin America and the Caribbean

Author:
Carla Hobbs and José I. Torreblanca
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
China’s and Russia’s growing presence in Latin America and the Caribbean undermines democracy and Western influence in the region, along with the international rules-based order. The EU is responding to this threat by attempting to strengthen its relationships with Latin American and Caribbean countries. The bloc is attempting to build on their affinity for European values and rights, as well their preference for sustainable and inclusive development. Cooperation on digital technologies should be a priority in the effort, given the region’s need for greater connectivity. The Spanish presidency of the EU should lead the formation of a Digital Alliance with Latin America and the Caribbean at a summit scheduled for 2023. The EU can make this alliance work by focusing on connectivity investments, cyber-security, and rights to support Latin American countries’ digital transitions. The alliance will also require a long-term vision within the EU, commitments from member states, leadership by several Latin American countries, and public-private investment partnerships.
Topic:
European Union, Democracy, Alliance, and Digital Policy
Political Geography:
Russia, China, Europe, and Latin America