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China's Rise - Europe's Fall!
4 February 2005 – Hong Kong SAR, People's Republic of China
China's economic success is giving rise to "China bashing" in the West and opening up a whole new can of protectionist worms as political parties look for a scapegoat to pin their problems on, told Dr. Frank-Jurgen Richter, President of Horasis. The Global Visions Community, the members at a roundtable luncheon hosted by the Hong Kong General Chamber of Commerce.

"We can see that China bashing around the world is an interesting phenomenon," says Dr. Richter. "We have even started to blame China for the rise in oil prices. So everything we don't like we blame on China."

As a result, citizens are increasingly calling on politicians to protect their factory jobs. Eager to win votes, politicians - and more frighteningly rightist parties - are only too willing to play on the public's fears to further their own causes. The U.S., for example, used to be considered a symbol of free trade and globalisation. Campaign pledges during the run up to the U.S. presidential election portrayed the U.S. as an increasingly protectionist nation trying to keep imports out and factories at home.

Protectionist fears reached flashpoint in the capital of Spain's footwear industry, Elche, in September 2004. Chinese companies had been building up their own manufacturing plants and their own distribution centres in the town for years, but facing falling business, Spanish protesters marched through the town carrying banners reading "Chinese out". The protest took a more menacing turn when two Chinese-owned warehouses and a lorry belonging to a Chinese entrepreneur were set on fire.

"Globalisation and market principles honoured by most of the world's businesses went up in flames along with the shoes in Elche. So it is quite a horrifying scenario if this China bashing continues," Dr Richter warns. With almost everything now being manufactured in Asia or in China, Europeans just don't want to realise that the manufacturing era in their countries is coming to an end. So the question to ask, Dr. Richter says is: "What will happen to Europe?"

On the extreme right of the spectrum, populist parties are fanning people's fears about their livelihood to get themselves elected and promote their cause. On the other side of the spectrum, the leftists are withdrawing into their shell and turning their backs on globalisation, against foreign influences, and against China.

In the past, when thinking about globalisation, the argument basically went that Western companies were exploiting the developing world by using cheap labour to boost their profits. That changed slightly when developing countries, like Mexico, began going head-to-head with China to attract FDI. Now, we see - as Dr. Richter calls it - an emerging south-north globalisation conflict. "Basically, it is countries like China - and India by the way - that are the winners of globalisation, and the West - Europe and North America - that are the losers. So it is now reverse globalisation if you will," he says.

Dr Richter suggests two scenarios could emerge as a result of this. One would see China continuing to grow, leaving Europe further behind, and forcing it to de-globalise and de-industrialise. Rightist parties could even come into power, destabilise the entire continent and reverse the successes that Europe has built up over the past 50 years. "If I tell this to politicians in Europe now they all say that I am crazy. But if the development continues as it is now, there is really a chance that this worst-case scenario will come into being," he warns.

On the other end of the scenario scale, China continues to be an important engine for growth for the world, but Europe reinvents itself and sets its sights on becoming the most competitive region in the world. Businesses downsize, labour laws and subsidies are brought under control, and the continent decides to abandon manufacturing over the long-term and move into knowledge industries, into education, and into services.

"I think this is the only way forward for Europe," Dr Richter says.

Horasis is a global visions community committed to enact visions for a sustainable future. (http://www.horasis.org)

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