A new era of global leadership: The China -Europe Opportunity
Sukudhew Singh
The US reversed its tariffs, opting for a 90-day delay. This flip-flop highlights how the world’s largest economy conducts trade – unpredictably and with immense power. It seems that someone finally made the US president realize the consequences of these tariffs.
The 90-day pause appears to be an attempt to spin a policy blunder as a win. Regardless, this episode underscores an urgent lesson: the world economy can no longer remain under the shadow of the US. China and Europe must lead the way toward a more balanced global economy.
The US’s unpredictability should drive China and Europe to strengthen their own economies and stand firm against economic coercion. They must demonstrate that America’s tactics should not be the global trade model.
Giving in to a bully only encourages further demands. Instead, China and Europe should focus on innovation, productivity, and building mutually beneficial partnerships with other economies.
China, for instance, must resist the urge to flood other countries with its surplus industrial capacity. Instead, it should direct investments into job-creating ventures abroad. By distributing its industrial capacity and fostering collaboration, China can foster sustainable growth that benefits both itself and its trading partners. Importantly, these should be real investments, not debt-laden loans as seen in its Belt and Road Initiative.
China’s tech sector is already a global leader, but to realize its full potential, it must reverse its crackdown on private enterprise. Rebuilding consumer confidence should be a priority, but China’s model should not emulate the US’s wasteful consumption-driven economy.
Rather, China’s prosperity should be intertwined with regional stability and growth. Militarily, China must focus on being a force for peace in Asia, and avoid distractions like its aggressive stance on Taiwan. A conflict would harm both China and Taiwan, and with an aging population, China cannot afford to sacrifice its young men and its future in war.
For Europe, this is an opportunity to assert its economic independence from the US. As America turns inward and closes its doors to global talent, Europe should welcome skilled workers from around the world.
By addressing its fragmented market and heavy regulations, Europe can create a more business-friendly environment, boosting growth, innovation, and productivity. Europe’s economy has the potential to rival the US if it can embrace these opportunities.
In short, unless China and Europe rise to the challenge, talk of a multipolar world remains empty. The US will continue to dominate the economic landscape. However, if China and Europe seize the moment, they can create a more balanced global economy, where no single nation can hold the world hostage.
Sukudhew Singh is a former deputy governor of Bank Negara Malaysia. The article was first published on his LinkedIn profile.