Horst Walther

My near philosophical musings about the world in general its problems and possible ways out.

2024-03-18

Can We Still Afford Waging Wars?


"Anyone who has ever gazed into the glassy eyes of a soldier dying on the battlefield will think twice before starting a war."

These words are attributed to Otto von Bismarck. Given his political toughness, determination, and ability to enforce during his tenure as Prime Minister of Prussia and later as the first Chancellor of the German Empire, earning him the moniker "The Iron Chancellor," he was not known for sentimentality. Power politics was not an alien concept to him.

The current head of the Foreign Office, established by Bismarck, Foreign Minister Annalena Baerbock, who renamed the so-called Bismarck Room and removed a painting depicting the Chancellor, seems decidedly more bellicose. That our top diplomat saw Germany already at war with Russia could be dismissed as a slip of the tongue.

Yet, signals are mounting that we may already be on the brink of a pre-war era. At a closed security conference in November 2023, a former senior European official even questioned whether World War III might have already begun, noting that not all belligerents had entered World War II at the same time. The unspoken reference to the multinational conflict at our doorstep, which seems to have no end in sight yet harbours enormous escalation potential, was understood by all present.

The Enthusiasm for War

The political class's fervour for war across nearly all German parties and much of Europe is unmistakable.

On February 28, 2024, the newsletter Europe.Table reported a new strategy by the EU Commission, marking a "paradigm shift towards a war economy."

Shortly before, French President Emmanuel Macron stated that the deployment of Western ground troops to Ukraine could not be "excluded."

Outspoken hawks like Anton Hofreiter of the formerly pacifistic party "BÜNDNIS 90/DIE GRÜNEN," who supported the delivery of offensive weapons to Ukraine, are evident.

FDP defence politician Strack-Zimmermann expressed "astonishment" when the German Chancellor clearly rejected the delivery of Taurus cruise missiles to Ukraine, eliciting criticism from other parties.

Not just in Europe: In early 2023, Victoria Nuland, the third-highest U.S. diplomat, encouraged Ukrainian forces to continue attacking Russian military bases in Crimea, at the expense of Ukrainian and Russian populations. Even former U.S. President Donald Trump called her a warmonger, contributing to our closeness to a Third World War like never before.

It's noticeable that those advocating for further escalation of this proxy war have not experienced war themselves. They likely cannot imagine the horrors it entails, horrors that deeply scar all involved, burdening individuals for life and passing through generations.

Or, as Harald Kujat, a retired general of the German Air Force, former Inspector General of the Bundeswehr, and Chairman of the NATO Military Committee, describes the debates on weapons in Germany:

"There are people on German television with ten minutes of speaking time accusing the Chancellor of lying, who cannot tell a rifle from a cucumber."

The Lure of Wars

In 1911, Norman Angell, a Nobel Peace Prize laureate in 1933, published a ground-breaking book titled "The Great Illusion," arguing that war had become economically senseless. He believed that the interconnectedness of nations through trade and finance would prevent major conflicts.

His central thesis was that nations would not derive economic benefit from war, as it would disrupt global trade and prosperity.

Angell never declared war impossible, but his ideas resonated and influenced later discussions about war, peace, and conflict. His assumptions were based on a "chivalrous" treatment of defeated peoples, rooted in the Peace of Westphalia established in 1648, which lasted about 150 years. Apparently forgotten were the earlier, more archaic forms of war, where only one could survive, and genocide was a logical outcome.

Later, even Angell himself had doubts, and when 12 foreign ministers from Canada, the United States, and ten Western European countries signed the North Atlantic Treaty in Washington on April 4, 1949, founding NATO, Angell, by then knighted, supported the collective defence pact despite his pacifist background.

Wars seem to pay off, and as John Mearsheimer articulates in his widely cited book "The Tragedy of Great Power Politics," they are occasionally inevitable.

But is the damage not greater than the benefit?

And then there's the greatest of all technological threats. Martin Hellman, cryptography pioneer, co-inventor of the Diffie-Hellman algorithm, Turing Prize winner, and advocate for world peace, says: If we continue to wage wars, it's only a matter of time until nuclear bombs explode.

The "Mutually Assured Destruction" (MAD) doctrine, where superpowers possess enough nuclear arsenal to completely annihilate each other, was supposed to offer sufficient deterrence and lead to stability. The nuclear deterrence theory maintained

 a kind of balance of terror during the Cold War between the USA and the Soviet Union. Without the MAD threat, however, these weapons of mass destruction were recklessly used, as proven by the atomic bombings of Hiroshima and Nagasaki in August 1945, resulting in an immediate loss of about 200,000 lives.

MAD may have prevented nuclear wars, but wars continued to be waged below the nuclear threshold. The United States, protected by two large oceans and bordered by far weaker states to the north and south, last experienced war on its territory on December 7, 1941, with the Japanese attack on Pearl Harbor, Hawaii. Before that, it was during the War of 1812 between the USA and Great Britain and its colonies.

The temptation to wage wars is apparently great when one's own territory is unaffected. It's a cynical argument, but does the benefit outweigh the potential harm? At least for the arms industry, as evidenced by the United States, it seems to. U.S. arms manufacturers have the largest market share in the world. Forty companies from the United States are listed in the SIPRI list of the world's largest arms manufacturers, generating almost $300 billion in 2021, roughly half of the global revenue in the arms trade. For some stakeholders, wars thus pay off.

This also applies to wars that result in the annexation of territories promising strategic benefits, whether military or economic. Genocide is not a goal, at least not an avowed goal anymore, but a tolerated collateral damage. Ethnic cleansings as a result of wars continue. Whether it's our NATO partner Turkey in Syria, or its allied regime in Azerbaijan with the conquered Armenians, criticism is only expected from those who fall out of favor for other reasons. Wars still pay off if carefully dimensioned, camouflaged, justified, and conducted at the opportune moment.

But does this still hold true for larger conflicts, where an attacker can expect worldwide impairments or even damage on their own territory? We now rely on a vulnerable global infrastructure whose failure would end civilian life as we know it.

In February 2024, there was heated discussion about an anti-satellite space weapon that Russia allegedly developed, which could potentially destroy the low Earth orbit for everyone.

"If someone dares to detonate a nuclear weapon in the high atmosphere or even in space, it would be more or less the end of the usability of these global commons," said Major General Michael Traut, responsible for Germany's military space command, according to Politico Europe. "No one would survive such an action - no satellite, whether Chinese, Russian, American, or European." In such a case, satellites currently orbiting the Earth would turn into debris, creating dense fields of wreckage.

However, the civilian everyday life of the population on Earth, with telephones, computers, navigation, television, energy supply, and dependent services, in turn, depends on functioning satellites. Satellites thus constitute global, critical infrastructure. They are currently unprotected, perhaps even undefendable.

But what about critical infrastructure on Earth, i.e., the facilities, systems, services, and networks crucial for a society's functioning? They typically include:

  1. Energy supply: Power plants, electricity grids, oil and gas pipelines.

  2. Transportation: Airports, ports, railways, roads, and bridges.

  3. Communication: Telecommunication networks, internet infrastructure, satellite communication.

  4. Water and wastewater: Water treatment plants, sewage networks.

  5. Healthcare: Hospitals, emergency services, medical facilities.

  6. Finance: Banks, stock exchanges, payment processing infrastructure.

  7. Government facilities: Government offices, defence installations, data centres.

  8. Food and agriculture: Food production, warehouses, food distribution.

Apparently almost the entire infrastructure is to be considered as critical infrastructure. Its failure or impairment can have serious consequences.

Governments, businesses, and international organizations officially see the security and protection of critical infrastructure as a priority to ensure a society's well-being. This is already inadequately achieved in peacetime. We are far from comprehensive resilience, i.e., resistance to threats.

That the critical infrastructure of advanced industrial nations can still be effectively protected in a war scenario on their own territory is simply unimaginable. Our globally interconnected economy is easily vulnerable, our global supply chains sensitive and prone to disruption, our worldwide communication strands easy to interrupt.

Threats to the global supply chains we depend on are already diverse. They range from natural disasters to political instability to technical failures and pandemics. Some of the main threats are:

  1. Natural disasters like earthquakes, hurricanes, floods, and wildfires can block transport routes, damage infrastructure, and disrupt trade. Hurricanes like Katrina and Sandy, earthquakes like the Tōhoku earthquake in Japan, and wildfires in Australia and California have blocked transport routes, damaged infrastructure, and destroyed production facilities.

  2. Pandemics, health crises, disease outbreaks can lead to supply chain disruptions, as we recently experienced with the COVID-19 pandemic. It led to production shutdowns, factory closures, transport interruptions, labour shortages, and a huge increase in demand for certain products like medical equipment and household goods.

  3. Cyberattacks, whether criminal or politically motivated hacker attacks on information systems and logistics networks, can disrupt the operation of supply chains, cause data breaches, and compromise security.

  4. Political instability, local conflicts, terrorism, political unrest, and trade disputes can lead to border closures, sanctions, trade embargoes, and other restrictions.

So, the trade disputes between the USA and China and other countries led to tariff increases, trade embargoes, and uncertainties that affected international trade.

A recent attack on the German railway system severely disrupted the already fragile train traffic between Berlin and Hamburg.

On February 24, 2024, at least three undersea cables off the coast of Yemen were severed, disrupting worldwide internet and telephone connections. The cable Asia-Africa-Europe 1 (AAE1), also used by the German internet node operator DE-CIX, was cut. It is suspected that a cargo ship sunk by local Houthi rebels during wartime conflict severed the cable.

Conflicts are listed here only incidentally last. In reality, they can have the most significant impact. Even below the threshold of a large war, we thus have to accept massive economic losses and decreases in prosperity and quality of life, but also in human lives. The impairments in conflicts where one warring party can use clear military superiority remain limited, affecting the defeated or those uninvolved in the conflict or even taken as a price for victory.

The threshold to a large war can easily be crossed, whether intentionally or from an unforeseen "compulsion." Such a conflict with global implications has been looming for a quarter of a century; since China and the USA lost their common enemy with the collapse of the Soviet Union and the USA felt threatened by China in its role as a global hegemon.

This increasingly escalating conflict between the two countries already shows many signs of a Cold War. The parallels to the situation before World War I, when the then unchallenged world power England felt threatened by the rising, united Germany, are unmistakable. Just as easily as back then and without further conscious decisions, the "cold" war can become a "hot" war - the 3rd World War.

Even if this war, out of fear of mutual total annihilation, were fought exclusively with so-called "conventional" weapons, we must expect the collapse of entire economic spaces and civil society in larger geographical areas, associated with a very significant decrease in population. No one has yet explained how and for whom such a conflict could still "pay off."

The basic assumption that it would remain at "conventional" engagements could just as easily prove erroneous. Before a nuclear power admits defeat, it might indeed resort to the extreme, following the motto: "If we must go down, then please with a big bang. And then we'll take as many with us into our grave as we can."

In this context, Albert Einstein is often quoted as saying, "I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones."

Can we really still afford waging wars?


Können wir uns Kriege noch leisten?

 


Jeder, der einmal einem auf dem Schlachtfeld sterbenden Soldaten in die glasigen Augen geschaut hat, denkt künftig zweimal nach, bevor er einen Krieg beginnt. “

Diese Worte werden Otto von Bismarck zugeschrieben. Aufgrund seiner politischen Härte, Entschlossenheit und Durchsetzungsfähigkeit während seiner Amtszeit als Ministerpräsident von Preußen und später als erster Reichskanzler des Deutschen Reiches erhielt er auch den Beinamen der "Eiserne Kanzler". Ihm kann mithin kein besonderer Hang zur Sentimentalität nachgesagt werden. Machtpolitik war ihm kein Fremdwort. 

Die heutige Hausherrin im Auswärtigen Amt, das von Bismarck gegründet wurde, Außenministerin Annalena Baerbock, die das sogenannte Bismarck-Zimmer umbenannt und ein den Reichskanzler darstellendes Gemälde abhängen ließ, gibt sich da deutlich kriegerischer. Dass unsere Top-Diplomatin etwas undiplomatisch Deutschland bereits im Krieg mit Russland sah, konnte noch als Versprecher abgetan werden.

Dennoch mehren sich die Signale, die darauf hindeuten, dass wir uns möglicherweise bereits wieder in einer Vorkriegszeit befinden. Auf einer nichtöffentlichen Sicherheitskonferenz im November 2023 hatte ein ehemaliger hoher Europa-Beamter gar die Frage gestellt, ob der dritte Weltkrieg möglicherweise bereits begonnen hätte. Denn auch in den zweiten Weltkrieg seien nicht alle Kriegsparteien gleichzeitig eingetreten. Der unausgesprochene Bezug auf den Multinationenkonflikt direkt vor unserer Haustür, für den niemand eine Hoffnung auf ein baldiges Ende hegt, der andererseits ein enormes Eskalationspotential hat, wurde von allen Anwesenden verstanden.

Die große Kriegsbegeisterung

Die Kriegs Begeisterung der politischen Klasse durch fast alle Parteien Deutschlands und großer Teile Europas ist unverkennbar. 

So vermeldete der Newsletter Europe.Table am 28. Februar 2024 eine neue Strategie der EU-Kommission, einen „Paradigmenwechsel hin zur Kriegswirtschaft“.

Kurz zuvor hatte der französische Präsident Emmanuel Macron erklärt, dass die Entsendung westlicher Bodentruppen in die Ukraine nicht "ausgeschlossen" werden könne. 

Ausgemachte Scharfmacher gibt es mit Anton Hofreiter sowohl in der ehemals pazifistisch orientierten Partei der „BÜNDNIS 90/DIE GRÜNEN“, der beispielsweise die Lieferung von Offensiv-Waffen and die Ukraine befürwortet

Auch die FDP-Verteidigungspolitikerin Strack-Zimmermann zeigt sich „fassungslos“, als der deutsche Bundeskanzler einer Lieferung von Taurus-Marschflugkörpern an die Ukraine eine klare Absage erteilt. Auch von anderen Parteien kommt Kritik

Natürlich nicht nur in Europa: Anfang 2023 ermunterte beispielsweise Victoria Nuland, die dritthöchste US-Diplomatin, die ukrainischen Streitkräfte dazu, weiterhin russische Militärstützpunkte auf der Krim anzugreifen - auf Kosten der ukrainischen und russischen Bevölkerung. Selbst der ehemalige US-Präsident Donald Trump nannte sie daraufhin eine Kriegstreiberin, die dazu beitrüge, dass wir einem Dritten Weltkrieg noch nie so nah wären, wie jetzt.

Es fällt auf, dass sich im Wesentlichen Personen für eine weitere Eskalation dieses Stellvertreterkriegs stark machen, die selber keinen Krieg erlebt haben. Sie können sich vermutlich keine Vorstellung von den damit einhergehenden Schrecken machen. Das sind Schrecken, die sich tief in die Seelen aller Betroffenen eingraben, diese Menschen ihr Leben lang nachhaltig belasten und über Generationen weitergegeben werden.

Oder, wie Harald Kujat, General a.D. der deutschen Luftwaffe, ehemaliger Generalinspekteur der Bundeswehr und Vorsitzender des Nato-Militärausschusses die Debatten, die hierzulande über Waffen geführt werden, beschreibt:

"Da sind Leute im deutschen Fernsehen mit zehn Minuten Redezeit, die den Bundeskanzler der Lüge bezichtigen, die nicht mal ein Gewehr von einer Gurke unterscheiden können."

Auch ein weiteres Muster fällt ins Auge, das den meisten Kriegen zu eigen ist: Die Mehrheit der Deutschen lehnt Taurus-Lieferung an die Ukraine ab, schrieb die Die ZEIT am 7. März 2024.

Laut einer Umfrage sind danach 62 Prozent der Deutschen in Sorge, dass Deutschland durch die Lieferung von Taurus-Raketen direkt in den Krieg Russlands gegen die Ukraine hineingezogen werden könnte. 

Es ist ein schon oft beobachtetes Phänomen, das die Beteiligung an Kriegen, in den Völkern weniger populär war und ist als bei deren Führern. Intuitiv ist diese Zurückhaltung unmittelbar nachvollziehbar: Es ist schließlich der sprichwörtliche kleine Mann aus dem Volke, der dafür im Zweifel seine körperliche und mentale Gesundheit oder gar sein Leben einsetzen muss, oft das seiner Familie ebenso. Es sind nicht die Führer, die ihren Kopf hinhalten müssen.

Wie der angesehene amerikanische Politikwissenschaftler und international renommierte Experte für Internationale Beziehungen John Mearsheimer in seinem Buch "Why Leaders Lie: The Truth About Lying in International Politics" darlegt, belügen die gewählten Führer von Staaten ihr Volk oft, um es für eine Unterstützung eines Kriegseintritts zu gewinnen.

Danach sind Lügen ein integrales Element der internationalen Politik: Mearsheimer argumentiert, dass Lügen ein häufiges und notwendiges Mittel sind, das von politischen Führern verwendet wird, um ihre Ziele zu erreichen und die Interessen ihres Landes zu verteidigen. Er betont auch, dass Lügen oft als legitim angesehen werden, wenn sie im nationalen Interesse liegen.

Haben wir unsere Volksvertreter dafür gewählt, dass sie uns „zu unserem Besten“ belügen? Demokratie hatte ich mir einmal anders vorgestellt. Dass speziell in Krisenzeiten eine transparente Regierungsarbeit behindert und damit ein vertrauensvolles Verhältnis zwischen Volk und Volksvertreter beschädigt werden musste der Deutsche Bundeskanzler Olaf Scholz unlängst erfahren, als er nach einem Bürgerdialog von NATO-Partnern des Geheimnisverrats bezichtigt wurde.

Lohnen sich Kriege eigentlich?

Im Jahr 1911 veröffentlichte Norman Angell, Friedensnobelpreisträger von 1933, ein bahnbrechendes Buch mit dem Titel "The Great Illusion". Darin vertrat er die Ansicht, dass Krieg wirtschaftlich sinnlos geworden sei. Er glaubte, dass die Verflechtung der Nationen durch Handel und Finanzen große Konflikte verhindern würde.

Seine zentrale These lautete, dass die Nationen keinen wirtschaftlichen Nutzen aus einem Krieg ziehen würden, da er den globalen Handel und Wohlstand stören würde. 

Angell ausdrücklich erklärte nie, dass Krieg unmöglich geworden sei. Seine Ideen trafen damals einen Nerv der Zeit und hatten einen starken Einfluss auf spätere Diskussionen über Krieg, Frieden und Konflikte. Seinen Argumenten lag die unausgesprochene fundamentale Annahme eines „ritterlichen“ Umgangs der Sieger mit den besiegten Völkern zugrunde. Diese Annahme hatte ihre Wurzeln in der Westfälische Friedensordnung, die im Jahr 1648 durch die beiden Friedensverträge von Münster und Osnabrück geschaffen wurde und etwa 150 Jahre lang Bestand hatte. Vergessen waren offenbar die früheren, archaischeren Formen des Kriegs von Volk gegen Volk, bei dem nur eines überleben konnte und der Genozid das logische Ergebnis war.

Später kamen dem idealistischen Pazifisten Norman Angell selber Zweifel und als 12 Außenminister aus Kanada, den Vereinigten Staaten und zehn westeuropäischen Staaten am 4. April 1949 in Washington zusammenkamen um den Nordatlantikvertrag zu unterzeichnen und damit die NATO zu gründen, unterstützte, der inzwischen zum Sir geadelte, Norman Angell trotz seines pazifistischen Hintergrunds den kollektiven Verteidigungspakt.

Kriege scheinen sich offenbar nach wie vor zu lohnen. Und wie wiederum John Mearsheimer in seinem vielzitierten Buch „The Tragedy of great Power Politics“ in seiner geschlossenen Logik der Großmachtpolitik schließt, sind sie sogar gelegentlich unvermeidlich.

Aber ist der Schaden nicht größer als der Nutzen?

Und dann ist da noch die größte aller technologischen Bedrohungen. Martin Hellman, Kryptografie-Koryphäe, Miterfinder des Diffie-Hellman-Algorithmus, Turing-Preisträger und Vorkämpfer für den Weltfrieden meint: Wenn wir weiterhin Kriege führen, ist es nur eine Frage der Zeit, bis Atombomben explodieren.

Dabei hieß es doch immer, dass die "Mutually Assured Destruction" (MAD), also die gegenseitig gesicherte Vernichtung, bei der Supermächte ein ausreichendes Arsenal an Atomwaffen besitzen, um sich gegenseitig vollständig zu vernichten, ausreichend Abschreckungspotential bieten würde, und zu Stabilität zu führen. Tastsächlich hatte die nukleare Abschreckungstheorie während des Kalten Krieges zwischen den USA und der Sowjetunion, zu einer Art Gleichgewicht des Schreckens geführt. Ohne die MAD-Drohung jedoch wurden diesen Massenvernichtungswaffen hingegen bedenkenlos eingesetzt, wie die Atombombenabwürfe auf Hiroshima und Nagasaki im August 1945 beweisen, die zu einem unmittelbaren Verlust von etwa 200.000 Menschenleben führten.

MAD mag Atomkriege verhindert haben. Es wurden jedoch munter weiter Kriege geführt, halt unterhalb der Schwelle des Einsatzes von Nuklearwaffen. Allein die Vereinigten Staaten von Amerika haben angeblich seit ihrer Gründung am 4. Juli 1776 nur 13 Jahre ohne Krieg verbracht. Durch zwei große Ozeane geschützt und im Norden, wie im Süden von weit unterlegenen Staaten begrenzt, haben sie zum letzten Mal am 7. Dezember 1941 mit dem Angriff der japanischen Streitkräfte auf Pearl Harbor, Hawaii Krieg mit einem anderen Staat auf ihrem eigenen Staatsgebiet erlebt. Davor war es zum letzten Mal während des Kriegs von 1812 zwischen den USA und Großbritannien und seinen Kolonien.

Die Verlockung, Kriege zu führen ist offenbar dann groß, wenn das eigene Territorium davon nicht beeinträchtigt wird.  Es fällt schwer, so zynisch nüchtern zu argumentieren, aber überwiegt dann der Nutzen über den möglichen Schaden? Zumindest für die Waffenindustrie scheint das in dem oben angeführten Beispiel USA zuzutreffen. Rüstungskonzerne aus den USA haben den bei Weitem größten Weltmarktanteil. Vierzig Unternehmen aus den Vereinigten Staaten finden sich in der Sipri-Liste der weltgrößten Waffenhersteller. Zusammen erwirtschafteten sie 2021 fast 300 Milliarden US-Dollar, mithin etwa die Hälfte der weltweiten Umsätze im Waffengeschäft. Für einige Beteiligte lohnt es sich also.

Das gilt auch für Kriege, in deren Folge Gebiete annektiert werden, die strategischen Nutzen versprechen, sei es militärischer oder wirtschaftlicher Natur. Völkermord ist kein Ziel, zumindest kein erklärtes Ziel mehr, wohl aber ein tolerierter Kollateralschaden. Ethische Säuberungen als Ergebnis von Kriegen werden munter weiter betrieben. Ob es unser NATO-Partner Turkey in Syrien, oder dessen verbündetes Regime in Aserbaidschan mit den eroberten Armeniern betreibt, Tadel dafür muss nur befürchten, wer aus anderen Gründen in Ungnade fällt. Auch hier lohnen sich Kriege also noch, wenn sie sorgfältig dimensioniert, getarnt, gerechtfertigt und zum geeigneten Zeitpunkt durchgeführt werden.

Aber stimmt das auch noch für größere Konflikte, solche bei denen ein Angreifer mit weltweiten Beeinträchtigungen oder gar mit Schäden auf dem eigenen Territorium zu rechnen hat? Sind wir nicht inzwischen auf eine störanfällige globale Infrastruktur angewiesen, deren Ausfall dem zivilen, bürgerlichen Leben, wie wir es kennen ein Ende bereiten würde?

Im Februar 2024 gab es eine aufgeregte Diskussion über eine Anti-Satelliten-Weltraumwaffe, die Russland angeblich entwickelt, und die möglicherweise den erdnahen Orbit für alle zerstören könnte.

"Wenn es jemand wagt, eine Atomwaffe in der hohen Atmosphäre oder sogar im Weltraum zu zünden, wäre das mehr oder weniger das Ende der Nutzbarkeit dieser globalen Gemeinschaftsgüter", sagte dazu Michael Traut, der für das militärische Raumfahrtkommando Deutschlands zuständige Generalmajor, dazu laut Politico Europe. "Niemand würde eine solche Aktion überleben - kein Satellit, weder chinesisch noch russisch, weder amerikanisch noch europäisch." In einem solchen Fall würden Satelliten, die jetzt auf einer Umlaufbahn ihre Kreise um die Erde ziehen, zu Schrott werden. Es würden dichte Trümmerfelder entstehen. 

Jedoch hängt der bürgerliche Alltag der Bevölkerung auf der Erde mit Telefon, Computer, Navigation, Fernsehen, Energieversorgung und den davon abhängigen Diensten seinerseits von funktionierenden Satelliten ab. Satelliten zählen damit zur globalen, kritischen Infrastruktur. Sie sind aktuell ungeschützt, vielleicht auch gar nicht schützbar.

Aber wie sieht es mit der kritischen Infrastruktur auf der Erde aus, also mit den Einrichtungen, Systemen, Dienstleistungen und Netzwerken, die für das Funktionieren einer Gesellschaft von entscheidender Bedeutung – eben kritisch - sind. Typischerweise umfassen sie:

  1. Energieversorgung: Kraftwerke, Stromnetze, Öl- und Gasleitungen.

  2. Transportwesen: Flughäfen, Häfen, Eisenbahnen, Straßen und Brücken.

  3. Kommunikation: Telekommunikationsnetze, Internetinfrastruktur, Satellitenkommunikation.

  4. Wasserver- und Abwasserentsorgung: Wasseraufbereitungsanlagen, Kanalisationsnetze.

  5. Gesundheitswesen: Krankenhäuser, Notfalldienste, medizinische Versorgungseinrichtungen.

  6. Finanzwesen: Banken, Börsen, Zahlungsabwicklungsinfrastruktur.

  7. Regierungseinrichtungen: Regierungsbüros, Verteidigungsanlagen, Rechenzentren.

  8. Ernährung und Landwirtschaft: Lebensmittelproduktion, Lagerhäuser, Lebensmittelverteilung.

Kritisch ist offenbar fast die gesamte Infrastruktur. Ihr Ausfall oder eine Beeinträchtigung kann schwerwiegende Folgen haben.

Regierungen, Unternehmen und internationalen Organisationen sehen mithin offiziell Sicherung und der Schutz der kritischen Infrastruktur als vorrangig an, um das Wohlergehen einer Gesellschaft zu gewährleisten. Das gelingt schon in Friedenzeiten nur unzulänglich. Vor einer durchgehend hinlänglichen Resilienz, also Widerstandsfähigkeit gegenüber Bedrohungen sind wir weit entfernt. 

Dass die kritische Infrastruktur hochentwickelter Industrienationen in einem Kriegsszenarien auf eigenem Territorium noch wirksam zu schützen sein kann, ist schlicht nicht vorstellbar. Unsere global vernetzte Wirtschaft ist leicht verletzlich, unsere weltweiten Lieferketten sensibel und störanfällig, unsere weltweiten Kommunikationsstränge leicht zu unterbrechen.

Allein die Bedrohungen für die globalen Lieferketten, von denen wir so abhängig sind, sind bereits vielfältig. Sie reichen von Naturkatastrophen über politische Instabilität bis hin zu technischem Versagen und Pandemien. Einige der Hauptbedrohungen sind:

  1. Naturkatastrophen wie Erdbeben, Wirbelstürme, Überschwemmungen und Waldbrände können Transportwege blockieren, Infrastruktur beschädigen und den Handel beeinträchtigen. So haben Wirbelstürme wie Hurricane Katrina und Superstorm Sandy, Erdbeben wie das Tōhoku-Erdbeben in Japan und Waldbrände wie in Australien und Kalifornien Transportwege blockiert, Infrastruktur beschädigt und Produktionsanlagen zerstört.

  2. Pandemien, Gesundheitskrisen, Ausbrüche von Krankheiten können zu Unterbrechungen von Lieferketten führen, wie wir es mit der wie COVID-19 Pandemie vor Kurzem erst erlebt haben. Sie führte zu Produktionsausfällen, Werksschließungen, Transportunterbrechungen, Arbeitskräftemangel und einem enormen Anstieg der Nachfrage nach bestimmten Produkten wie medizinischer Ausrüstung und Haushaltswaren.

  3. Cyberangriffe, egal ob krimineller Natur oder als politisch motivierte Hackerangriffe auf Informationssysteme und Logistiknetzwerke können den Betrieb von Lieferketten stören, Datenlecks verursachen und die Sicherheit gefährden.

  4. Politische Instabilität, lokale Konflikte, Terrorismus, politische Unruhen und Handelsstreitigkeiten können zu Grenzschließungen, Sanktionen, Handelsembargos und anderen Einschränkungen führen. 

So führten die Handelsstreitigkeiten zwischen den USA und China sowie anderen Ländern zu Zollerhöhungen, Handelsembargos und Unsicherheiten, die den internationalen Handel beeinträchtigten.

Bei einem Anschlag auf die Deutsche Bahn waren zuletzt an drei Stellen im Hamburger Stadtgebiet Kabelschächte an Bahnstrecken in Brand gesetzt worden. Dazu tauchte dann auf einer linksradikalen Plattform ein Bekennerschreiben auf. Der Sabotageakt störte den ohnehin sehr fragilen Zugverkehr zwischen Berlin und Hamburg massiv.

Am 24. Februar 2024 wurden vor der Küste Jemens mindestens drei Unterseekabel gekappt, die für weltweite Internet- und Telefonverbindungen genutzt werden. Durchtrennt wurde etwa das Kabel Asia-Africa-Europe 1 (AAE1), das auch vom deutschen Internetknoten-Betreiber DE-CIX verwendet wird. Es wird vermutet, dass ein im Zuge kriegerischer Auseinandersetzungen von den lokalen Huthi-Rebellen versenktes Frachtschiff das Seekabel durchtrennt hat.

Konflikte stehen hier nur zufällig an letzter Stelle. Tatsächlich können sie die weitaus größten Auswirkungen haben. Bereits unterhalb der Schwelle eines großen Kriegs haben wir also massive wirtschaftliche und Verluste an Wohlstand und Lebensqualität, aber auch von Menschenleben hinzunehmen. Die Beeinträchtigungen in Konflikten, bei der eine Kriegspartei eine deutliche militärische Überlegenheit nutzen kann, begrenzt bleiben, den Besiegten oder am Konflikt Unbeteiligte treffen oder gar als Preis für den Sieg in Kauf genommen werden. 

Die Schwelle zu einem großen Krieg kann – ob mit Vorsatz oder aus einer unvorhergesehenen „Zwangslage“ heraus, auch leicht überschritten werden. Ein solcher Konflikt mit globalen Auswirkungen bahnt sich seit einem Vierteljahrhundert an; seit China und den USA mit dem Zusammenbruch der Sowjetunion der gemeinsame Gegner abhanden gekommen war und sich die USA eher von China in ihrer Rolle als Welt-Hegemon bedroht sehen. 

Dieser sich zunehmend weiter verschärfende Konflikt zwischen den beiden Ländern weist bereits jetzt viele Anzeichen eines Kalten Krieges auf. Die Parallelen zur Situation vor dem ersten Weltkrieg, als sich die damals unangefochtene Weltmacht England durch das aufsteigende, geeinte Deutschland bedroht fühlte, sind unübersehbar. Ebenso leicht wie damals und ohne weitere bewusste Entscheidungen kann der „kalte“ Krieg zu einem „heißen“ Krieg werden – eben dem 3. Weltkrieg. 

Auch wenn dieser aus Furcht vor der wechselseitigen totalen Auslöschung ausschließlich mit sogenannte „konventionellen“ Waffen ausgetragen werden sollte, müssen wir mit dem Zusammenbruch ganzer Wirtschaftsräume und der Zivilgesellschaft größerer geographischer Bereiche rechnen, verbunden mit einem sehr deutlichen Rückgang der Bevölkerungszahl. Niemand hat bisher erklärt, wie und für wen sich ein solcher Konflikt noch „lohnen“ könnte.

Die Grundannahme aber, dass es dank MAD bei „konventionellen“ Waffengängen bliebe, könnte sich ebensoleicht als irrig herausstellen. Bevor sich eine Atommacht geschlagen gibt, wird sie möglicherweise eben doch zum Äußersten greifen, nach dem Motto: „Wenn wir schon untergehen müssen, dann bitte mit einem großen Knall. Und dann nehmen wir so viele mit in unser Grab, wie wir können.“

Dazu passend wird Albert Einstein gern mit dem Ausspruch zitiert: "Ich weiß nicht, mit welchen Waffen der Dritte Weltkrieg ausgetragen wird, aber der Vierte Weltkrieg wird mit Stöcken und Steinen ausgetragen."

Können wir uns Kriege also wirklich noch leisten?


2024-02-05

Artificial Intelligence vs. Human Stupidity

 

Nouriel Robini aka. “Mr. Doom” did it again – and again. Asked for his takeaways from this year’s World Economic Forum meeting in Davos he claimed that the world is facing mounting threats and already existing problems, but still heading to the wrong direction.

We must bear in mind that our world is dominated far more by human stupidity than by AI. The proliferation of megathreats – each an element in the broader “polycrisis” – confirms that our politics are too dysfunctional, and our policies too misguided, to address even the most serious and obvious risks to our future. These include climate change, which will have huge economic costs; failed states, which will make waves of climate refugees even larger; and recurrent, virulent pandemics that could be even more economically damaging than COVID-19.

Making matters worse, dangerous geopolitical rivalries are evolving into new cold wars – such as between the United States and China – and into potentially explosive hot wars, like those in Ukraine and the Middle East. Around the world, rising income and wealth inequality, partly driven by hyper-globalization and labour-saving technologies, have triggered a backlash against liberal democracy, creating opportunities for populist, autocratic, and violent political movements.

Unsustainable levels of private and public debt threaten to precipitate debt and financial crises, and we may yet see a return of inflation and stagflationary negative aggregate supply shocks. The broader trend globally is toward protectionism, de-globalization, de-coupling, and de-dollarization.

The dominant topic at the WEF, as expected, was artificial intelligence and its potential for both positive and negative impacts. But rather than perceiving AI as a useful tool to help solving the long list above, it was itself added to the list, whereas the list itself seemed to be accepted as a unalterable fate. 

Can’t we make good use of Artificial Intelligence to counter Human Stupidity?

In the following her lists a few of the scientific and technological domain where AI could unfold its potentially beneficial influence. All agreeable, however farfetched a few of them may be. He e.g. expresses hope that such utopian sources of energy supply like nuclear fusion reactors could become more science than fiction. 

In this context we should remind ourselves that any such reactor be it conventional or futuristic will just produce heat at first. That heat might subsequently be transformed to other forms and shapes of energy, electric, chemical and the like. If it is just that, we should not forget that we are already residing on one big reactor. There is no need to create a new one. It is just a few kilometres away of each consumer. Only those few kilometres are measured vertically: It our good old earth, which’s thin crust we are dwelling on. 

We have to admit that taking our backward drilling technologies tapping from that vast potential is still rather costly – but by far cheaper than any nuclear technology. In addition, it would be in steady supply, relatively safe and rather local.

Maybe this is a topic where AI could enlighten us further, providing a counterweight to our human stupidity.

Closing a Blog Post dating back January 2020 I once stated:

One idea, which crossed my mind recently, has not yet been discussed widely. It might well be one of those ‘other factors we have not even thought of yet’ determining our future direction. Couldn’t it well be that a Super-AI, once created and enjoying an independent life, be the saviour, rather than the terminator of humanity? Saving Humanity from itself in the end?

Some specially gifted humans usually only at the end of their lives, while summing up their life long experiences are endowed, with some insight, which we call wisdom. So why should it be beyond imagination that an artificial super-intelligence, after it has left all competition behind and won all battles, after it is the only one left and unchallenged, reaches a certain wisdom of old age and, very much like the overlords in Arthur C. Clarkes Childhood's End, orders the world in such a way that it will be able to live permanently in peace and prosperity - humanity and AI?

Will this then result in AW (Artificial Wisdom)?

Nouriel in a similar manner concludes – with some caveat however:

"These and many other technologies could change the world for the better, but only if we can manage their negative side effects, and only if they are used to resolve all the megathreats we face. One hopes that artificial intelligence someday will overcome human stupidity. But it will never get the chance if we destroy ourselves first."

A further elaboration on this exotic thought is due, however deserves a publication on its own. So, I may take it a a self-imposed obligation.


2024-01-12

Review: Underground Empire: How America Weaponized the World Economy

Underground Empire: How America Weaponized the World Economy Underground Empire: How America Weaponized the World Economy by Henry Farrell
My rating: 5 of 5 stars

I consider “Underground Empire: How America Weaponized the World Economy” by Henry Farrel and Abraham Newman to be a must-read for every politically interested citizen. I highly recommend reading it. This insightful contribution places great emphasis on providing evidence for what was previously the realm of assumptions and suspicions.

Sometimes governments have taken and are taking strange turns and acceding to our big brother's demands when previously they had vehemently refused to do so. Why are some countries desperately trying to de-dollarize when this still seems to be a futile endeavor? Why is China straining its vast resources to build a parallel grassroots economy while we appear to be operating in a free trade world order?

After reading all the chapters of the groundbreaking analysis, many seemingly unrelated pieces fall into place, forming a great picture of how our world is ordered by mainly invisible forces. This image shows great power politics (also known as real politics or offensive real politics) at its best - the pure essence of it.

I can fully recommend this well-researched, logically structured and clearly written book with only minor reservations. My slight hesitation concerns the non-analytical part: the final chapter offers recommendations on how the United States should deal with the apparatus it has built to dominate and control the global economy.

The proposals essentially amount to maintaining the entire machinery of economic and therefore political power, but only using it for noble purposes, such as getting the world to take action to avert climate catastrophe.

However, it is clear that this will not happen. Saul will not turn into Paul based on a recommendation alone. It is unlikely that the global hegemon, intoxicated with power, would voluntarily decide to undergo detoxification. The policies of the great powers always followed the same patterns everywhere and over the centuries.

This small concession to the American public (after all, both authors understandably want to keep their jobs as university professors) is forgivable and in no way detracts from the immense value of this book.

View all my reviews

Review: Spin Dictators: The Changing Face of Tyranny in the 21st Century

Spin Dictators: The Changing Face of Tyranny in the 21st Century Spin Dictators: The Changing Face of Tyranny in the 21st Century by Sergei Guriev
My rating: 5 of 5 stars

Sergei Guriev’s “Spin Dictators” is an important and eye-opening contribution to the current political discourse. With great detail and a wealth of examples, he proves what previously seemed to me to be more of a plausible assumption, namely that dictators can also be elected "democratically", that in many cases no (brutal) violence is needed to officially rise up the popularity scale, eliminate one's rivals and still maintain good relations with real or supposedly liberal democracies.

Sergei Guriev has thus done a great service to political discourse. Nevertheless, he has not only answered questions in his work. He has also raised new questions, or at least awakened them in me: Aren't these tools used by spin dictators also used in democracies, so that a party-duopoly has no new intruders to fear? In this way, a few incumbent families that have ruled for generations can take turns in exercising power without being effectively disturbed in their game.

Is it not possible to create an inverse democracy in this way, which looks very much like a pure liberal democracy from the textbook, except that here it is not really the people who determine the government, but the alternating governments that form a suitable people. They would certainly have the tools to do so. So, do spin democracies also exist? Careful observation of the strange events on the other side of the Atlantic can certainly give rise to such suspicions.

View all my reviews

2023-11-29

The Risk of De-Risking


1. The evolution of De-Risking

Managing the risk of doing business

Risk management is an essential task for all companies. So it should be for national governments.

Since, as every entrepreneur knows, risks and opportunities go hand in hand, it is not a question of simply minimising risks. There is rarely a risk-free business.

Rather, it is a question of determining one's own risk appetite and then deciding which risks to take. This is a completely natural ongoing task.

The merchants of Hamburg, to whom I feel a certain kinship, have been daring seafarers over the last few centuries, some of whom have made fortunes by taking risks, not just by avoiding them.

So why have the highest European authorities suddenly decided to reduce risk? Is there perhaps more to it than meets the eye? Is there perhaps a powerful undercurrent guiding our path that we do not have the strength or even the will to oppose?

So, let's take a step back and answer the questions:

  • How did we get here?
  • What do we need to do now?
  • And how could this all develop further?

How De-risking Went Viral

If diplomats were on TikTok, “de-risk” would be trending. The word has suddenly become popular among officials trying to loosen China’s grip on global supply chains but not cut ties entirely, with the joint communiqué from this weekend’s Group of 7 (G7) meeting making clear that the world’s largest democratic economies will now focus on “de-risking, not decoupling.”

The former is meant to sound more moderate, more surgical. It reflects an evolution in the discussion over how to deal with a rising, assertive China. But the word also has a vexing history in financial policy — and since the debate over de-risking will continue, we all might as well get up to speed.

“De-risking” relations with China caught on after a speech by the European Commission president, Ursula von der Leyen on March 30, when she explained why she’d be traveling to Beijing with President Emmanuel Macron of France, and why Europe would not follow the calls for decoupling that began under President Trump.

I believe it is neither viable — nor in Europe’s interest — to decouple from China,” she said. “Our relations are not black or white — and our response cannot be either. This is why we need to focus on de-risk — not decouple.”

German and French diplomats later pressed for the term in international settings. Countries in Asia have also been telling American officials that decoupling would go too far in trying to unravel decades of successful economic integration.

In an interview, David Koh, Singapore’s cybersecurity commissioner, explained that the goal should be safety, with separation in some domains and cooperation in others.

I think we derive a huge amount of economic, social and safety value when systems are interoperable,” he said. “I want my plane to take off from Singapore and land safely in Beijing.”

What worries globalized economies, he added, is “bifurcation,” with Chinese markets and manufacturing on one side, and American-approved supply chains on the other.

These arguments appear to have worked in de-risking’s Favour. On April 27, the U.S. national security adviser, Jake Sullivan, used the word in a major policy speech.

We are for de-risking, not for decoupling,” he said. “De-risking fundamentally means having resilient, effective supply chains and ensuring we cannot be subjected to the coercion of any other country.”

On May 17, S. Jaishankar, the Indian foreign minister, added his voice, saying it was “important to de-risk the global economy and yet to ensure that there is very responsible growth.”

What does the concept of "de-risking" contain?

The concept of "de-risking" includes:

  • Diversification of supply chains:
    To avoid over-reliance on Chinese supplies, particularly highlighted by the disruptions caused by the COVID-19 pandemic.

  • Investment screening:
    The EU has been strengthening its mechanisms to screen foreign investments that could pose a risk to security or public order, including from China.

  • Promotion of European values:
    Asserting the importance of human rights, labour standards, and environmental sustainability in its relations with China.

  • Research and technological sovereignty:
    Encouraging the development of key technologies within the EU to reduce dependency on Chinese tech.

  • Regulatory frameworks:
    Strengthening data protection laws and other regulations to safeguard against potential economic coercion or espionage.

While the term "de-coupling" suggests a separation, "de-risking" suggests making the relationship more robust and less vulnerable to external pressures. It's a nuanced shift that allows the EU to continue engaging with China economically, while also protecting and promoting its own strategic interests. The content of EU policy has indeed evolved to address the complex relationship with China, moving from a purely opportunity-focused engagement to one that also accounts for strategic competition and systemic differences.

De-risking’s Sordid History

Before it entered diplo-speak, de-risking had a long life in the response to American government sanctions against terrorism and money laundering, where it’s associated with overreaching.

According to the Treasury Department, “de-risking refers to financial institutions terminating or restricting business relationships indiscriminately with broad categories of customers rather than analysing and managing the specific risks associated with those customers.”

In other words, de-risking — in its common usage, pre-April — carries negative connotations of unnecessary exclusion.

Human rights groups, for example, have condemned how banks de-risk by denying service to aid agencies that work in places like Syria, fearing fines if an organization strays into a grey zone of providing aid to nations under sanction.

A 2015 report from the Council of Europe offered an additional critique: “De-risking can introduce further risk and opacity into the global financial system, as the termination of account relationships has the potential to force entities and persons into less regulated or unregulated channels.

That means de-risking leads to enforcement challenges: Dubious and legitimate actors move into darker corners and innovate, making their actions harder to manage.

What the world thinks

Countries in Asia have been telling American officials that decoupling would go too far in trying to unravel decades of successful economic integration.

To the Chinese government, unsurprisingly, “de-risking” isn’t much of an improvement.

There is a sense that ‘de-risking’ might be ‘decoupling’ in disguise,” the state-run Global Times wrote in a recent editorial . It argued that Washington’s approach had not strayed from “its unhealthy obsession with maintaining its dominant position in the world.

Some commentators in the region are also de-risk sceptics. “A substantial change in policy? “asked, a columnist for The South China Morning Post. “I doubt it. It just sounds less belligerent; the underlying hostility remains.

To the Chinese government, unsurprisingly, “de-risking “isn’t much of an improvement.

So, …

De-risking requires tough, in-the-weeds decisions and solutions. Which semiconductors must be kept out of China’s hands? Do all medical devices need to be produced somewhere other than China? What could TikTok do to firewall the risks of being owned by a Chinese company?

De-risking may feel more diplomatic than decoupling. “Who doesn’t like reducing risk?” said Bates Gill, director of the Asia Society’s Centre for China Analysis. “It’s just rhetorically a much smarter way of thinking about what needs to be done.”

To make it work, the United States and its allies will need to do more thinking and regulation writing for some businesses, while allowing others to stay in China, which is navigating its own push.

In the sanction’s world, sifting risk from fair treatment and economic benefit is an imperfect, evolving challenge — so will it be with China.

2. History of the China − US - relationship

What are the different phases in the politics of the US towards China during the last 5 decades?

Which were the major events or acting players influencing the relationship between the 2 powers?

The geopolitical relationship between the United States and China has undergone several phases over the past 50 years, a pivotal period in Sino-American relations, shifting from rapprochement, via strategic cooperation to competition and rivalry. Here's an overview of the evolving dynamics:

1970s: Rapprochement

President Nixon’s visit to China in 1972 marked the beginning of rapprochement between the two nations after decades of estrangement during the Cold War. Influential Players during this period were President Richard Nixon and his Secretary of State, Henry Kissinger, on the U.S. side; Chairman Mao Zedong and Premier Zhou Enlai on the Chinese side. This led to the normalization of diplomatic relations and set the stage for increased economic and cultural exchanges.

1980s: Engagement and Cooperation

Following the normalization of diplomatic relations in 1979, the 1980s saw a period of increasing engagement and cooperation. China's reform and opening-up policies under Deng Xiaoping and the country's entry into the global economy were viewed positively by the U.S., which supported China's modernization as a counterbalance to Soviet influence guided by the principle “my enemy’s, enemy is my friend”. The U.S. granted Most Favoured Nation trade status to China, and bilateral trade began to grow.

1990s: Tension and Conditional Engagement

Still in 1989 The Tiananmen Square incident significantly strained relations, leading to U.S. sanctions and a global outcry over human rights. But driving geo-political forces dictated that despite tensions, the U.S. continued to engage with China, especially on economic fronts, with the claimed but unfounded belief that trade and investment would eventually lead to political liberalization– or the country’s economic ascent would stall and the country would fail. This firm assumption finally led to China's accession to the World Trade Organization (WTO) in 2001, with strong U.S. backing, believing it would integrate China into the “rules-based international order”.

2000s: Integration and Growing Rivalry

As China's economy grew rapidly, its global influence expanded. The U.S. began to see China as a potential competitor but continued to deepen economic ties. China's military modernization also started to concern U.S. policymakers. The Hainan Island incident in 2001 created military tensions; however, post-9/11, counter-terrorism efforts saw some cooperation.

2010s: Strategic Pivot and Competition

The Obama administration's "Pivot to Asia" was an effort to rebalance U.S. foreign policy towards the Asia-Pacific region, which was seen as a response to China's rising influence. China was increasingly perceived as challenging the US as a world hegemon. Tensions arose with Cybersecurity issues and the South China Sea territorial disputes becoming major points of contention. As a risk mitigating measure the establishment of the annual Strategic and Economic Dialogue can be seen.

Late 2010s to Early 2020s: Confrontation and Decoupling

Then came President Donald Trump. Under his watch the U.S. took a more confrontational stance, initiating a trade war, challenging China on multiple fronts including technology, trade practices, human rights, and regional security. The trade war initiated in 2018, was leading to tariffs on hundreds of billions of dollars' worth of goods. The U.S. targeting Chinese tech companies like Huawei, citing national security concerns. China responded with counter

2020s: Strategic Competition

The Biden administration has continued a tough stance on China, seeing the relationship as one of "strategic competition". The U.S. has sought to work with allies and dependent states to counterbalance China's growing influence and has emphasized the need for the US-rules-based international order. Thus, tensions in trade, technology are continuing. Human rights, particularly the situation in Xinjiang and Hong Kong, and military posturing in the Indo-Pacific region became hot topics again.

The geopolitical nature of most of these points of conflict can be aptly demonstrated by the example of the alleged human rights violations against the Central Asian Uyghur people in Xinjiang. According to reports, members of the Uyghur people have historically been among the toughest and most brutal fighters for the Islamic State, also known as ISIS or Daesh. However, this image in the western press has changed, with the same people being portrayed merely as victims of "cultural genocide" by the Chinese authorities through imprisonment and forced labour.

Hence, over the past five decades the relationship has been influenced by geo-political considerations, global events, domestic politics in both countries, and the personalities of the leaders. It is characterized by a complex interdependency, particularly in the economic realm, which both sides are navigating amid rising tensions, caused by an emerging great power competition.

Among those driving forces three dominating root causes can be identified, which will likely continue to have profound implications for the future trajectory of the relationship in terms of global politics and economics.

First however let’s have a short look at the situation which let to the surprising formation of that unlikely alliance

3. Geopolitical landscapes during the Cold War

During the first years of engagement by Henry Kissinger and Richard Nixon on the US side and Zhou Enlai and Chairman Mao Zedong on the side of China there was a certain geo-political constellation, which drew both sides together and encouraged them to cooperate.

The rapprochement between the United States and China in the early 1970s was a significant shift in the geopolitical landscape during the Cold War. This shift was driven by a complex interplay of strategic interests and realpolitik calculations on both sides.

Here are the key elements of the geopolitical constellation that facilitated this historic engagement:

Strategic Triangulation:

  • Soviet Threat:
    The growing rift between China and the Soviet Union, known as the Sino-Soviet split, had reached a point where border conflicts were occurring. Both the U.S. and China saw the Soviet Union as a significant threat—China on its northern border and the U.S. globally. By engaging with China, the U.S. aimed to exploit this rift and create a strategic triangle where it could play China against the Soviet Union, thus gaining leverage in its Cold War strategy.

Major Players:

  • United States:
    President Richard Nixon, who was known for his anti-communist stance, and his National Security Advisor Henry Kissinger, were the key architects of the U.S. policy of detente with China. They recognized the opportunity to reshape the balance of power against the Soviets.

  • China:
    Premier Zhou Enlai and Chairman Mao Zedong were the leading Chinese figures in this engagement. Mao's ideological rift with the Soviets and Zhou's diplomatic acumen were pivotal in opening China to the U.S.

Mutual Interests:

  • Containment of Soviet Expansion:
    Both countries were interested in containing Soviet geopolitical ambitions. For the U.S., having China as a counterweight in Asia could help check Soviet influence. For China, a détente with the U.S. could provide a security buffer against the threat from its erstwhile ally.

  • Economic and Technological Incentives:
    China was seeking modernization and economic development. The U.S. could provide access to technology, capital, and markets that China needed for its economic reforms.

Normalization as a Logical Consequence:

  • Realpolitik:
    The geopolitical landscape of the time was dominated by realpolitik—a system of politics based on practical rather than moral or ideological considerations. The mutual benefit of balancing against the Soviet Union made the rapprochement a logical step.

  • Global Recognition:
    For the U.S., recognizing the People's Republic of China (PRC) as the legitimate government of China (over the Republic of China in Taiwan) was an acknowledgment of the political reality that China could not be isolated indefinitely.

Driving Forces:

  • Vietnam War:
    The U.S. was embroiled in the Vietnam War and seeking a way to extricate itself. Improved relations with China could potentially facilitate this process and reduce the risk of further escalation in Southeast Asia.

  • Domestic Politics:
    For Nixon, the move was also politically astute; opening relations with China was an achievement that could bolster his foreign policy credentials.

Symbolic Gestures:

  • Ping-Pong Diplomacy:
    The exchange of table tennis players between the U.S. and China in 1971 was a symbolic gesture that helped thaw relations and paved the way for more formal diplomatic engagement.

  • Nixon's Visit:
    Nixon's visit to China in 1972 was a watershed moment in international diplomacy, signalling to the world that a new chapter in international relations had begun.

Although in principle being ideological antipodes, the geopolitical constellation of the time made the U.S.-China rapprochement a matter of strategic necessity and opportunity for both countries, altering the Cold War dynamics significantly. This initial engagement laid the groundwork for the eventual normalization of relations and China's opening up to the world. This bold strategic move represents a prime example of the dominance of realpolitik over value driven approaches, which nevertheless dominate the official narratives.

4. American dissonance between rhetoric and action

John Mearsheimer is a prominent realist scholar in the field of international relations, and his analysis is grounded in the realist theory of international politics, which emphasizes power and security competition among states. According to realist theory, the international system is anarchic, which means there is no overarching authority to regulate the actions of states. This condition leads states to seek power, either to defend themselves or to assert dominance.

Mearsheimer, in particular, subscribes to an offshoot of realism called "offensive realism," which suggests that great powers are inherently driven by an insatiable desire for more power, leading them to seek regional or even global hegemony.

He argues that U.S. foreign policy can often be understood through a dualistic lens where …

  1. the 'real' motivations—grounded in power politics and national interest—are sometimes masked by
  2. an 'ideological' layer aimed at garnering public and international support.

This perspective is rooted in the realist school of international relations, which sees the pursuit of power and security as the central drivers of state behaviour. There is some evidence supporting this view:

Historical Precedents

Throughout history, nations, including the U.S., have often used idealistic rhetoric to justify actions that are fundamentally about national interests. For example, the Monroe Doctrine was framed as a policy of resisting European colonialism in the Americas. But it also served the U.S.'s strategic interest in preventing other powers from gaining a foothold near its borders.

Vietnam and Cold War Interventions

The U.S. justified its involvement in Vietnam as a stand against communism in service of global democracy, but realists argue that it was fundamentally about containing Soviet and Chinese influence. Similarly, interventions in Latin America and other regions during the Cold War were often framed as supporting democracy, though they sometimes supported authoritarian regimes that were aligned with U.S. strategic interests.

Iraq War

The 2003 invasion of Iraq was justified on the grounds of promoting democracy and eliminating weapons of mass destruction, but critics argue that strategic considerations, such as controlling oil resources and maintaining regional hegemony, were the real motivations.

Balancing China

The pivot to Asia and the subsequent framing of competition with China are often couched in terms of values, such as promoting a "free and open Indo-Pacific," but from a realist perspective, these policies are about balancing the rise of a new great power.

Rhetoric vs. Action

There are often discrepancies between U.S. rhetoric on human rights and democracy and its foreign policy actions, where strategic interests have led to alliances with non-democratic states or inattention to human rights abuses when it suits national interests.

Public Opinion and Moral Framing

Studies in political communication suggest that moral framing is more effective in garnering public support for foreign policy. Thus, presenting policy in terms of values can be a way to align the public with the realpolitik moves of the state.

Mearsheimer’s realist interpretation provides one lens through which to view U.S. foreign policy. But although it delivers compelling explanations of several international activities in U.S. foreign politics, it is not universally accepted. Other scholars, particularly those from the liberal or constructivist schools of international relations, argue that ideals and values do play a genuine role in shaping foreign policy. Moreover, some policymakers and analysts contend that values and interests are not always mutually exclusive and can often reinforce one another.

While realist critiques like Mearsheimer’s may emphasize the dissonance between rhetoric and action, this doesn’t necessarily imply that the ideological layer is entirely cynical or without genuine belief. It's also plausible that many policymakers and diplomats are sincere in their desire to promote values like human rights and democracy, even as strategic interests also play a key role in decision-making processes. Nevertheless the intellectual framework of offensive realisms gives us a good guidance to decrypt the different stages, the Sino-US-relations were in, like outlined in the following chapter.

5. Root causes – 1st offensive realism

Some experts, of which not surprisingly the American scholar John Mearsheimer quoted before is a prominent representative of, don't buy the accusations, brought forward by the US Administration like Human rights violations, border disputes or general higher Chinese assertiveness. They but point to the underlying pattern of great power politics. According to these alleged underlying mechanisms a major conflict between China and the US would be unavoidable, just like the situation prior to WWI, when Germany was rising and Great Britain felt threatened.

Here are some points that align with Mearsheimer's worldview and the current Sino-American relationship:

Thucydides Trap

This is a term coined by American political scientist Graham Allison, referencing the Peloponnesian War between Athens and Sparta. It describes a situation where a rising power causes fear in an established power, leading to a possible escalation to war. The parallel here is the dynamic between a rising China and an established United States, with some analysts fearing inevitable conflict.

Historical Patterns

Mearsheimer and other realists often point to historical patterns to justify their views. The lead-up to WWI, with a rising Germany challenging Great Britain's dominance, is sometimes cited as an analogy to current US-China tensions. This historical parallel supports the argument that major powers inevitably clash as the balance of power shifts.

Military Build-Up

The expansion of China’s military capabilities, particularly in the South China Sea and the development of its blue-water navy, is seen by realists as evidence of its intentions to assert greater regional control and challenge U.S. military dominance.

Economic Power and Influence

China's Belt and Road Initiative and its increasing economic clout are perceived as tools for expanding its influence and reshaping the global order in its favour, which can be seen as a strategic move in great power competition.

Technological and Ideological Competition

The race for technological supremacy, especially in areas like 5G, AI, and cybersecurity, along with ideological competition between China's authoritarian model and the U.S. democratic model, are contemporary battlegrounds reminiscent of past great power rivalries.

Rival Alliances and Partnerships

The forming of rival economic and military alliances (e.g., AUKUS, Quad, Belt and Road Initiative) is reminiscent of the alliance systems that were a significant factor in the escalation of WWI.

Of course, history does not inevitably repeat itself, and there are many mechanisms and institutions in the modern era that can prevent conflict, such as nuclear deterrence, economic interdependence, and international organizations designed to facilitate cooperation and resolve disputes. Furthermore, many scholars and policymakers advocate for engagement, diplomacy, and confidence-building measures as ways to manage and mitigate great power tensions.

While Mearsheimer's perspective is one influential lens through which to view international relations, there are alternative theories, such as liberal internationalism or constructivism, that emphasize different aspects of the international system, such as institutions, democracy, and norms. As such, whether conflict between the US and China is inevitable is a subject of considerable debate, and there is evidence and argumentation on both sides of the issue.

6. Root causes – 2nd economic & political delusion

There are two very influential books that were once recommended by the last Governor of Hong Kong, Chris Patten (Christopher Francis Patten, Baron Patten of Barnes):

  1. "Mr. China" by Tim Clissold (Autor) and
  2. "The China Dream: The Quest for the Last Great Untapped Market on Earth" written by Joe Studwell.

Both books lay out in detail how many western multinationals, driven by a mix of optimism, misunderstanding, and sometimes hubris or even outspoken greed and unrealistic expectations, poured about 100 billion USD of Foreign Direct Investment (FDI) into China, only to see many of their pipe dreams not becoming reality. Deeply disappointed several of them retreated thereafter.

The narratives in these books highlight a common pattern where Western businesses and governments underestimated the complexities of the Chinese market and the political environment, leading to both business failures and unmet political expectations.

One of those unmet political expectations was, that an economically developing China would either turn into a western-style liberal democracy or simply fail to develop. However, China failed to fail, meaning China developed economically without turning in a western-style democracy.

There is evidence that these dual disappointments contributed to the current Sino-American estrangement.

Economic Disillusionment

The stories of lost investments and failed joint ventures detailed in books like "Mr. China" showcase the harsh realities that many Western companies faced when they entered the Chinese market with high hopes and little understanding of the local business culture, regulatory environment, and political context. As these companies retreated, it may have led to a sense of disillusionment and scepticism about the prospects of engaging with China economically.

Political Disappointment

Western policymakers and some parts of the business community hoped that economic liberalization would inevitably lead to political liberalization in China. As China's economy grew, however, the Chinese Communist Party (CCP) maintained and even tightened its grip on power. The fact that China "failed to fail" in this regard has certainly caused frustration and a re-evaluation of strategies among Western democracies, contributing to a more confrontational stance in recent years.

Intellectual Property and Trade Practices

Western businesses often complain of unfair trade practices, forced technology transfers, and inadequate protection of intellectual property rights in China. These grievances have fuelled trade tensions and have been a significant factor in the rethinking of the Sino-American economic relationship.

Strategic Rethink

The economic development of China without the anticipated political liberalization has led Western countries, particularly the United States, to reconsider their approach toward China. The view of China as a "strategic competitor" rather than a "strategic partner" in official U.S. policy documents reflects this shift.

Human Rights and Ideological Divergence

Human rights issues, such as the treatment of ethnic minorities in China, have further driven a wedge between Western expectations and Chinese actions, exacerbating tensions.

Global Ambitions

As China has grown stronger, it has become more assertive in its foreign policy and global ambitions, leading to strategic competition in various domains, from the South China Sea to global institutions, which is a source of concern for the U.S. and its allies.

Shift in the Balance of Power

As China has risen economically and militarily, there has been a corresponding shift in the global balance of power. The United States, in response to what it sees as China's challenge to the existing international order, has adjusted its foreign policy accordingly.

In essence, the disillusionment stemming from unmet economic expectations and the dashed hopes of China’s political liberalization have played a decisive role in the evolving Sino-American relationship. These elements, combined with the geopolitical shifts and the broader strategic recalculations, have contributed to the current state of estrangement.

The narrative that China has not followed the path that many in the West anticipated has prompted a reassessment of how China is viewed and engaged with on the world stage.

7. Root causes − 3rd geo-political shifts

The current geopolitical situation meanwhile is a far cry from the era of U.S.-China rapprochement that marked the Nixon era. Many things have changed politically: the Soviet Union has collapsed, there was a unipolar moment, China grew economically and politically and is meanwhile rather seen as a strategic competitor, if not worse.

On October 7thas 2023 even a law was issued by the US administration which could well be understood as a declaration of (economic) war on China.

Let's look at how things have evolved:

Post-Cold War and Unipolar Moment:

  • After the collapse of the Soviet Union, the United States emerged as the sole superpower, leading to what political scientist Charles Krauthammer termed the "unipolar moment." The U.S. enjoyed unmatched global influence politically, economically, and militarily.

China's Economic and Political Ascendancy:

  • China capitalized on the post-Mao economic reforms initiated by Deng Xiaoping, leading to unprecedented economic growth. The country became the "world's factory," an economic powerhouse, and a significant player on the global stage.

  • Politically, China's governance model remained authoritarian, with the Communist Party of China (CPC) maintaining tight control over the state and society.

Strategic Competition:

  • As China grew, so did its ambitions. The "peaceful rise" narrative gave way to more assertive policies, particularly in the South China Sea, along with initiatives like the Belt and Road Initiative (BRI) that expanded China's global influence.

  • The United States began to see China not just as a strategic competitor but also as a potential threat to its interests and values, leading to a bipartisan consensus on taking a harder stance against China.

Technological Rivalry:

  • The competition extended to technology, with both countries vying for leadership in areas like artificial intelligence, quantum computing, and 5G telecommunications.

  • Concerns over intellectual property theft, cybersecurity, and the role of Chinese tech companies like Huawei and Tencent in global markets became points of contention.

Economic Decoupling:

  • The concept of economic "decoupling" gained traction in Washington, with calls to reduce dependence on China for critical supply chains and to restrict Chinese access to American technology and investment.

  • The October 7th, 2023 law could be seen as an extension of this policy, likely imposing stringent controls on trade, investment, and technological exchanges with China.

Current Situation and Possible Future:

  • The current situation is marked by heightened tensions and the potential for conflict, not just in trade but also in areas like Taiwan, where U.S. commitments to the island's defence clash with China's territorial claims.

  • Militarization and regional alliances are being strengthened, as seen with the Quad (U.S., India, Japan, Australia) and AUKUS (Australia, U.K., U.S.) pacts, which are seen as counters to Chinese influence.

  • The risk is that economic, political, and military tensions could escalate into a new Cold War or even direct conflict, although both nations have significant incentives to avoid military confrontation.

  • Cybersecurity and space are new domains of potential conflict that were not present during the Cold War.

In Conclusion:

  • The trajectory of U.S.-China relations will be shaped by the actions and policies of both nations. While competition is likely to remain intense, there are also global challenges like climate change and pandemics that require cooperation.

  • The situation is dynamic, with the potential for both positive and negative developments. Diplomacy, strategic patience, and multilateral engagement will be crucial to managing this complex relationship and avoiding a descent into confrontation.

8. A situation similar to the “Great Game”?

The history-conscious among us may be reminded of the geopolitical struggle between the two world powers of the time, Russia and Great Britain, known as "The Great Game". The term "Great Game" originally referred to the strategic rivalry and conflict between the British Empire and the Russian Empire for supremacy in Central Asia in the 19thcentury. It's now sometimes invoked as a metaphor for the current strategic rivalry between the United States and China, particularly as it plays out in Asia but also globally.

Evidence Supporting the Sino-American Tensions as a 'Great Game':

  • Geopolitical Rivalry:
    Similar to the British and Russian Empires, the US and China are engaged in a broad geopolitical contest spanning various domains, including military, economic, technological, and ideological spheres.

  • Sphere of Influence:
    Both the US and China are seeking to expand their influence in Asia through various means, including diplomatic ties, military alliances, economic investments, and soft power.

  • Proxy Influence:
    Just as the Great Game involved indirect control and influence over third countries, the US and China are vying for relationships and alliances with other nations in Asia and beyond, which could be seen as modern-day proxies.

  • Infrastructure and Investment:
    China's Belt and Road Initiative (BRI) has been compared to the historical efforts to establish trade routes and spheres of influence in Central Asia, evoking similarities with the Great Game's focus on trade and strategic geography.

Aspects Where the Comparison Falls Short:

  • Globalization:
    Unlike the 19th-century empires, both the US and China are deeply integrated into a globalized economy, making outright conflict more costly and less likely, at least in theory.

  • Nuclear Deterrence:
    The presence of nuclear weapons and the doctrine of mutually assured destruction introduce a level of deterrence that did not exist during the time of the Great Game.

  • Multilateralism:
    International institutions and multilateral agreements now play a significant role in mediating conflicts, unlike the bilateral nature of the Great Game.

  • Internal Politics:
    The internal political situations in both the US and China are more complex and subject to public opinion and economic considerations than were the autocratic systems of the British and Russian Empires.

  • Technological Interdependence:
    The interwoven nature of technology and supply chains, especially in areas like semiconductors, makes the rivalry more complex than the relatively straightforward competition for territory of the Great Game.

  • Awareness of Global Challenges:
    There is an understanding that transnational challenges such as climate change and pandemics require a certain degree of cooperation between the US and China, something that was not a consideration in the 19th century.

Although the Great Game metaphor may provide a useful lens through which to view the strategic rivalry between the US and China, it is nevertheless an imperfect analogy. The global context and the nature of power in the 21stcentury is each vastly different compared to the 19thcentury. The interconnectedness of modern global politics, economics, and environmental issues means that while competition is fierce, there is also a necessity for collaboration that did not exist in the era of the Great Game.

9. Today's politics of the US towards China and vice versa

The politics of the United States toward China, and China's politics toward the United States, can be characterized as a multifaceted strategic competition, which encompasses economic, technological, military, and ideological dimensions:

United States' Politics Toward China:

  • Strategic Competition:
    The Biden administration officially labelled China as "the most serious competitor" to the United States, indicating a strategic approach to outcompete China across various domains while avoiding direct confrontation.

  • Collaboration and Pushback:
    While competitive in nature, the U.S. has also expressed willingness to collaborate with China on global issues like climate change and pandemic response, where mutual interests align.

  • Alliance Building:
    The U.S. is actively strengthening alliances, particularly with Indo-Pacific nations, NATO, and other global partners, to create a united front on issues concerning China, such as 5G technology and supply chain security.

  • Human Rights and Democracy Advocacy:
    The U.S. has been vocal about human rights concerns in China, particularly regarding Xinjiang and Hong Kong, and has taken measures to demonstrate support for democratic values.

  • Technology and Trade:
    Continuing concerns about trade practices, intellectual property, and technological advancements have led the U.S. to take steps to protect its own technological edge, including restrictions on Chinese tech companies and investments.

  • Military Posture:
    The U.S. military is focusing on readiness and capability development in the Indo-Pacific region to ensure it can counterbalance the People's Liberation Army's growing capabilities.

China's Politics Toward the United States:

  • Assertive Diplomacy:
    China has become more assertive in its foreign policy, including toward the U.S., advocating for a "new type of international relations" and promoting its governance model as an alternative to Western democracy.

  • Economic Coercion and Influence:
    China utilizes its economic leverage to push back against U.S. influence, implementing counter-tariffs and seeking to reduce dependency on U.S. markets by diversifying trade partners and supply chains.

  • Technological Self-Reliance:
    In response to U.S. restrictions, China has emphasized the need to achieve self-reliance in critical technologies, investing heavily in sectors like semiconductors and artificial intelligence.

  • Military Modernization:
    China continues to modernize its military capabilities, with a focus on areas like anti-access/area denial (A2/AD) strategies, which could counter U.S. military advantages in the event of a regional conflict.

  • Ideological Campaign:
    China is countering Western narratives and criticism by promoting its development model, human rights concept, and handling of events in Hong Kong and Xinjiang, through what it calls a "correct" narrative.

  • Engagement with U.S. Rivals:
    China is engaging with U.S. rivals such as Russia and Iran, building relationships that may serve to balance against U.S. power.

Both countries, while managing their rivalry, until now are still aware of the high stakes involved, especially given the interconnected nature of the global economy and the potential for conflict escalation. As a result, an element of restraint in their bilateral relations can be observed, with both sides avoiding steps that could lead to an uncontrollable spiral into direct conflict. This delicate balance however cannot be taken for granted

10. The role of de-Dollarization

In the 1960s Valéry Giscard d'Estaing, then the French Minister of Finance, coined the term exorbitant privilege (privilège exorbitant in French) referring to the benefits the United States has due to its own currency (the US dollar) being the international reserve currency. For example, the US would not face a balance of payments crisis, because their imports are purchased in their own currency.

In the wake of the latest global financial crisis, a prominent counter position was voiced, decrying the US Dollar as exorbitant burden for the US.

It nevertheless, these internal arguments notwithstanding, the US Dollar is unrivalled as a reserve currency with no challenger in sight. It only took the massive weaponisation of the US Dollar to lift the concept of de-dollarization on the international agenda. The term refers to the process of reducing reliance on the United States dollar in international transactions and reserves. It is a trend that has gained attention in the context of the U.S.-China rivalry, as well as in the broader geopolitical landscape.

Role in U.S.-China Rivalry:

  • De-dollarization can be seen as a strategic move by China and other nations to diminish the U.S. influence that comes with the dollar's role as the world's primary reserve currency.

  • By promoting the use of their own currencies in trade and investment, countries like China seek to increase their financial autonomy and protect themselves against U.S. sanctions or financial pressures.

  • For China, advancing the international use of the renminbi (RMB) is also a part of its broader ambition to reflect its economic might in the global financial system.

Triggering Events:

  • The use of economic sanctions by the U.S. has been a key factor that has prompted some countries to consider de-dollarization. Nations targeted by sanctions seek ways to circumvent the U.S. financial system.

  • The global financial crisis of 2008 also played a role, as it exposed the vulnerabilities of a dollar-dominated global financial system.

  • The ongoing trade tensions between the U.S. and China, along with tariffs and other restrictive measures, have further motivated the push for de-dollarization.

Major Proponents:

  • China:
    As the second-largest economy in the world, China has been a leading voice in de-dollarization, promoting the use of the RMB in international transactions and as part of central bank reserves.

  • Russia:
    Economic sanctions have pushed Russia to reduce its dollar holdings and engage in de-dollarization efforts, including promoting the use of the rouble and other currencies in trade with its partners.

  • Other BRICS nations (Brazil, India, South Africa):
    These countries have also shown interest in reducing dependency on the dollar, exploring alternative payment systems and reserve currencies.

Current Status:

  • While there has been progress in de-dollarization efforts, the U.S. dollar remains dominant in international trade and finance. This is due to its stability, liquidity, and the United States' role in the global economy.

  • China has made strides in internationalizing the RMB, including the establishment of RMB clearing banks around the world and the inclusion of the RMB in the IMF's Special Drawing Rights (SDR) basket.

Future Outlook:

  • De-dollarization is likely to continue gradually, as countries seek to diversify their foreign exchange reserves and reduce exposure to potential U.S. sanctions.

  • The rise of digital currencies and blockchain technology may further facilitate de-dollarization by providing alternative means of international transaction.

  • Nonetheless, the process is expected to be slow, given the entrenched position of the dollar and the lack of a ready substitute that can match its liquidity and acceptance.

  • The rivalry between the U.S. and China may accelerate this process, particularly if relations deteriorate and lead to more aggressive financial decoupling.

As the international financial system is firmly based on the use of the US dollar, the success of de-dollarization efforts will be limited in short and medium terms. It will depend on numerous factors, including the stability and openness of the economies promoting alternative currencies, the evolution of the international trade and financial systems, and geopolitical shifts. It's an ongoing trend with the potential to reshape international financial relations significantly over the coming decades.

In short term even China will not be able to escape the US dollar as the dominant exchange currency. The country hence for quite a while will have to accept the dangers associated with the potential use of the global reserve currency as a weapon in the international great power competition.

11. The EU’s policy towards China

The European Union's policy towards China is multifaceted, reflecting the complexity of its member states' interests and China's rising global influence. The EU has traditionally aimed for a balanced approach, seeking to engage China as a partner in trade and global governance while also addressing challenges in areas such as human rights, security, and reciprocity in economic relations.

Main Characteristics of EU Policy towards China:

  • Comprehensive Strategic Partnership:
    The EU has long sought to engage China through what it terms a "Comprehensive Strategic Partnership." This approach aims to deepen cooperation across a range of sectors, including climate change, economic and trade matters, technological research, and global security issues.

  • Trade and Investment:
    The EU is China's largest trading partner, and China is the EU's second-largest. The economic relationship is a significant focus, with the EU pushing for a more balanced and reciprocal trade relationship, as well as addressing concerns over market access and intellectual property rights.

  • Human Rights and Rule of Law:
    The EU often emphasizes human rights, calling for respect for fundamental freedoms and the rule of law in China, including in its dealings with Hong Kong and Xinjiang.

  • Security Concerns:
    The EU is increasingly attentive to the security implications of China's rise, particularly regarding cybersecurity, 5G networks, and China's military activities, especially in the South China Sea.

  • Multilateralism:
    The EU promotes a multilateral approach to global challenges, encouraging China to participate constructively in international institutions and to adhere to international norms.

Differences from the US Approach:

  • Confrontation vs. Cooperation:
    The US has taken a more confrontational approach towards China, especially regarding trade, technology, and security. The EU, while sharing some of these concerns, typically emphasizes engagement and dialogue over confrontation.

  • Security Alliances:
    The US has security alliances in the Asia-Pacific region and often views China's actions through a security lens. The EU, lacking similar alliances and with a smaller military footprint in the region, tends to prioritize economic and diplomatic tools.

  • Human Rights Stance:
    While both the US and EU are critical of China's human rights record, the EU's critique is often coupled with an emphasis on dialogue and mutual understanding, as opposed to the US's more direct sanctions-based approach.

Commonalities with the US Approach:

  • Trade Practices:
    Both the EU and the US have criticized China's trade practices, particularly state subsidies for Chinese companies, intellectual property theft, and lack of market access for foreign firms.

  • Technological Rivalry:
    There is a growing concern in both the EU and the US about technological dependencies on China and the need for securing supply chains in critical technologies like 5G, artificial intelligence, and semiconductors.

  • Global Governance:
    Both seek to shape the rules of global governance in ways that reflect liberal democratic values, and they encourage China to adhere to these norms.

Evolution of the Policy:

  • The EU's policy has evolved from one of broad engagement to a more nuanced stance that recognizes China simultaneously as a cooperation partner, a negotiating partner, an economic competitor, and a systemic rival.

  • Pressed hard by the US to maintain a tougher stance towards China, the EU in 2019 labelled China as a "systemic rival" for the first time, signalling a shift towards a more assertive stance on issues like security, technology, and values.

  • The EU is also working on its strategic autonomy to reduce dependencies on China, seeking to diversify partnerships in the Indo-Pacific region.

  • Recently in 2023-07-14 the Government of the Federal Republic of Germany released Strategy on China as part of the joint EU policy on China. This policy declares to be embedded in the aims and principles of the EU’s common policy on China and based on constant close coordination with EU partners. The strategy paper contains a collection of well-known and often publicly stated claims, complaints, wishes, accusations but few principles, goals, success factors, measures. It therefore hardly qualifies for a strategy.

The EU's policy towards China to a certain degree continues to develop in response to internal dynamics within the EU itself, changing global conditions, the actions of China but predominantly to the increasing pressure from the US. The EU aims to defend its interests and promote its values, while also looking for areas where cooperation with China is possible and beneficial for addressing global challenges like climate change, which given the weak geo-political position of the EU appears to be a futile endeavour.

12. Practical implications of Europe’s and the US’s China strategy

The policies and strategies of the EU towards China, very much like those of the US, are more than just rhetorical. They have practical implications and are being implemented with tangible and at time harsh effects on business operations. How they manifest on the ground will be felt only during the next years in an overwhelmingly adverse way.

European Union (EU)

  • Investment Screening:
    The EU has established a framework to screen foreign direct investments, which became fully operational in October 2020. This is aimed at protecting critical European assets and technology from potentially hostile foreign takeover or influence.

  • 5G Network Security:
    Many EU countries are tightening restrictions on the participation of Chinese companies like Huawei in their 5G networks, citing security concerns.

  • Research and Innovation Protections:
    The EU has introduced measures to protect its technological and intellectual property, including more stringent conditions for participation in research programs like Horizon Europe, especially for entities from non-EU countries.

  • Trade Defence Instruments:
    The EU has been more willing to use anti-dumping measures and other trade defence instruments against unfair trade practices, some of which affect Chinese companies.

  • Supply Chain Diversification:
    The COVID-19 pandemic has accelerated European efforts to diversify supply chains away from over-reliance on China, leading to initiatives to bring some production closer to home or to alternative locations.

United States (US)

  • Trade Tariffs:
    The US has imposed tariffs on billions of dollars' worth of Chinese goods, which has had a direct effect on trade flows and business decisions regarding sourcing and manufacturing locations.

  • Entity List:
    The US Department of Commerce has placed several Chinese companies on the Entity List, which limits their ability to buy US technology and components without government approval.

  • Investment Restrictions:
    US legislation and executive orders have been put in place that restricts American investment in Chinese companies with military ties or those operating in sectors deemed critical to US security.

  • Export Controls:
    The US has tightened export controls on certain technologies, especially those that can be used in military applications or in the surveillance of minorities within China.

  • Clean Network Initiative:
    This initiative aims to safeguard America's assets, including data and telecommunications, from "aggressors" like the Chinese Communist Party, influencing businesses in how they structure their IT and communication networks.

Implementation and Impact

The implementation of these measures requires companies to find their way in a more complex legal environment. For example, companies with international supply chains must now consider the impact of investment reviews and trade tariffs on their business activities. In practice, this affects decisions about where they manufacture products, how they protect their intellectual property and who they want to do business with.

Both the US and EU have shown a commitment to implementing these strategies, reflecting a shift towards a more belligerent and confrontational approach to economic relations with China. However, this currently does not mean a complete decoupling or disengagement.

Rather, it is a recalibration of relations with China with the aim of maintaining US international leadership under the guise of protecting national and economic security interests, while pursuing trade and co-operation where this is still possible.

13. Chinas response

China on the other hand has responded to the measures taken by the US and the EU with a combination of retaliatory actions, strategic adjustments, and domestic policy reforms:

Retaliatory Tariffs and Sanctions

In response to US tariffs, China imposed its own set of retaliatory tariffs on a range of American products. Beijing has also sanctioned entities and individuals in the EU and US that it perceives as interfering in its internal affairs, particularly those criticizing its actions in regions such as Xinjiang and Hong Kong.

Legal Countermeasures

China passed laws such as the "Anti-Foreign Sanctions Law," which provides a legal basis for counteracting sanctions. It allows China to take legal actions against individuals or entities involved in designing or implementing discriminatory measures against Chinese citizens or entities.

Diversification of Trade

China is actively seeking to reduce its dependence on the US and EU markets by diversifying its trade partnerships. This includes the Belt and Road Initiative to increase infrastructure and trade links primarily with Asia, Africa, and Europe, and the Regional Comprehensive Economic Partnership (RCEP) to deepen economic ties in the Asia-Pacific and BRICS.

Attracting Foreign Investment

China continues to open up sectors of its economy to foreign investment, seeking to counterbalance any divestment resulting from Western policies. It has also passed a new Foreign Investment Law aimed at improving the business environment for foreign investors and addressing concerns such as forced technology transfer.

Strengthening Domestic Market

The "dual circulation" strategy has been introduced to bolster domestic consumption and innovation, making the Chinese economy less vulnerable to external pressures and fluctuations in international trade.

Technological Self-Sufficiency

In response to technology restrictions, China is investing heavily in developing its own technological capabilities, particularly in semiconductors and telecommunications, to achieve self-reliance in critical technologies.

International Alliances

China has been actively working to strengthen ties with countries in other regions, such as engaging more with ASEAN countries, deepening ties with Russia, and building relations in Africa and Latin America, partly to counterbalance the influence of the US and EU.

Public Diplomacy and Influence Campaigns

China conducts public diplomacy efforts to improve its global image and to promote its political and economic model. This includes a significant presence in international media and on global platforms to present its narrative.

Cybersecurity and Information Control

In response to concerns about data and cybersecurity, China has tightened its own data protection regulations and is promoting its vision of "cyber sovereignty," which calls for greater state control over the internet and data flows within its borders.

China's responses reflect a strategy that is both reactive and proactive. While pushing back against the policies of the US and the EU, China is also taking steps to reduce its vulnerabilities and to reshape the global economic and political order in a way that is more favourable to its interests. This includes both strengthening its domestic economy and increasing its influence on the international stage through new partnerships and enhanced diplomatic engagement.

14. Germany’s pronounced vulnerability

Germany in particular does have certain vulnerabilities due to its position within these rising tensions. As the largest economy in the European Union and one that is highly dependent on exports, including a significant trade volume with both China and the United States, Germany could be significantly affected by geopolitical tensions.

Some industry sectors might be most affected:

Automotive Industry

The automotive sector is a cornerstone of the German economy, with China being a major market for German car manufacturers. Tariffs or trade barriers could impact exports significantly. Additionally, the push for electric vehicles (EVs) and China's strong position in the EV market and supply chain for batteries could also present challenges.

Machinery and Plant Engineering

Germany's machinery and plant engineering sector is another key area of its export economy, with many German companies having significant business interests in China. Disruptions in trade could affect this sector directly.

Chemicals and Pharmaceuticals

The chemicals and pharmaceuticals industries are also key sectors that could be impacted by tensions, particularly if supply chains are disrupted. China is an important supplier of raw materials and also a growing market for German pharmaceutical products.

Technology and Telecommunications

With the global race for technological dominance, especially around 5G technology where Chinese companies like Huawei are key players, German tech companies might find themselves in a difficult position if forced to choose between US and Chinese technologies and standards.

Energy Sector

The energy sector, especially with Germany's phase-out of nuclear and coal energy, could be impacted by tensions, particularly if trade disputes affect the availability or cost of imported energy commodities or technologies.

In terms of vulnerability Germany's strong institutional framework, diversified global trade relationships, and high levels of innovation provide some level of resilience. However, industries that are highly integrated with global supply chains or dependent on foreign markets for sales or raw materials could experience significant stress due to geopolitical tensions.

Additionally, the German government is aware of these vulnerabilities and may seek to implement policies aimed at diversifying trade, strengthening domestic industries, and developing alternative markets to mitigate these risks. The outcome will also be shaped by how the EU, as a whole, navigates these tensions and what common strategies it develops. The results so far however are less than encouraging with Germany being squeezed between the two superpowers becoming the biggest looser of the struggle of others.

15. Benefits of staying in China

Despite rising geopolitical tensions, there are several compelling reasons why companies might choose to remain engaged with the Chinese market:

Market Size and Growth Potential

China's population is over 1.4 billion people, making it the world’s most populous country with a rapidly growing middle class. This presents a significant consumer market for a wide range of products and services. For many businesses, the sheer volume of potential sales and the growth potential are too large to ignore.

Diversification

Operating in the Chinese market can allow companies to diversify their revenue streams. Relying on a single market or a handful of markets for revenue can be risky, especially if those markets face economic downturns. China can offer a hedge against economic cycles in other parts of the world.

Supply Chain Integration

China is deeply integrated into the global supply chain. It is not just a market for finished goods but also a key supplier of raw materials, components, and finished products. Companies often find cost advantages in manufacturing or sourcing from China due to its developed supply chains and economies of scale.

Competitive Presence

Being active in the Chinese market can prevent competitors from taking over the market share. By maintaining a presence, companies can protect their brand recognition and market position, which could be more difficult to regain if they leave and decide to return later.

A German business representative recently described China as the "fitness centre" for German companies. This means that those who can survive in these challenging conditions and fierce competition will succeed anywhere else.

Innovation and Technology

China has become a hub for innovation in areas such as digital payments, e-commerce, telecommunications, and artificial intelligence. Companies operating in China can gain insights into cutting-edge technology and business models, which they can potentially leverage globally.

Strategic Partnerships

Engagement with Chinese businesses can lead to strategic partnerships that are beneficial beyond the Chinese market. These partnerships can enable access to new technologies, investment opportunities, and other markets in Asia through regional trade agreements where China plays a significant role.

Responsiveness to Policy Changes

Companies with a presence in China may be better positioned to quickly adapt to policy changes and navigate the regulatory environment. They can build relationships with Chinese stakeholders and local governments, which can be beneficial for long-term operations.

Cultural and Brand Influence

A strong presence in China can contribute to a global brand's cultural influence. The perception and popularity of a brand in China can have positive effects on its perception in other markets due to the global visibility of Chinese consumers and tourists.

Despite these benefits, companies must balance the advantages with the risks associated with geopolitical uncertainties, intellectual property concerns, and potential ethical considerations. The decision to stay in the Chinese market must be made with a comprehensive understanding of both the market potential and the external risks.

Several Western multinationals have already given up and withdrawn from the Chinese market. Although their failure could be attributed to rising tensions, in many cases a lack of competitiveness is likely to be the real reason. Other large corporations may choose to split into separate entities if they are otherwise at risk of being torn apart by overwhelming geopolitical forces.

16. Conclusion

We Europeans must recognise that our geopolitical position is determined and dominated by the US. Although the growing economic competition from a rapidly developing China is real and increasingly felt by Europe and Germany in particular, the measures taken by the EU reflect US geopolitical rivalry with China and not genuine European needs. Europe is thus basically being assigned the role of a follower of the US at best. The "global South" and other countries, with the exception of Russia, are mere spectators.

US politicians continue to be intransigent with regard to China. Nikki Haley, the former governor of South Carolina and Republican presidential candidate in 2024, announced in September 2023 that she considered China "an enemy".

While the official US tone towards China has been gradually softening recently, measures to vigorously contain China are continuing and even intensifying. In a New York Times Magazine article from12 July 2023 entitled ...

’An Act of War’: Inside America’s Silicon Blockade Against China,” Alex W Palmer declared: “If the controls are successful, they could handicap China for a generation; if they fail, they may backfire spectacularly, hastening the very future the United States is trying desperately to avoid.”

American Enterprises maintain a more pragmatic approach. They have multiple incentives for staying in China. But in the end, few options for evasion remain and business eventually has to follow politics. For Europe, and Germany in particular, the European de-risking approach harbours its own risks.

As far as the Chinese economy is concerned, it will suffer considerably from the various sanctions, at least in the short and medium term. In addition, the long-term, downright turbulent growth to date is being bought with all kinds of market distortions and bad investments. Even if major geopolitical upheavals are ruled out, China's economy can be expected to remain in the doldrums for another ten to twenty years.

Since, according to the theories of great power politics, both countries are stuck in a geopolitical trap from which there is no easy escape, a major confrontation cannot be ruled out. There is no sign of the tensions easing. All measures short of war are conceivable. Minor miscalculations could well lead to a catastrophic conflict.

None of the pressing problems facing humanity, such as climate change, the sixth extinction of species, dwindling resources, ominously growing inequality or the growing threat of local and not-so-local conflicts, can be solved in this situation.

At the moment, we cannot be sure which country to place more hope in, China or the USA, if either of the two candidates.

However, a truly united Europe, pursuing its own interests without losing sight of the pressing challenges facing humanity as a whole, could play a mediating role.

Will Europe wake up one day and finally find its own way?