Well, haven’t Germany’s leading tabloid newspaper, Bild, and China ever gotten themselves into a spat!

On 15 April 2020, Bild published an article suggesting that China pay Germany 149 billion euros in damages for its role in starting the global coronavirus pandemic.

Later that same day, Tao Lili, responding for the Chinese Embassy in Berlin, refuted the claim that Beijing had lacked transparency in dealing with the crisis, while further stating that this was not properly a question of international law. Furthermore, they claimed that Bild‘s journalism fueled “Nationalismus”, “Vorurteile” and “Fremden- und Chinafeindlichkeit“.1 In a further reply of 17 April 2020, the Chinese Embassy sought to drive a wedge between Bild and Merkel’s more pro-Chinese Government: “BILD ist nicht Deutschland! Gott sei Dank!” and appeared to leave it at that.

At this point, many a Western journalist would have backed down, and issued a grovelling apology or slunk quietly off into the night. The Editor-in-Chief of Bild, Julian Reichelt, is clearly made of sterner stuff. In a brutal broadside, he lambasted the Chinese Government for its klepto-economy, its lack of transparency, its nationalism, its record on human rights, and its pervasive surveillance state.

The spectre of pandemic reparations?

For all this makes for great copy, sound and fury may well be obscuring our understanding of an important geopolitical shift.

It has become common in geopolitical analysis to depict ‘Xiism’ as a sort of pseudo-globalism. This is a mistake. It makes more sense to understand the Chinese foreign policy establishment’s tactical approach to international organisations as characterised by entryistic cooption. China has largely been content to leave the architecture of global multilateralism intact, even advocating for a conservative approach to existing multilateral doctrine. It seems as though China’s endpoint is a multilateral system that supports China’s long-term strategic priorities, not globalism per se.

In some ways, the position that China occupies in world affairs is analogous to Britain’s at the outset of the Revolutionary Wars in Europe. Napoleon’s Continental System was frustrated time and time again by the dependence of France’s European allies on English manufactures. Even with England itself facing bankruptcy, Tsar Alexander I was unable to resist the pull of English goods, and, in 1810, he weakened, and allowed 600 English merchantmen to land their cargoes at the Baltic ports. During the Napoleonic Wars, Britain’s eventual victory over France was assured by its control over the seas, and thus its control over the supply of raw materials needed for its industrial base. Quite simply, English manufactures were irreplaceable.

Unlike Putin’s Russia, China today has no interest in multipolarity, but in obtaining a hegemonic position in international relations. Its hegemony will depend on dominance in the production of essential manufactured goods, an area in which China already occupies a commanding position, and one which is only going to grow as Chinese control over raw materials across Eurasia, Africa and even South America is extended. Meanwhile, in the United States, the ‘Wall Street mentality’ is too obsessed with the financial aspect of the economy to recognise the extent to which American power has been degraded by the hollowing out of American production.

Perhaps if China were less churlish, it might well have responded by making a tokenistic payment to every other government in the world for damage caused by the pandemic. After all, what would we have done with the money but buy more Chinese goods? The sad reality is that the problems Western nations face are structural, and would only be aggravated by a reparations payment from China.

“What to do? What to do?!”

As chess grandmaster Varuzhan Akobian likes to exclaim, “What to do!?” The responses to this state of affairs look quite different for the United States, China, Germany, and Europe ex-Germany (ExG) respectively.

The United States has had too great a fixation on controlling access to oil; in future, access to a more diversified palette of raw materials will be necessary for industrial competitiveness.

As global hegemon, the United Kingdom used its navy to ensure unimpeded trade routes for its own merchants; the United States currently uses its navy to ensure unimpeded trade routes for everyone else’s.

In the area of intellectual property, given the wholesale theft of US IP, one approach would be to consider the abolition of patents, in order to prevent the theft of invention, to tie innovation and production much more closely, and to give American producers of generic and derivative products the chance to compete. The present patent system merely facilitates the theft of US-developed intellectual property.

There is a growing understanding on the left and the right of the need for reinvigorated American manufacturing and industry, but it is questionable whether many in the American political establishment appreciate the full import of Chinese dominance in this area. Eventually, reality will strike, but at that point it may be too late.

China’s problems are almost the opposite of those of the United States. As in the case of the United Kingdom two hundred years ago, China’s security will depend on its ability to retain its dominant position in industry and manufacturing, but its pursuit of global dominance is coming at considerable cost in terms of productivity, competitiveness and innovation.

It should matter more to the Chinese political elite that Chinese businesses’ reputation for trustworthiness is next-to-zero, and that trust in the intentions of its Government is almost non-existent. No amount of propaganda can undo the actual experience of dealing with Chinese businesses and entrepreneurs, and this is a bigger problem for Chinese business than Beijing would care to admit.

As for Germany, one cannot help but have admiration for the German Mittelstand and the stability of the centuries-old institutions which underlie it. However, a half-century of secularisation, illiberal anti-family social policies, and an openness to mass migration is undermining the cohesion of the German state. German industry should not be expected to subsidise illiberal social experiments, social incohesion, and the profligacy of its European neighbours.

Finally, ExG needs to understand what lies behind Reichelt and Lili’s mutual accusations of nationalism. Both Germany (Rhine-Ruhr) and China (Guangdong) have inimitable manufacturing heartlands. When powerful net exporters such as Germany and China engage in the rhetoric of anti-nationalism, it is often just a disingenuous way of saying, “Keep your borders open for our goods!” ExG should ditch the Euro, free itself from the industry-crushing shackles of the European Union, pursue more pro-family social policies to rectify their entrenched demographic problems, and learn lessons from the German and Chinese industrial models.

Footnotes

  1. Nationalism, Prejudice, and Xenophobia/Chinophobia.
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