6 mins - 29 de Marzo de 2023, 07:00
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Xi Jinping has made his position very clear. In a speech in April 2020 he said: “we must tighten international production chains' dependence on China, forming a powerful countermeasure and deterrent capability against foreigners who would artificially cut off supply [to China]”. With Spain, Xi’s goal of making foreigners more dependent on China while making China less dependent on imports is working out beautifully. In 2022, Spain exported €8 billion worth of goods to China while importing record number of €49 billion. Spain’s €41 billion trade deficit with China makes up 60% of Spain’s total trade deficit. As Janka Oertel and Agatha Kratz have explained, China uses its huge protected home market, forced technology transfers and subsidies to create unfair advantages for its companies in the competition with European firms. Left unchecked, European dependence on China will increase in key areas for our economic future, from telecommunications equipment to green technologies. We are already seeing this with key technologies for our low-carbon energy transition. On solar technology, China managed to all but wipe out European competition across the entire value chain, leaving Europe 95% dependent on imports from China. On battery technology Europe is also too dependent on China. We risk a similar development with wind power. Spanish-German wind power company Siemens Gamesa is a case in point. It had exit the Chinese onshore wind market in 2021 and is now also facing huge pressure in its home market. Undercut in price by Chinese competitors in addition to facing rising energy costs and management errors, Siemens Gamesa is suffering huge financial losses. Siemens Gamesa CEO Eickholt said there was definitely a risk the wind turbine industry would come to look like the solar panel industry, with China dominating market and supply chain. All the while, Beijing has demonstrated that it is ready and willing to use economic dependence to politically coerce European states. When Lithuania upgraded Taiwan’s representative office from “Taipeh” to “Taiwan”, Beijing responded with economic sanctions on goods that were from Lithuania or had Lithuanian components (e.g. in the case of German manufacturer Continental). These sanctions represented a frontal assault on the European Single Market. In his meeting with Xi Jinping on the sidelines of the G20 summit in Bali Pedro Sánchez betrayed little understanding of the realities of economic competition with China. Despite the record trade deficit, unfair competition and economic coercion, Sánchez said “economic and trade relations” were “positive”. He also fondly recalled the upgrade of relations with China to “comprehensive strategic partnership” as a result of Xi Jinping’s state visit to Spain in 2018. Sánchez should use his speech at the Boao Forum for Asia, China’s self-styled Davos, this week to change course, speaking out against unfair competition and economic coercion, making it clear that he sees Beijing’s authoritarian state capitalism as a competitor and systemic rival. He should announce that Spain (also during the upcoming Spanish EU presidency) will continue to seek mutually beneficial economic ties while moving decisively to reduce dependencies in critical sectors just as China does. That includes no longer relying on Chinese suppliers for critical infrastructure including 5G, a move Sánchez has refused to make until now.