Ian Bremmer on China’s Influence in Europe

This podcast episode includes references to the Eurasia Group Foundation, now known as the Institute for Global Affairs.

Archival audio:

China, EU push for greater economic relations (Al Jazeera English, September 15, 2020)
EU-China Investment deal: At what expense? (DW News, December 31, 2020)
Tech Decoupling: China's Race to End Its Reliance on the U.S. (WSJ, September 8, 2020)
China says 'decoupling' of China and the US would harm both sides (CNBC, September 30, 2019)
Does Huawei’s 5G Pose A National Security Threat? (NBC, July 20, 2019)
Why the FCC Declared Huawei, ZTE National Security Threats (Bloomberg, June 30, 2020)
US hits Huawei and its suppliers with new sanctions (Money Talks, Aug 18, 2020)
Alaska summit: US and China trade barbs in heated exchange (DW News, March 19, 2021)
U.S., China exchange strong words, but both label talks constructive (PBS NewsHour, March 19, 2021)

Transcript:

April 13, 2021

IAN BREMMER: Certainly, the Cold War rhetoric is considered politically useful for domestic partisans, but the Cold War rhetoric serves very little purpose in terms of the U.S.-China relationship and the geopolitical order, because both the Americans and the Chinese understand that it would be a massive strategic problem for both of them if we were to end up in a Cold War.

MARK HANNAH: Welcome to None of the Above, a podcast from the Eurasia Group Foundation. My name is Mark Hannah.

One of President Biden's top foreign policy priorities is to restore transatlantic relations. Why? A big part of the reason is that America's allies in Europe are moving closer to China.

BREMMER: The Europeans do not see China as their principal national security threat. No one would say that in Europe. Everyone says that in the United States.

HANNAH: That's political scientist Ian Bremmer. He's the founder and board president of my organization, the Eurasia Group Foundation. I caught up with Ian last week, and he explained why European countries are quite comfortable accepting China as a major trading partner and a global power.

BREMMER: It's very different than the Cold War, in which the Americans and Europeans together saw that the Soviets were the principal threat and help to bind us together economically, politically, strategically, ideologically. None of that holds true with China.

HANNAH: Positive relations between countries in the European Union and China have stalled somewhat due to economic sanctions that the EU has leveled against Chinese leaders—for human rights violations in Xinjiang and other things—and sanctions China has placed on European countries in response. But on the whole, Europe is not shying away from working more closely with China.

Interlude featuring archival audio

HANNAH: European countries argue they have something to gain from China. With technology, economic investment, trade and infrastructure, European leaders appear to take a more pragmatic approach to their relationship with China.

BREMMER: The reality is that the orientation of the United States and Europe are actually fundamentally different. That's made more challenging by Brexit because the U.K. is the country in Europe that heretofore has been most aligned and trusted by the United States in strategic orientation. They're no longer a part of the European Union. Secondly, the departure of Angela Merkel, who's probably the person—the figure—in Europe that has been most multilateralist in terms of rule of law and international architecture. And the fact that Macron is the most important figure in European politics for the next coming years and perhaps longer than that, depending on his upcoming elections, which should be a layup. But nothing in French politics is quite a layup. And there, the fact that the French are much more willing to hedge, themselves engage in industrial and cyber espionage against the United States as they do against other countries and do have this idea of European sovereignty, of strategic autonomy, of a relationship with the United States that isn't going to be arm's length. It'll be closer than the relationship with China, but it will balance between both.

So, I think all of those things imply that when you talk about the future of the global order, such as it is, U.S. allies in Asia will be very aligned vis a vis China. Mexico and Canada will be very aligned vis a vis China because they are overwhelmingly oriented to the United States and perhaps so to the U.K. But the European continent is actually much more flexible and is harder to read and is going to be difficult to align with the U.S. the way it might like it to.

HANNAH: This is particularly worrisome for the United States and for President Biden, who is trying to reengage Europe after relations soured during the Trump years. Ultimately, the U.S. wants Europe on its side, not China’s, because without allies from Europe on board, the U.S. will have an increasingly difficult time maintaining its primacy in the face of what it calls the “China challenge.”

BREMMER: China is vastly more powerful than it has been at any point vis a vis the United States in modern history. So, their ability to say no to U.S. directives—and accordingly, their willingness to say no—has grown a lot. And the number of places where we are increasingly competing and in confrontation with each other is also growing, including in a bunch of areas internally or externally, but that the Chinese government considers to be internal and considers to be sovereign—the Uyghurs, most obviously, but also Hong Kong, Taiwan, even the South China Sea in the nine-dash line. All of those things are perceived by the Chinese government to be internal, sovereign areas of decision, and they are kind of red lines for the United States.

HANNAH: It seems this, quote unquote, “crisis” is only getting worse in the sense that China continues to feel more emboldened to do what it wants. It goes against America's agenda all the time on human rights, on international norms, and on trade. China now sets its own agenda and brings other countries into its sphere of influence. So, there appears to be a failure in Washington to fully understand China's strategic aims and to properly address them and respond to them. Why do you think that's happening?

BREMMER: Firstly, because most of us don't believe they're as good as we are. They still think that they steal stuff, that they don't really develop their own IP, that they don't really have entrepreneurs and high-class scientists. So, that's one. Secondly, because we believe we're right, and since we're right, we kind of think we are ultimately going to prevail. So, there's that. There's American exceptionalism. And third, because we've been programed for a long time to have more chips on the table and be able to throw them around, and if we bluff, our bluff doesn't get called. And that's important, too. One of the interesting things is if you go and talk to a member of the foreign policy establishment in the U.S. about China—and you can have a very intelligent conversation. They’re very thoughtful. They know a lot. A lot of them speak the language. They've certainly spent some time there—all of that. And then you say, “What are the things you think we in the United States could actually learn from China that would make our system better?”

You’ll usually get a dumbfounded look, and even if you don't, it's almost never something they've thought about before, which strikes me as an insane thing. Right? I mean, just a legitimately insane thing. The second most powerful country in the world has become the second most powerful on the back of a completely different system and one that we don't actually have a lot of time or respect for. That should, by definition, be one you want to learn from, not that you want to replicate—God forbid—but one you want to learn from. The Chinese don't want our system, but, my God, they want to learn from us. And that's indeed how they've become so successful.

HANNAH: There's very little trust between the United States and China. Relations are tense between these two great powers, and, of course, another major source of tension is the shifting trade and tech landscape. The U.S. doesn't want to rely on China as much. China wants to be self-sufficient economically and technologically.

Interlude featuring archival audio

HANNAH: Everyone fears a great decoupling of the world's two largest economies and largest tech sectors.

Interlude featuring archival audio

HANNAH: Ian, how great a risk is this decoupling, and is Europe going to be forced to choose a side? What are the economic repercussions of all this?

BREMMER: The problem is that so much of the last fifty years has been about China taking advantage—with full Western support—of an extraordinary amount of inexpensive, very efficient labor. That labor is increasingly not relevant to industrial productivity, to manufacturing productivity, and even to outsourced services productivity. Increasingly, it's robotics automation, and it's big data and deep learning with artificial intelligence. That means the integrated global supply chains that made Western corporations want to bring their labor and capital into China suddenly feels like, “Why would you do that?”

That's one piece of it. The second piece is that even though you have a lot of integration, and you're relying on a lot of imports from China, you also have an advanced technology sector that doesn't have access to the Chinese market. The American companies like Google and Facebook and Amazon have no access to China, the largest data market in the world, and the Europeans don't have those companies. When you put those two things together, you end up—these are really significant drivers that move you towards less globalization. Now, that doesn't mean the Europeans or the Americans are going to stop getting goods made in China. I think the level of interdependence we have remains quite deep—both American and European.

But the level of dependence on tourists—Chinese tourism in U.S. markets is very, very high. The level of dependence on Chinese students coming to the U.S. and paying full freight is very, very high. Many American corporations have the future of their business models very much still attached to access to Chinese consumers. Their brands are being built out over there. These are powerful special interests in the U.S. and in Europe that want to maintain that relationship. So, Mark, I'm not worried that we are about to see all of these interests just give up the ghost. The Europeans and the Chinese and the Americans and the Chinese will still have an enormous amount of business to do with each other. But there are areas that are becoming decoupled and that have the potential to speed up significantly. That is happening faster between the U.S. and China than the EU and China, and that differential has the ability to get the Europeans to say, “No, we're not on board.” And certainly 5G is a component of this and certainly other things like geo-tracing, biotech, driverless cars, smart cities—all of that data surveillance capitalism, where it's very clear the Americans won't let the Chinese in. Many Europeans absolutely will. If you're Greece or Italy, and you're part of Belt and Road, and the Chinese are investing in infrastructure, and that infrastructure is increasingly smart infrastructure, you're not going to cut that off.

HANNAH: But as much as America has these concerns over decoupling, we've also conversely pursued a policy which has pushed China further down that road. Fears over foreign interference and national security have led us to take steps against Chinese companies like Huawei.

Interlude featuring archival audio

BREMMER: Again, I think the promise that China would be included in a global supply chain and then when you tell them, “Well actually Huawei, which is your most important national champion, is not a part of that. And we're actually going to cut them off from their semiconductors because it's a national security threat.”

That tells the Chinese, “You need to build that semiconductor capacity for yourself as fast as humanly possible.” Now, is that the intention of U.S. policy? To make sure the Chinese invested a lot of money in creating their own semiconductors so they wouldn't be interdependent on the U.S.? I would argue to you, Mark, that we didn't actually think that through. We simply thought about what we wanted and not about how the Chinese would respond and not whether that response was in our interests. And I think that is shortsighted policy. I actually want American and Chinese policy—both individually and with our allies—to consider how a robust Chinese technology superpower is likely to respond and whether or not that's in our interest. If it isn't, we need to go back and think a little harder. That would be my perspective.

HANNAH: The fact that China and the U.S. are still heavily integrated strikes me as a serious limitation of the Cold War analogy that's being pursued in Washington. The U.S. and the Soviet Union during the Cold War obviously had very separate economies and separate trade blocs. That's not the case with China and the U.S. today, and it sounds like you don't foresee that utter separation happening. So then what's the value or validity of this analogy we keep hearing?

BREMMER: Certainly the Cold War rhetoric is considered politically useful for domestic partisans, but the Cold War rhetoric serves very little purpose in terms of the U.S.-China relationship and the geopolitical order, because both the Americans and the Chinese understand that it would be a massive strategic problem for both of them—irrespective of the lack of trust—if we were to end up in a Cold War. A Cold War would imply that we would be cutting off all of the interdependencies we have. And again, they are not small. They are incredibly deep. Our economies rely on each other in a major way. The Chinese buy an awful lot of American treasuries. If they were to suddenly dump them, they'd be worth a lot less. They don't want to do that. The Chinese have a lot of money and American real estate. They want to send their kids to American University. The American companies—the Fortune 500—are littered with companies that are making a lot of coin in communist China, and they don't want to stop

HANNAH: In light of all that, where is this Cold War rhetoric coming from, and why are tensions still so high?

BREMMER: American foreign policy makers are not prepared to treat China as a legitimate power or as an equal on the global stage. They're not. And the Chinese demand being treated with respect, as an equal on the global stage, and as a legitimate power. The Chinese believe they may have an authoritarian system, but they believe their authoritarian system is as legitimate as America's bruised democracy. And in fact, the Chinese government thinks their model of government is more likely to succeed in the future. I don't actually believe that, but I recognize there is a debate. And in so far as American foreign policy makers completely don't accept the Chinese perspective and are not prepared to give lip service to it, then that creates the theatrics that got you Anchorage.

Interlude featuring archival audio

BREMMER: The Chinese lectured to the Americans in a way I had not seen a foreign policy directly speak to Americans since President Putin—Russian President Putin's speech in Munich in 2007. So, to hear this from the Chinese was quite something. And I think when you look at what Xi Jinping has been saying recently, which is this feeling doesn't matter if it's Trump or Biden. This feeling that they must control their own technologies—critical technologies—that they can't actually be a part of the global supply chain. They can't buy it. They can't ask for it. They can't share it. They can't even steal it. They're in a position where they're going to have to develop and own it themselves. The promise of a global supply chain and an integrated globalization that the Americans and others had held out to the Chinese as what was going to allow them to grow and to become a great power—that is no longer something the Americans particularly believe in. And it's certainly no longer something the Chinese trust. That's the big shift in the global order. That's what is behind this level of decoupling we're seeing. It's what is behind a high level of competition that ultimately is quite dangerous between these two countries, not because I think we're about to enter a Cold War. We're not, given the level of integration. But in areas where that integration is quickly unraveling, you're going to have a fight—a fight between two countries that are close to parity.

HANNAH: OK. We've discussed a lot of issues at play: China's rising power, decoupling, and the importance of technology, interconnected global trade, and human rights violations. America, Europe, and China are clearly enmeshed in a complicated and multidimensional relationship, and it will take a deft hand to navigate all that. Right now, it seems the U.S. is pressuring their European allies into something of an anti-China camp. I'm curious whether you think we risk causing a kind of rupture if we push our allies too hard in a direction they're not really interested in going in. How would you advise somebody like, say, Jake Sullivan, the National Security Advisor? What would you advise them to do as they position American policy toward Europe?

BREMMER: Well, one: they're not going to do that because they don't want losses. If it looks like they're not going to get acceptance from the Europeans on issues, they'll back down before that happens. There's a there's a lot of diplomacy happening in advance of making public announcements. Even though things might not go the Americans’ way, I don't think it risks massive backlash or fracture. That's just not the modus operandi of this administration.

But I think if I were advising Jake specifically on this issue—and I'm not, but I am talking to a lot of people around the Biden Administration—I would be saying carrots as opposed to sticks. What they need to be doing is coming up with a series of policies, both domestically and internationally, that make the U.S. and its Western allies so robust that the Chinese actually see that they want to align and integrate their behavior more with us because they'll lose out otherwise, especially because the Americans have an orientation of telling countries they are doing things that are unacceptable when we don't actually have a policy mechanism to nudge them in a direction that would make their behavior more acceptable. So, when we tell the Chinese, “You can't do X, Y, and Z on Hong Kong,” but the “or else” has no teeth, it is not useful. Right?

I'm not trying to say we should have a values-free foreign policy. No. But we need to understand that when it comes to China—which is in a uniquely powerful position to tell the Americans to “fuck off” internationally—we need to be thinking about how we can make ourselves and our allies more competitive.

HANNAH: That's a very different strategy than what we have seen in recent years, investing billions in defense and military equipment to counter China. But the rivalry is much more complicated than that. It's not some sort of zero-sum game, not in a world that is more economically interconnected and more geopolitically interdependent than ever before. This great power competition is not about who would win in a hypothetical shooting war, nor is it another Cold War. It's in fact something new, and it will require new thinking. That's why it's been so great to talk with you, Ian. Thank you so much for joining.

BREMMER: My pleasure. It was a lot of fun.

HANNAH: I'm Mark Hannah, and this has been another episode of None of the Above, a podcast from the Eurasia Group Foundation. Special thanks go out to our None of the Above team who make all of this possible. Thank you to our producer Caroline Gray, our associate producer and editor Luke Taylor, our sound engineer Zubin Hensler, and EGF’s graduate research assistant Adam Pontius. If you enjoyed what you heard, we'd appreciate you subscribing on Apple podcasts, Spotify, Stitcher, or anywhere else you find podcasts. Rate and review us, and if there is a topic you want us to cover, send us an email at info@noneoftheabovepodcast.org. Thanks for joining us. Stay safe out there, and see you next time.

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