XTech nationalism: China reveals weakness of European industrial policy

The agreement between Brussels and Beijing to limit Chinese hybrid car exports is only a few days old, as China upsets foreign countries with the next list of technology controls. AI, biotech, solar panels, drones and even tunnel boring machines may only be exported under conditions or in some cases not at all. According to Beijing, it is about protecting national security. It is also likely to be about building up bargaining power. What the step reveals is the different view of the world. Xi Jinping’s perspective is always first that of technological independence. Behind this is above all the old wound of China from the 19th century, when the Middle Kingdom slept the industrial revolution. The country was then technologically inferior for more than a century. The lesson China has learned from this is simple: anyone who wants to be independent and strong must master technology. This is why the country trains many millions of engineers every year and prioritizes STEM subjects and artificial intelligence in schools and universities much more than Europe. That is why it is investing insane sums in industrial policy. The result is an imbalance in the Chinese economy, which for large parts of the population is no less than a deep economic crisis that has lasted for many years. This also reveals the crucial weakness of European industrial policy and defence-oriented dealings with China. Tariffs and export caps for Chinese products secure a greater market share for European companies. However, they do not improve the continent’s technological competitiveness and the position of car companies on third markets. Trade policy in itself may yield individual results, but it sets the wrong focus. It does not accept competition, but threatens to further increase ossification. It fights a symptom without going to the cause.