The speed at which the Chinese narrative is reversing surprises many people; but the truth is that reality always speaks louder, and the economy is once again taking precedence over ideological excesses. Pragmatism is one of the core elements of the political culture of the Middle Kingdom, and the numbers are what they are. The financial bazooka, approved in the last quarter of last year, is not, after all, intended to stimulate the economy; but rather to save the banks from the Gordian knot of the real estate bubble: state-owned construction companies, mired in debt to state-owned banks, were on the brink of collapse with loans that public servants could not repay. In essence, there was no one left to execute.
The decline in consumer indexes is evident, and the terror of deflation is at the door, accompanied by the devaluation of the currency. The solution is to promote domestic consumption; double down on new productive forces; and on the green economy. However, at this point, the multiplying crisis measures are proving insufficient for China’s economic recovery, both in the short and medium term. The only remaining option is global trade, and an opening to the outside world has now been openly adopted as a unilateral stance, although the reaction to the West is, at best, ambiguous.
In this context, special economic regions—especially the autonomous regions—gain disproportionate importance when compared to the political depreciation the Second System suffered at the hands of the First, in the last decade. After all, they are the legal, social, and cultural showcases for the effort to recover external relations, which have been inescapably shaken; first by muscular and nationalist rhetoric; then by the COVID policy; and finally by the strategic alliance with Putin on the eve of the invasion of Ukraine. Beijing is now backing down and openly acknowledges the need to attract foreign investment and recover global markets. The crisis is undeniable, as proven by the conclusions of the national conference on trade work held last weekend in Beijing (see page 14).
In the United States, Vice President Elon Musk, a never-before-seen type of autocratic billionaire, has the worst record on multilateralism and global trade since World War II. Europe vacillates between governments that resist defending liberal democracy and others that yield to nationalist protectionism. And it will have to bear expenses once considered unthinkable in the construction of a defense strategy less dependent on NATO and the military dollar. One might say: Merkel, come back, you’re forgiven. When the former German chancellor explained that the future was in the East because, with Trump in Washington, the European project was impossible, she was right ahead of her time. She didn’t foresee the war in Ukraine; for that reason, she was vilified later. But no one could have predicted that Trump’s return would be even worse, handed over to a digital oligarchy that cares nothing about the State, much less the relationship between them.
I have long argued that, sooner or later, Europe would need to reassess its relationship with China. And this is the moment. China needs it, but so does Europe; there’s no time for revenge, but for reconciliation. The world cannot be held hostage by the Trump-Musk duo and their project of bankrupting the Nation-State, which will have Europe as its main target. The world’s largest producer and the largest consumer market have a common interest: to fight the venal madness unleashed in Washington. Brussels and Beijing defend different regimes and have very distinct visions of the world—it’s true—but they certainly understand that leaving the messianic empire unchecked is to fall to its knees on a ground that serves no one’s interests.
