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We'll soon be hearing that America and Europe (and even India) are trying to replicate China's success in their own countries. Against the backdrop of China's economic slowdown and the debate over the 'China Plus One' strategy, it is worth reflecting. It would certainly be dangerous to remain indifferent to the extent to which the country could dominate solar and wind energy, electric vehicles, batteries, new materials and products of new importance, and perhaps even semi-conductors over the next few decades.
Various countries around the world are wondering how to adapt to this potential domination or how to deal with it. It is important to understand whether China's current dominance is the result of past events or a reflection of the position it already occupies in industrial production. Are the countries that are scratching their heads in this regard, thinking about how to position themselves in the face of China, the foresight that matters, or have the countries of the Western hemisphere found it preferable to snore themselves to sleep?
In seeking answers to these questions, all positions may seem correct. The industrial upheaval that China has undergone over the last 15 to 20 years, particularly in the toy and clothing sectors, is prompting policymakers in our country to follow suit. All in all, it's understandable that the whole world has woken up a little late. While America once celebrated the success of Silicon Valley's tech entrepreneurs and their generation of millionaires, China was their supply base. But during this period, China began to almost discreetly control important new companies. China has become the world's leading manufacturer of electric vehicles, solar panels, wind turbines and components for the rest of the world. Perhaps it is being prevented from floating on the market at the moment. But it won't be easy to move away from dependence on Chinese products. It will take years for this effort to succeed.
And in the meantime, Beijing will acquire the ability to threaten trade sanctions. China recently cast a vermilion cloud over the chipmaking industry by imposing its controls on the supply of gallium and germanium. The West seems to have no choice but to blame itself for such a situation. At the end of the 20th century and the beginning of the 21st, Germany encouraged China to install solar panels on its roofs. Because, at the time, it was absolutely necessary to respond quickly to demand. Other European countries followed Germany's lead. China does not hesitate to push back.
By keeping construction costs low (even after state subsidies), China is almost surpassing its Western rivals. China has managed to dominate the entire solar panel manufacturing process, from polysilicon to the final stage. China controls 60% of the global wind turbine market. They dominate the active pharmaceutical ingredient (API) market. It is important to remember that the Indian pharmaceutical industry is focused on the API market.
Meanwhile, Chinese carmakers are taking advantage of the expansion of the electric vehicle market to succeed those who were once manufacturers of internal combustion engines. China has also made technological breakthroughs in the development of batteries for electric vehicles, which has significantly reduced the cost of batteries. When Chinese carmakers started making low-cost electric cars, sales soared. Tesla was encouraged to invest in a Gigafactory in Shanghai (a factory that manufactures energy and carbon-reduction equipment). This strategic foresight (found nowhere else) is particularly evident in the trade in industrial raw materials.
China has long been committed to combining cobalt from the Congo with lithium from Bolivia. When Indonesia banned exports of raw nickel, Chinese refiners flocked to the country. China also buys factories in Australia, America and Europe, when the technological advantage is enormous or when important parts are manufactured in these regions.
The question of what to call an economic system is a confusing one. When you think about it, the first name that springs to mind is "BRICS". It was the economists at Goldman Sachs, one of the world's largest investment banks, who gave this name to Brazil, Russia, India, China and South Africa—the initials of these countries—at the dawn of the 21st century. Their idea was that by the middle of the 21st century, the economies of these countries would collectively be known as the "G-6" (in the 1970s, America, England, Germany, Japan and Italy would together form a group of advanced industrial economies known as the "Group of Six" or "G-6" for short). (constitutes) will pass through the group of advanced economies. This idea held for about ten years, then collapsed. China (the world's sixth-largest economy in 2001) and India (not yet in the top 10) began to catch up. Both are now among the world's top five economies. But Brazil and Russia have not been able to realise this hope. Russia sees little future among the world's ten largest economies. India also appears to be lagging behind the other three countries in terms of per capita income. Even if you don't look too closely, there are a few things in common. In 2001, four of the world's six most populous countries were designated as "BRICS". They are also among the seven largest countries in the world in terms of surface area. From this point of view, it is reasonable to place them in a row in terms of geography and population.
But Pakistan and Nigeria outnumber Russia and Brazil in terms of population. Already, the inclusion of South Africa (a country with an economy one-tenth that of India) as a fifth member undermines the economic logic behind the grouping. But such a clan name cannot disappear easily. So regular conferences on the "BRICS" began to be organised. These meetings were certainly not lacking in interest. But rumour after rumour spread about unreal subjects. Many subjects were discussed. But in the end, only the "BRICS Bank" was created. However, following the accession of certain non-BRICS countries, such as Venezuela, the Bank of the BRICS is no longer particularly distinct from the other financial organisations created for international development.
A project for an undersea "BRICS cable" to protect information from American hands was launched almost ten years ago. But implementation has been very slow. On the other hand, China is also very good at manipulating information.
From that point of view, it may seem that the affair was badly put together from the outset. The BRICS conference also discussed the development of a new currency against the US dollar. But here again, India showed little interest. Indeed, China's economic progress and its close association with this monetary system did not seem favourable to it.
The fact that the dollar was escaping the clutches of the economy and aligning itself with the Chinese yuan was not pleasant. Meanwhile, the central idea behind the formation of the BRICS—to create a counterweight to the dominance of the West in the world system—is losing its relevance. The underlying logic of the BRICS has been broken. Some forty developing countries have expressed an interest in joining. But it was also difficult to create something similar to the G-15, the group of leading developing countries, with this idea. The G-15, which had the same objective, survived for almost 25 years and ceased to exist around ten years ago. The BRICS have endeavoured to fill the void left by the G-15. Neither China nor Russia are "developing" countries in the traditional sense of the term. What they have in common is their opposition to the West. In this sense, the BRICS were in danger of becoming an organisation run by Chinese diplomacy.
China's allies in the region include North Korea, Cambodia and possibly Myanmar. Beijing therefore wanted to broaden its base of diplomatic support. Unsurprisingly, it was Beijing that pushed for an increase in the number of BRICS members. China has sought to end Western hegemony by expanding the BRICS, seeking diplomatic ties with Africa and, more recently, strengthening its grip on the Gulf region by renewing its friendship with Russia. The BRICS have also begun discussions with another Chinese-dominated group, the Shanghai Cooperation Organisation.
The writer is a Geneva-based private banking compliance security expert, columnist and poet.
Messenger/Fameema
