The world is not flat, but sometimes a mirror image of itself. What the western thinks, feels and does in its western world is also thought, felt and done in the opposite hemisphere with different signs.
“De-risking, yes. De-coupling, no,” said Chancellor Scholz at the government consultations with ministers from China. But that was just echoing what they say in the White House. With this chant, the politicians in the West convey the impression that they are the drivers of history. But nowhere is the dream of greater self-sufficiency more fervent than in Beijing. The British historian Harold James has understood the dialectic of the process: “The decoupling discourse has resulted in a yo-yo effect, in which both the USA and China are trying to break away from the other”.
For many entrepreneurs, association presidents and also the economics minister, it is astounding to learn how far the Communist Party has progressed with its China First policy. The idea of economic self-sufficiency was evident there, even before Donald Trump put de-coupling on the agenda. A world with two fixed stars is emerging before our eyes – cultural, economic and military. The six-step process of detachment is as follows this morning.
China’s six-step disengagement process
1. The Golden Shield – the so-called Golden Shield Project – is a project of the Chinese Ministry of State Security, which operates its own Internet for China. It is about creating an autonomous communication and transaction platform. The digital traffic of goods, money and information should be shielded from the West. The development of the Golden Shield started in 1998 and in 2003 it was put into operation.
2. It is also about creating and defending a perception of reality isolated from the West. American and European URL addresses and their servers are identified and rejected. A digital wall is thus running through the global village, in which different spheres of the public sphere are developing. It is a kind of general censorship of Western ideas.
Nationalization of value chains
3. State legislation obliges Chinese companies to nationalize their value chains. The Guangzhou Automobile Group, a state-owned electric vehicle maker, said in February that it intends to source all of the 1,000 or so chips in its vehicles from Chinese suppliers. The company still buys 90 percent of its chips from overseas.
In authorities and state-owned companies, all foreign IT technology will have been replaced by domestic ones by 2022. “Two technospheres” were created, says Sebastian Heilmann, Professor of Chinese Politics and Economics at the University of Trier: “It’s a question of parallel globalization, where a new globalization is pushed underneath the western one.”
4. Since 2015, China has developed its own payment system called the Cross-Border Inter-Bank Payments System, or CIPS for short. As a result of the Russian war of aggression and the exclusion of Russian banks from the SWIFT system, the Chinese equivalent has now grown to almost 1,500 participating banks.
In the past year alone, the daily transaction volume increased by a third, according to their own statements, with a total of around 14 trillion US dollars processed by CIPS in 2022. This is intended to break the dollar’s dominance in its own hemisphere.
Opening up the geographic south
5. The development of the geographic south for China is of particular importance. China has overtaken the West as the largest direct investor on the African continent since 2012 – it invests four billion dollars there every year. At the same time, it establishes its own standards for infrastructure, hardware and software products, and also the Golden Shield Internet.
China has set up 25 economic and trade cooperation zones in 16 African countries. McKinsey estimates that 12 percent of African industrial production – worth a total of about $500 billion a year – is already handled by Chinese companies.
6. What began in the economy continues in the military. The country is currently planning to build a military base with and on Cuba. The facility is said to be part of an initiative by the People’s Liberation Army of China to build a global network of military outposts. And also represents a response to the USA’s relations with Taiwan. The biblical motto applies: as you do to me, so I to you.
Reorganize relations with China
Conclusion: Companies that do not want to disappear into the black hole between these parallel universes have to reorganize their relationships with the Middle Kingdom.
The pharmaceutical manufacturer AstraZeneca is discussing internally to bundle its China activities in a separate share and to place it on the Hong Kong stock exchange. If one day the interface between the worlds is on fire, you don’t want to burn up in economic no man’s land.
Vice CEO and President of the Chinese entity, Wang Lei, said in May on the occasion of the pharmaceutical manufacturer’s 30th anniversary in China that AstraZeneca wants to develop into a patriotic company in China that “loves the Communist Party and the country”. Living and surviving in the age of parallel worlds: This is what opportunists look like – or pioneers.