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Decision time

By BENYAMIN POGHOSYAN | China Daily Global | Updated: 2023-06-07 17:05
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Europe has a critical choice to make that will profoundly shape its future


The rapid development of digital technologies has transformed the way people live and interact with each other. Everything from communications via smartphones, travel by technologically powered cars and airplanes, to the supply of electricity, water, and other commodities depends on semiconductors, the internet, and other features of digital life. The digital revolution evolves alongside the transformation of the global order from a unipolar world, marked by the absolute hegemony of the United States, toward a more diverse and complex construct of world affairs. It is challenging to assess when the transition will end and what the primary features of the new order will look like. Currently, the United States is still the most influential country in the world, with the ability to project military force worldwide, an innovation-driven economy, and a worldwide network of alliances and partnerships. Meanwhile, the economic rise of other powers, most notably China, India and Brazil, creates the contours of the future diverse world order.

In this complex environment, Europe needs to rethink its role and place. Since the beginning of the 16th century, Europe has been the world's ideological, economic, and diplomatic powerhouse, serving as the source and epicenter of ideas and economic innovations, as well as tensions and devastating wars. After the end of the Cold War, Europe launched one of the most successful processes for creating a common area of peace, economic development, and prosperity in human history. The establishment of the European Union and the introduction of the common European currency have contributed to the significant increase in the living standards of hundreds of millions of Europeans, making the EU a significant actor in international relations. However, the establishment and the impressive development of the EU coincided with the start of the unipolar world, in which Europe was perceived as a junior partner of the much stronger United States.

The transformation of the global order, the rising competition between great powers, and the launch of digital innovation have put tough questions in front of the EU. The only way to sustain economic prosperity and boost further development is access to the newest digital technologies, including artificial intelligence, data science, robotics, quantum computing, nanotechnologies, bio-informatics, and others. Currently, the US is one of the leading powers in these spheres, and US companies, such as Apple, Alphabet, AMD, Intel, Broadcom, Qualcomm and Nvidia, dominate some key digital technologies. The US is keen to protect and preserve its position in cutting-edge technologies, and is taking steps to boost domestic manufacturing. Last year, the US adopted the CHIPS and Science Act of 2022 to strengthen US manufacturing, supply chains, and national security and invest in research and development, science, and technology. From the US perspective, the EU should play a secondary, supportive role in the process of the digital revolution, acting as a source of human talents to be exported to the US and a market for the US technological giants.

Meanwhile, despite many European companies being pushed away by competition and rivalry, some organizations, such as Nokia and Ericsson, still play a significant role in producing equipment for 5G networks. At the same time, Netherlands-based ASML is the world's leading producer of lithography technology, which is fundamental to mass-producing semiconductor chips.

However, Europe faces tough choices as the US accelerates its technological warfare against China, putting additional restrictions on the export of cutting-edge technologies. The US is interested in fully embracing the EU in its efforts to prevent or at least postpone the technological development of China. This policy will not only create more complications for China but will deepen the EU's technological dependence on the US, as the European companies will lose the possibility to increase their competitiveness through partnerships with their Chinese counterparts. One of the tools of this policy was the establishment of the EU-US Trade and Technology Council. The council, a US initiative, was established in June 2021 and is the main forum for the EU and the US to coordinate approaches to critical global trade, economic and technology issues. Meetings have previously been held in Pittsburgh, Paris, and Washington DC, and the fourth meeting took place in Lulea on May 30 to 31 and was hosted by Sweden as holder of the presidency of the Council of the EU.

Europe will have to make a decision soon. Either it will transform into the technological backyard of the US, with less and less Europe-made digital technologies, or, alongside further developing economic cooperation with the US, it will continue its partnership with China on digital technologies. Chinese and EU companies may enrich each other by sharing know-how, while a presence in the Chinese digital market will boost European production. Of course, the EU and China have their differences, and these differences will continue to exist. However, it is up to Europe to choose the path of dialogue with China or join the US in its efforts to contain China. The second scenario will result in a further decline of digital technologies in Europe, which will negatively impact the living standards of Europeans and put an abrupt end to Europe's hopes for strategic autonomy.

The author is the chairman of the Center for Political and Economic Strategic Studies in Yerevan, Armenia. The author contributed this article to China Watch, a think tank powered by China Daily.

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