In the United States, a rare element of consensus resists polarization: the refusal, classic in history, to see China, second world power, exceed America. Example among others of American determination: war waged by Washington in Beijing in semiconductors. The European Union (EU), less warlike because above all occupied with economic issues, has considers China since 2019 as a “systemic rival”.
The new tools of “European sovereignty” which she has acquired, although she denies it, aim for China: 2019 regulation establishing a framework for filtering foreign direct investments in the EU; Regulation of 2022 relating to foreign subsidies distorting the internal market. The latter, implemented for the first time in the spring of 2024, made Chinese investors renounce investing in Bulgaria. In the commercial field, after having procrastinated, the EU multiplies procedures against imports of Chinese automobiles in the common market. In response, China opened a survey on August 21 on August 21, European dairy products.
A little over twenty years after the entrance to China to the WTO ardently pushed by America and the EU, everything has changed. China especially. Because after a unique development by its magnitude and speed, doubt has settled. Not a week without the Chinese economy showing signs of weakness. Thus, the unemployment rate of young people reached 17.1 % in July according to official figures published on August 17. Still according to official figures, industrial production has been packed in July (+5.1 %), the lowest pace since March 2024. More broadly, the growth rate of 5.2 % in 2023 – which would make some people dreamed – has been the lowest in 30 years.
Europeans and Americans, should they rejoice in Chinese difficulties? It’s not that simple. Because globalization moves more than it decreases. China, whatever you think, is at the heart of the world economy. The news illustrates it.
On the macroeconomic level, Australia, warned on August 19 that the fall in the price of the iron ore of 38 % from the 1er January would pose important difficulties to him. The reason? 70 % of Australian iron exports are intended for China. However, when China slows down and its interior iron demand used to make steel is reduced, it imports less, thus penalizing Australia. The price of iron ore has gone from $ 230 per ton in May 2021 to less than $ 100 on August 15, 2024.
40 % of the EU foreign trade pass each year by the Taiwan Strait
On the commercial level, the interest of Europe commands to remember that 40 % of the foreign trade in the EU and no less than 100,000 commercial ships pass each year through the Taiwan Strait. A country annoys France for this reason, because it wants to continue to trade with China: Germany. And this although in 2023 Germany, unlike the EU once again in commercial matters with China (+37.9 billion euros – Eurostat), accused a deficit of 59.8 billion euros (Destatis). If we get out of Europe, and despite what can be said about deblobalizing and refocusing China on its internal market, the facts are stubborn: in 2023, China is the first trading partner of 120 countries!
Above all, American irritation with regard to a form of Chinese mercantilism should not deceive: the war of customs tariffs carried out against China has effectively reduced the Chinese share in the American external deficit of $ 138.9 billion between 2018 and 2023. But at the same time the American trade deficit outside China, that is to say with regard to countries like Mexico, Vietnam Canada, Korea, India and Germany jumped 319 billion over the same period. It is not enough for America to harden from China to become competitive.
On the sectoral level, the automotive issue concentrates difficulties. For the first time, in 2023, China exceeded Japan as the world’s leading exporter of cars. The AIE (International Energy Agency) estimates that 60 % of the new registrations for electric vehicles in 2023 concerned Chinese cars. Europe, faced with this situation, is taken in vice. It ended up opening commercial procedures and announced in July up to 38 % additional customs duties on imports of Chinese electric vehicles. But the EU is actually discarded between the very high ecological imperatives of which it wishes to make a marker, and the reality of the delay in its automotive industry, dominant in the 20th century, compared to China, ahead of almost everything and in particular the crucial question of the batteries.
Ultimately, often martial political declarations are easy. But economic realities are strong. As such, it is clear that three major economic zones, America, Europe, China, are and will remain permanently powerfully linked.
