Europe used to bring us a sense of technological oppression, and now it's their turn

"The more backward the more protectionism, the more protectionism the more backward", once led the technological change of Europe is now also caught in such a strange circle. Europe can "break the thief in the heart", and realize the technology leadership again? How will Europe deal with the relationship with China and the United States?
January 25, 2024
Yu Nanping
Professor with the Institute of International Relations and Regional Development Studies, East China Normal University
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“The more backward the more protectionism, the more protectionism the more backward”, once led the technological change of Europe is now also caught in such a strange circle. Europe can “break the thief in the heart”, and realize the technology leadership again? How will Europe deal with the relationship with China and the United States? On December 23, 2023, Professor Yu Nanping of the School of Politics and International Relations of East China Normal University will deliver a keynote speech at the 2023 Annual Conference of the European Society of Shanghai on the theme of “Europe and Sino-European Relations during the Turning of the Era”, responding to the above questions.

In the era of routine technological change, there is no great political and economic impact of technology per se; most technologies are flat transitions that lack “wow” moments. It is only when disruptive technologies create industrial revolutions that political and economic divisions are strengthened. In retrospect, nothing could be further from the truth.

Technologies such as artificial intelligence, quantum computing, and controlled fusion are now intervening in our economic lives, transforming the familiar political and economic scene. In the midst of this drastic change, we have already felt the sense of backwardness of Europeans in the face of technological oppression, and it is now clearly visible that all policies and all bills introduced in Europe are protecting their established interests.

I am very glad to see Mr. Dai Bingran from Fudan University here at today’s meeting. This reminds me of a decade or so ago, when two French professors came to the East China Normal University, Mr. Dai kindly suggested that if France continued to make luxury goods and consumer goods such as Chanel’s clothes and bags, it would be very uncompetitive in the future. At that time, the two French professors were very upset, saying that France had Airbus and TGV, which showed that they had a strong sense of technological superiority and pride at that time.

But now the situation has changed. More than a decade ago, the Chinese wanted to buy many things from Europe, but had no money and could not afford them. Now that the Chinese have money, the things they buy have changed. Objective facts are very simple, Airbus aircraft Chinese people can not buy more, buy too much lack of balance, because also take into account the Boeing and their own future C919 airliner, so from the long-term future, China may not need to buy so many Airbus aircraft. Even Mercedes-Benz cars are not something that the Chinese want to buy much at the moment, as the development of new energy vehicles in the country is having a price/performance ratio problem. And China wants to buy high-end lithography machines from Asmayr (ASML), but they won’t sell them.

In this case, how to solve the trade deficit between China and Europe? Therefore, no matter how Europe discusses, including the use of what kind of policy tools, in my opinion, the future scenario and pattern of competition in the global industrial chain, value chain and technology chain has been basically determined, which is an irreversible scenario.

From a technical point of view, the Sino-European relationship has become more competitive from the complementary nature of the past, so the bilateral relationship is no better. Some people say, if Germany now Merkel is still in place on the good, I said Merkel in, but also the same useless, to follow the basic laws of historical development, who are useless, because now between China and Germany has formed a very typical competitive relationship.

We look at the current domestic automobile market, November and October car sales share, overall German cars no longer have a particularly obvious advantage in the past; U.S. cars accounted for a significant decline in the proportion of Japanese cars still have some sense of existence, South Korean cars, French cars basically can not be found. This is the reality, and who can change these things? Any politician is powerless in the face of the material forces that Marx spoke of, and this is my basic judgment.

In this case, the action taken by Europe after feeling the oppression of rapid technological change was also very simple. Originally, Europe’s idea was that if it pushed forward according to all the plans it had made ten years ago, it should be ahead of us in many areas at this moment. In fact, Europe then “sacrificed” two relatively large strategies, such as energy transition, such as chips, electric vehicles, these industries it wants to do, but now it seems that Europe’s progress is slow. We look at the situation of new energy vehicles is very clear, we are currently imported from Germany’s share of the whole, in addition to the largest vehicle (oil vehicles), the remaining only a number of auto parts. According to my understanding, these spare parts imports are also being gradually replaced by domestic products.

It should be noted that we have a capability that Europe does not have, China has a large number of software engineers, we can write the program through the chip into the new energy electric vehicles. Now China’s electric cars are becoming more and more intelligent, so Mercedes-Benz cars do not have any advantage in this regard. Compared with domestic smart cars, Mercedes-Benz is a “stupid car”, you can’t talk to it. Our domestic electric car companies, such as Azure, Ideal, and Xiaopeng, can do all this, and you can ask it to do something directly through voice dialog, which is the change of the times brought about by technology.

In this case, the extreme rightist and conservative thinking in Europe came out, because they really can’t compete with us in a globalized environment. They even say that they need to follow the current path of the far right and “turn around”. There was already a lot of talk that the EU’s General Data Protection Regulation (GDPR) was already binding on Europe, and this new EU Artificial Intelligence Bill is not quite there, but it’s still going forward along the GDPR path.

Europe’s attitude has gone from being open or embracing the world in the past to being relatively conservative at the moment, not only responding to the far-right movement thinking within Europe as a whole, but also its policies and regulations that protect itself rather than embracing the world. This is a departure from the EU’s rhetoric of “multilateralism”. Moreover, from a certain point of view, Europe has always regarded itself as standing on the so-called leadership and high ground, which is why it was Europe that took the lead in introducing the so-called Artificial Intelligence Act compared to the United States and China. In fact, in my opinion, this is a visual manifestation of its lack of competitiveness. Competitive countries, such as the United States, had half a day’s internal discussion, but in the end, they did not come out with a similar bill, because enactment means self-restraint. Americans can discuss this matter in congressional hearings, but no one will bring up the need to immediately enact the Artificial Intelligence Act.

China has not prevented generative AI from expanding and being used on the B-side, even though China has also introduced regulations on generative AI. Europe’s approach is to protect the laggards, much like we have seen with various industrial policies in Europe and the United States. Therefore, in the future, what kind of political choices will Europe make under technological oppression?

The first question, the EU needs to cooperate with the United States, but at the same time resents the United States investing in its own behavior, which is the focus of the current dispute between the United States and Europe. The U.S. has subsidized a lot of itself through the Chip Act, which Americans call investing in themselves. Europeans also want to invest in themselves, but it is not the same as the U.S. The difference does not lie in the simple sense that Europe has a technological generation gap or talent problems. Because we see that, driven by capital, many excellent European engineers or scientists will run to the United States. At present, Google’s most powerful team of engineers have many Europeans, the chief scientist is a German, why they do not work in Europe and Germany, but run to Google to work? This is the current U.S. and European talent competition, including basic R & D capabilities in the talent competition. The realistic choice is that the EU can only cooperate with the United States, but the cooperation process is not so pleasant, Europe needs to protect itself, which is the core of their current debate.

The second issue, on the other hand, from a certain point of view, the EU will certainly see China as an alternative competitor, and therefore will be more conservative towards China in terms of technology. In the past, we used to say that “science has no borders”, but this is no longer the case. As for international cooperation programs, the International Thermonuclear Experimental Reactor (ITER), for example, the world’s and Europe’s largest fusion cooperation program is still progressing slowly. As far as I understand it, no particularly advanced new fusion technology will be implanted in the project until roughly 2045, because all the people involved know that they won’t be contributing their best to this field of international cooperation, but everyone is thinking about how to do it themselves.

The United States was doing it on its own, and China was doing it on its own. The United States has mobilized 6,000 people in a national laboratory to launch the new Manhattan Project for controlled fusion, and this is what the Americans are doing. Do the Europeans have the ability to mobilize 6,000 people on their own soil to do a new European controlled fusion project? I think this is more difficult. Because, in addition to Europe, the U.S. could have other peripheral additions, for example, the U.S. could collaborate with the U.K. and Japan on new tokamak devices.

In quantum computing, although the European Union has formulated some plans, we can see that in the context of the entire global industry, investment subsidies, European subsidies are trickle-down, that is to say, the European Union can get so much money, each person a little bit, but in the end, there may not be a project that we call “national project”. This kind of disruptive scientific research must rely on national engineering projects, such as the Manhattan Project in the United States in the past and the New Manhattan Project now. Trickle-down approach will not produce a convergence effect, and it is difficult to make a new “stunning jump”, therefore, my basic judgment is that, in the face of new technology pressure, combined with the overall status of Europe and technology reserves, Europe’s political and economic development prospects may have been or are missing the future of the era. Thank you all!


Yu Nanping
Professor with the Institute of International Relations and Regional Development Studies, East China Normal University
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