After four years of painful torture by the Trump administration, when the Biden administration expressed the US willingness of resuming the Atlantic Alliance, Europeans feel really at ease. The Biden administration used the delusion of rebuilding the Western Democratic Alliance to fight with an imagined autocratic alliance, European public opinion feels puzzled and divided, but reassured when the Russia-Ukraine war erupted. They feel they have to stand with Ukraine to maintain the post Cold War European order, and the U.S.-led NATO is their best guarantee of such an order. Let alone their concern about Europe's inability to deal with China in the case of a major event across Taiwan strait.
Since the last decade, Europe's economy has been consistently sluggish, social conflicts have become salient, and public opinion doubts the European public governance model. In contrast, as the Chinese economy continues to develop, the degree of social inequality has decreased. In the middle of the pandemic, a public opinion polling team from Harvard University conducted a survey on public attitude towards their government in many countries, and the trust of the public in the Chinese government was extremely high. China's Belt and Road Initiative (BRI) has made China more popular in Africa and other Global South countries, while Europe's influence has declined. So the decline in European confidence has led Europe consider China as a systematic rival.
"De-risking" will deepen the current situation of "three highs and one low" in Europe. Europe is already trapped in a triple complex situation of high indebtedness level, high inflation rate, and high interest rate, coupled with low growth rate, making increasing public debt difficult to handle. Historical experience told us that overcoming such crises often requires high inflation, but in today's context, high inflation will clearly lead to huge social unrest. European society is becoming increasingly complex and fragile. Can it withstand a new round of stagflation?
Only by rebuilding strategic trust between China and Europe can we get out of the slumps of economic development.
Since the end of the Cold War and the disintegration of the bipolar world, China and Europe have engaged in long-term and in-depth economic cooperation. The trade and investment between the two sides have continued to grow, injecting new growth momentum into the Chinese and European economies. So for quite a long time, the EU was China's biggest trading partner, and China was the EU's second biggest trading partner. The technological cooperation between European and Chinese enterprises and engineers was fruitful for all.
However, as Europe tries to de-risk with China, this sort of strategic mistrust with regard to China has triggered some troubles for the EU's commitment to fighting with the climate change, for example. China has an evident advantage in the production of renewable energy equipment and electric vehicles. However, Europe doesn't want to engage in deeper cooperation with China in this sector, because it doesn't want to be "dependent" on China, although the absence of cooperation with China will be detrimental to Europe's adherence to its carbon neutrality schedule. To ensure their energy provision, some European countries, such as Germany, are even restoring coal-fired power plants that have been abandoned for many years. The climate change and geo-political conflicts have put Europe in a delicate position. For a few years, some European countries have experienced large-scale forest fires, causing significant carbon dioxide emissions, not to mention the carbon emissions caused by a large number of shell explosions during the Ukraine war. The "de-risking" with China has disrupted the existing global industrial chain, resulting in high prices of final products, and exacerbating existing inflation in Europe, putting the European Central Bank's monetary policy in a dilemma. Because of Europe's strategic mistrust with China, there is a stark contrast between China's opening up to foreign investment and Europe's obstruction of Chinese companies investing in Europe. So Europe and China need to start negotiation again to rebuild their strategic trust, in order to find a way out of the global economic downturn.
