Prof. Amighini and Prof. Bruni were invited by European Generation on the 15th November
to discuss about EU and China relation
“A dove that kindly invites you to dinner, a dragon that pragmatically offers you help”, these are the images used by Professor Alessia Amighini to outline the current profiles of Europe and China on a global outlook. The way chosen by the speaker in order to present the figure of China and its relation with the rest of the developed world is indeed particularly innovative and new as the topic itself, which, as she underlined, just ten years ago would not have been of any relevance to an audience of university students.
Nowadays, China has definitely become the third pole of the world in terms of interdependence, but the awareness of the other superpowers and of public opinion in general on the increasing role played by the Asian country has been pretty low. In fact, it is only from 2001, when China entered the World Trade Organization, that the rest of the world started realizing the importance of getting more control on this big player and becoming aware of the process that, in less than ten years, would have shifted the world’s center from the Atlantic to the Pacific. In this context, a particular emphasis should be put on the EU’s point of view and on the relevance of the reciprocal perspective with China. Indeed, in a world that is becoming more and more multipolar but less multilateral and lacking in leaders, the need for coordination and cooperation is certainly one of the hottest topics on EU agenda. The differences in the attitudes towards cooperation between the two actors are, by the way, extremely evident. Europe is more interested in social and developing issues, and, as perfectly reflected by its “dove” aspect, Institutions and rules are the instruments through which it prefers to relate with the rest of the world. By contrast, “the dragon” demonstrates instead to be far more practical and “authoritarian” in the relations.
Thus, at the moment China represents one of the crucial tests for the EU cooperation and the key issue is whether we should look at it with a friendly or defensive disposition. Solving this “rule vs relations” divergence of attitudes is currently one the biggest challenges to cooperation and in such an unstable and critical situation it puts the importance of common goods and financial links in an even more outstanding position.
Indeed, in today’s multipolar world, finance and financial markets are the most important links between the countries, but also the scenarios in which the frictions are more conspicuous. In order to overcome these divergences, nations have always had the need to cooperate with each other via financial markets. According to Professor Bruni, however, we have already lost the control of on finance: from late 90s to 2007, the debt/GDP ratio has increased from 90% to 140%. The main driver of this dramatic change was the reaction to the uncertainty of globalization, since many economic agents were not able to adapt to the changing conditions of the new world. Prof. Bruni further elaborated on that by referring to the 2008 crisis: “At the very beginning, there was a little liquidity crisis: money stopped circulating. Excessive debt was at the core of the debt and they tried to solve it by putting a lot of money in the system - a good temporary solution in the short term, but not in the long term - but creating bigger debts in the end.”
Thus, there has been different attempts to take precautions against the increasing overall debts. The most efficient one was the 2009 G20 Summit, which only focused on the very technical financial issues. The other attempt is now to relaunch the integration of the Eurozone from an economic point of view in order to fix the cooperation problem between EU countries. Prof.Bruni explained that there are three dossiers regarding this method on Europe’s table: restructuring the governance (having a single financial minister), defining a common attitude towards the issue of single currency and promoting fiscal solidarity (harmonized taxes).
As mentioned before, there have been significant progresses that introduced China as the third pole of the world after its admission to WTO in 2001. In particular, Prof. Amighini mentioned the resistance of China against the crisis in 2009 - fact that made the world realize the strength of its economy - and the decrease in the GDP growth of China from 10% to 6.7% in 2014, which also affected other poles of the world and caused them to state their need for Chinese demand in the market.
Nevertheless, financial markets are only one area in which frictions arise and the need of cooperation is evident. Indeed, the urgency of a collaboration exists also for other reasons. Recalling what has been pointed out, Prof. Bruni noticed that we are running towards a multipolar but less multilateral world. Multipolarity, in fact, does not automatically imply multilateralism. We are then witnessing a growing importance of topics of common interest – finance and trade, to stick to economics, but also issues such as climate change and peace – hampered, by the way, by increasing divisions on countries’ approaches to those issues. This trend is particularly clear when it comes to economics and politics. According to Prof. Bruni, China has a big job to do in this perspective. There are some steps, in particular when it comes to political reforms, which must be taken to change its attitude towards political life. Trust in international partners, transparency in international trade regulation and aligned guidelines for intellectual property are only some of the manners regarding which the “dragon” needs to abandon its pragmatism. On the other side, even the “dove’s” inclusiveness is not enough without an internal strong cooperation. In this regard, the lack of a fiscal coordination among European countries must be underlined.
Cooperation among, and within, political and economic systems is thus something that still needs to be worked on. In the prospect of an increasingly multipolar highly-integrated world, cooperation and reciprocal trust are essential. Rephrasing Prof. Bruni’s words, this is the need and the problem of today.