Wind and Wires: China Tests Europe’s Lead in Wind Power and 5G

The rivalry between the United States and China continues to dominate much of the geopolitical conversation, particularly as the two nations continue to vie for the title of global hegemon. At the moment, the two nations are at odds once again as multiple issues collide. Climate change, differing foreign policy regarding Taiwan, and the ongoing war in Ukraine—which the Chinese government has been accused of supporting by not severing ties with Russian leader Vladimir Putin—continue to exacerbate the relationship between two great powers.

 The U.S.-China rivalry has often overshadowed Europe, however, and the role the continent plays—and will continue to play—in the global race to lead in critical and green technologies. While Europe might lag in some new and emerging technologies, several European nations have found success in other critical industries such as wind power and telecommunications.

The Association of Foreign Press Correspondents (AFPC-USA) in partnership with the Hinrich Foundation.

The Association of Foreign Press Correspondents (AFPC-USA) was eager to dive into this matter and learn about European leadership in wind power and 5G technology and the rising challenge from Chinese competition. The educational program, developed in partnership with the Hinrich Foundation, took place on August 11, and was moderated by Patricia Vasconcellos, the U.S. correspondent for Brazilian TV network SBT.

 According to Dr. Luke Patey, a senior researcher at the Danish Institute for International Studies and Lead Senior Research Fellow at the Oxford Institute for Energy Studies, University of Oxford and the author of How China Loses: The Pushback Against China’s Global Ambitions, China’s foreign policy and security agenda undermines its efforts to dominate the global economy by upsetting relations with the West and key states in the Global South such as India. He acknowledges that Europe's competitiveness is often forgotten, particularly in the U.S. debate on its rivalry with China, and that while China might be ahead of the U.S. in some respects, the same cannot necessarily be said in regard to Europe or East Asia.

For Ilaria Mazzocco, a fellow with the Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies (CSIS), it is evident that “we are seeing a lot of growth for Chinese companies,” particularly in regard to 5G and wind power. And when you look at electric vehicles, another area where Chinese companies are leading the way—Mazzocco’s dissertation with Johns Hopkins School of Advanced International Studies (SAIS) investigated Chinese industrial policy by focusing on electric vehicle promotion efforts and the role of local governments—it is clear they are "performing in a remarkable way" considering their lack of an international automotive industry.

Scott Moore, a political scientist, university administrator, and former policymaker whose career focuses on China, sustainability, and emerging technology and who is currently the Director of China Programs and Strategic Initiatives at the University of Pennsylvania, also weighed in, noting that in the last decade, China has increasingly been forced to respond to shared ecological challenges, the COVID-19 pandemic, and technological developments. Moore, who previously worked for the U.S. Department of State, points out that these issues were once viewed as an opportunity that could have formed “a fruitful relationship with China” but have instead taken on a different meaning as China has moved from being seen as a potential stakeholder and more as a competitor as these challenges “have created opportunity for competition.”

The discussion that followed touched on these issues and more. Below, readers will find a summary of the most important takeaways from the presentation.

ON HOW EUROPEAN COMPANIES FACE OFF AGAINST CHINESE COMPETITORS

●      Patey notes that global market shares of the Chinese telecommunication companies Huawei and ZTE have risen considerably over the last 15 years, pointing to coverage in both The Wall Street Journal and The Economist. However, he says that Huawei might be a tech leader but not the tech leader in 5G technology because "Europe's lasting importance is seen in strong market shares and patent essentiality and high licensing revenues.

ON COUNTING CHINA IN (OR OUT) OF THE TECH RACE

●      According to Patey, China should not be counted out of the tech race given that it excels in process innovation that “helps keep costs down” and strong positions in fields such as artificial intelligence, which is crucial to the future management of wind farms.

●      Mazzocco says that in order for China to be more competitive, it needs to take its branding into consideration. For instance, in regard to electric vehicles, it comes down to an issue of familiarity, and marketing, as well as having an established presence in local markets. This also poses a political challenge because traditionally, automakers produce domestically.

●      Moore notes that China's competitive advantage “relies more on the deployment side rather than the development side,” which he acknowledges is more of a generalization than an observation.

ON THE IMPORTANCE OF 5G

●      Patey, over the course of a mini presentation within the presentation, notes that 5G technology allows data to be shared “at much faster speeds and with fewer delays.” It is “a driver for industry” with small 5G networks rolling out in China, South Korea, the U.S., and in Europe for industrial purposes. By the end of the decade, we will see it affect our daily lives to a greater extent as it enhances technology such as remote health, smart cities, automated driving.

●      But on that note, because of “the interconnectedness 5G will be driving,” it does matter who the developers of these advancements are, and whether frequent software updates can be trusted and screened. This has become a security issue and the debate about economic and security benefits versus risks continues.

ON HOW SUPPLY CHAINS MIGHT EVOLVE

●      Supply chains “have increasingly become a political concern,” says Mazzocco, because of concerns about increasing industrial policy. “local governments are often more concerned about jobs than they are with potentially big national security issues,” she observes. And while local governments might seek foreign investment, “there may be concerns in the future about whether that's the the type of investment we want.” Ultimately, that is “hard to reconcile,” she adds, “and there will be more conflict in regard to how this discourse proceeds.”

●      Mazzocco notes that many supply chains run through China, so it is challenging to conceive supply chains that are completely free of China. Moreover,  a lot of technologies come from globalized supply chains (and China is by no means less vulnerable).

ON THE FUTURE

●      Moore says that how China and the U.S. respond to pressing existential issues like climate change is bound to become more fraught, especially in light of the fact that the Chinese government recently announced it would suspend all bilateral dialogue on climate change in response to House Speaker Nancy Pelosi’s (D-Calif.) recent visit to Taiwan.

●      “What we risk getting wrong,” he says, is not paying attention to the need for cooperation in the technology realm, especially when there exists a "tremendous need for multilateral dialogue on the rules of the road.” He acknowledges that there is some scope for economic competition when it comes to clean technology development.

●      The recent passage of the Inflation Reduction Act (IRA) has generated conversation in part because it was crafted to make the U.S. more competitive with China, according to President Joe Biden. However, most economists don’t believe it will reduce inflation at all.

●      In effect, the legislation would accelerate the adoption of renewable energy initiatives by creating financial incentives for businesses and helping the U.S. curb emissions significantly, a step toward “a more sustainable world.”