[Text/Observer Network Liu Bai]
"Chinese enterprises have caught up with European competitors, and even surpassed them in some areas, putting the EU on the defensive." On the occasion of the 50th anniversary of the establishment of diplomatic relations between China and the EU, the South China Morning Post, an English-language media in Hong Kong, published an article on September 28th, exploring how China has grown from a technological laggard to a global innovation power in the past half century.
Analysts pointed out that in the field of technology, China has turned from past students to EU teachers, no one will question China's innovation power, but the EU still has some areas worth studying in China, and China's technology and supply chain are highly interdependent, disconnected is unrealistic, and in the future should pursue orderly competition and cooperation.
The article suggests that the EU should not blindly criticize China's industrial policy, but should accelerate reform and innovation, develop cutting-edge technologies, draw on China's technology-powered strategies, and at the same time increase its competitiveness by attracting Chinese capital, technology transfer, and innovative ecological construction, not just defense measures.
From "Student" to "Teacher": The Reversal of China-Europe Technological Landscape
The article mentioned that in the late 1970s, China was about to start reform and opening up. At that time, China sent a heavyweight delegation to embark on a 36-day inspection tour to Western Europe. They visited 25 cities in five countries, including France and Germany, and visited dozens of factories, mines, ports, farms, universities and scientific research institutions.
Judging from the results of the investigation, Chinese delegates judged that China was at least 20 years behind in science, technology and industry, and even the overall modernization level.
The survey also indicated the direction for China's development: the path to the next stage of economic development will be paved by science and technology, expanding trade and economic system reforms.
Fast forward to today, China has got rid of its dependence on western technology in many fields and climbed to an innovative power in the global value chain.
Today, when China and Europe celebrate the 50th anniversary of the establishment of trade, Europe is in a defensive gesture, thinking about how to catch up, and bilateral relations are also affected by trade friction.
Analysts say that technology competition will only become more intense, but not necessarily a zero-sum game.Some European companies are taking advantage of China's "technology transfer" strategy and striving to stand up in competition.
For decades, the “deal” model between the two sides has been very simple: China covers market access in exchange for Western technology from European companies.
At first, the flow of technology was basically one-way. However, Ding Chun, director of the Center for European Studies at Fudan University, pointed out that this flow began to reverse later.
"In the past, Europe was a teacher and China was a student," Ding Chun said. "But now students have surpassed teachers in many fields. This change has caused anxiety and worry in Europe, which is understandable."
According to the article, the reversal of this pattern began around 2001. China's accession to the WTO accelerated the opening up to foreign investment and forced Chinese enterprises to speed up the pace of catching up.
Tim Rühlig, senior analyst at the European Security Institute, said European companies seem to underestimate the innovation capabilities of Chinese counterparts.
"For a long time, they thought that China would only catch up by imitating western technology. But now, no one will question China's innovation," he said. "The complementarity between China and Europe has weakened, and instead, they compete in similar market segments. This is one of the reasons why China-EU relations are becoming more and more complicated now."
Liuqi said that the technology and innovation ecosystem of both sides also intertwined through the deep supply chain, forming mutual and complex dependencies and to understand the current situation, we must analyze in depth at the level of detail. "
However, he noted that Europe remains a leader in many fields, and China still has a lot to learn from. EU companies are still leading in high-end manufacturing, mechanical engineering, aerospace, robotics, precision instruments, industrial software, advanced semiconductor equipment, medicine, nuclear technology and basic science.
Deng believes that as the United States restricts China’s access to its domestic technological achievements, these European companies as “technological sources” are becoming more important to China.
However, the pace of innovation in Europe has slowed somewhat, lagging behind the rapid growth of China and the United States.
“China has made rapid progress through learning, digestion and innovation, while Europe’s ‘pioneering advantage’ in traditional industries has turned into a relative disadvantage,” he said.
Ding Chun said that Europe pays too much attention to traditional industries such as automobiles, machinery, chemicals and electronics, but does not pay enough attention to cutting-edge technologies such as artificial intelligence and information technology. At the same time, China continues to advance in the fields of artificial intelligence, digital economy, telecommunications, renewable energy, photovoltaics, lithium batteries, electric vehicles, drones, quantum computing and supercomputers.
Javier Borràs Arumí, a researcher at the Barcelona Center for International Affairs, a Spanish think tank, said that within the EU, a sentiment that "Europe has missed opportunities and been left behind" is spreading.
"The prevailing sentiment is pessimism and stagnation," he said.
However, Alicia Garcia-Herrero, chief economist of the Asia-Pacific region of the French Foreign Trade Bank, believes that the core problem facing the EU is not "technology itself", but its dependence on China's highly developed industrial capacity.
“It is the technology and industrial capacity of industrial products that makes it almost impossible for the EU to avoid China.
The EU claims that China has gained this industrial strength through state subsidies and formed an unfair competitive advantage, especially in industries such as electric vehicles and photovoltaics, resulting in overcapacity and exports to other countries at below cost prices. However, China has repeatedly refuted this statement.
Bolas said the EU’s view of China’s technology has basically shifted to “preoccupations” and fears its economy, security and values are threatened.
"The EU's attitude towards Chinese technology is basically defensive, and we have to protect ourselves from it. This is also deeply influenced by pressure from the United States, such as demanding to ban certain Chinese technologies."
Analysts point out that European companies and policymakers reacted too slowly to recognize that China has become an innovative industrial powerhouse and failed to respond to challenges in a timely manner.
“It took years for the European business community to realize that China has become a major competitor from a major customer,” said Daniel Hamilton, a senior researcher at the Johns Hopkins Institute for Foreign Policy Research, “and at a time of European hesitation, China has narrowed the gap.”
Ding said that the competition will only become more intense, and criticizing China's industrial policies will not help Europe catch up.
He believes that if Europe feels “overtaken by the students of the past,” the wise approach should be to accelerate reform and innovation rather than take defensive measures.
The EU’s Strength and Strength: Seeking a New Balance for Cooperative Competition
In his view, the EU is facing a “cooperative-competitive challenge” and is trying to find a balance between security and competitiveness.
"If certain Chinese technologies or companies are blocked from entering, the EU will lose the price and efficiency advantages they provide, thus damaging its own competitiveness."
"Prioritizing security or geopolitics necessarily comes at the expense of efficiency, and that trade-off isn't going away."