EU-CHINA SUSPICION AND MISTRUST GROWS

23 October 2022

The EU, as with other trade blocks, is forever updaing its ways-and-means industrial strategy plan. This war as a trigger to that process, but also after the COVID-19 pandemic induced bottlenecks in supply chains that sped up the process of de-globalisation.

The European Commission, which runs the EU with von Leyen as chief, is always tuning its industrial strategy and its plans and programs for the supply to its membership of raw materials, batteries, pharma, hydrogen, semiconductors and cloud and edge technologies. The huge bureaucracies running trade blocks - in this case, the bureaucracy supporting "fortress EU" - exist for the purpose of managing ways-and-means to achieve the goals of the political leadership, and enormous amounts of time and people-resources go into this, of course.

So let's take a look at the current worry in the mainstream media around the EU's intention to reduce its dependency on China. First, is there anything new to this? Then, how does America control its empire? And finally, what does this decline mean for the rest of the world?

https://www.rt.com/news/565119-eu-china-technology-dependence/

This intention goes back a long way:

https://www.reuters.com/world/china/eu-unveils-plan-cut-dependency-china-others-2021-05-05/.

At least when there is a big bully in the school playground everyone is careful to keep in their place and there is a high level of order. But our very own global godzilla, America, is aging and weakening - why? And what are the consequences?

The seeds of self-destruction are in the mechanism controlling the rise and fall of empires, so well described by Ray Dalio. As the dollar strengthens, more and more countries store the profits from trade in the global currency of exchange ie America is awash with other peoples' money and living off this excess fat.

If America's abandonning the gold standard in 1971 wasn't enough of a warning of trouble to come, certainly the financial crisis of 2007-08 was. The other side of of this American, and Western, indebtedness to the countries at the other end of their supply chains - as producers of raw material and energy inputs, as partners in global manufacturing, and as consumers of Western high-end goods and technologies -  was the strengthening of these economies of the global South.

This is why the American trade set-up of global bodies (ie, rules) for global governance, established after the war, began to weaken and why economies have been de-integrating. 

I don't know if this is true or not, but it is the picture that I have of deglobalization. Just as trade and communication fosters dependency and a certain trust in mutual prosperity, so de-globalisation is fostering suspicion and protectionism.

As to the EU, whether you like it or not, and putting aside the ineptitude of EU sanction regime, though they are a top-down democracy, they do have a clear goal - a federal Europe - and through treaties between member states are slowly getting there, although at great cost and with huge and increasing risks to the plan.

What I hadn't realised until this war was quite the extent to which America controls Europe, how it does it, and the consequences of American global dominance, including America's fears of losing its grip. 

As bluntly described in earlier posts here, America's tools for controlling its empire are the dollar, trade and violence, soft and hard power if you prefer. The global South led by the BRICS, as fast as their economies mature and diversify, is pulling out of this arrangement and moreover producer nations are now throttling the global North by cutting back on supplies and raising prices, all in the name of redressing the balance of power in a world which is no longer unipolar.

Mutual suspicion is forcing the EU to modify its plan - it's got this clear mission of achieving a federal Europe; it has a clear vision of a fortress Europe protected from outside competition and inside supported by the free movement of goods & services, capital and people; it's got strategies for achieving that goal such as its ever-evolving Industrial Strategy.

The EU has always had plans, and it is pretty flexible, if undemocratic in a historic sense, as it evolves the moving parts of its mission. 

But also, it is subject to this constraint that America is the boss - many argue that today's EU is the descendant of a body created by America, as part of its post-war plan for "world domination"! 

As to the future, if deglobalisation means Europe reducing its dependency on China - Russia too evidently - then it ought to be at the same time thinking about reducing its dependency on America, so that a multi-polar world be an explicit goal of the EU (...on its way to World Domination).

FOR PEACE WITHOUT VICTORY!

FOR EUROPEAN INDEPENDENCE!!