Why Europe must break with US on China policy to avert global economic disaster
- The prospect of the global economy splitting into rival US and China camps is growing more likely, but Europe can help prevent this
- Only an enlarged European community that includes Britain and moves away from US foreign policy can provide the needed counterbalancing force
The great divide will not happen overnight, but it is under way. There is still time to devise countervailing measures and create counterbalancing poles of influence, but this will require radical policy actions going beyond the US-China arena.
Trade and investment between the two great economic powers will suffer as sanctions and counter sanctions multiply, and the economic fate of other powers that are reduced to becoming satellites of these two will suffer as a consequence. Physical confrontation will become a real possibility.
Britain’s relations with Australia, New Zealand, Canada and others are no longer strong enough to enable it to form a Commonwealth Economic Union, as might have happened before it joined the EU. But these links have value as something to bring to Europe in the event of a UK-EU remarriage.
Such a reunion could also revive China’s hopes of seeing a “European” Britain become part of the Belt and Road Initiative, taking advantage of its centuries of experience as a global trading hub and using the capital-raising skills of the City of London to finance completion of belt and road projects.
These might appear grand assumptions, but the fact is that the global economy is heading for a very bad place as things stand. There is the prospect of a widening economic recession that will affect more countries that become victims of US-China rivalry or, much worse, physical clashes between these two giants.
It is tempting to see US-China rivalry as a battle between good and evil, between democracy and autocracy. There is some truth in this assertion, but the problem is equally about economic rivalry, which clothes itself in concerns over human rights and security issues.
The world needs to figure out how to escape the thrall of such narrow perspectives which can only lead to a dead end. For that to happen, we need a new balancing factor in the global power equation, and a further renaissance in Europe seems the only viable option now.
Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs