Friday, 12 August 2011

The week the tectonic plates shifted

Night view from the Peace Hotel, Shanghai
Think for a moment, if you can, beyond the riots. Beyond the slow-burning flames engulfing parts of the Murdoch empire. Beyond the British cuts and the British growth problem, to that delicate balancing of immense forces which is global geopolitics.

And, last week, amongst the domestic news, you saw some truly momentous events. Some momentous in themselves, some merely telling indicators, signifying how far we’ve come incrementally along a historical road.


In 1988, I was in Shanghai, on a trip having just finished university. In 2004, sixteen years on, I was there again. And, the second time, the view across the Huangpu River from the beautiful Art Deco Peace Hotel was a bit different. By my second visit, there was now a wealth of skyscrapers where there had been shanty town.

During those sixteen years, Shanghai had grown into a city of 17 million souls, and its country was well on its way to becoming the world’s largest economy, a feat which most observers reckon it will achieve before 2015. I tell this story simply because I believe that actually visiting Shanghai – or somewhere which has experienced similar growth like the Shenzhen enterprise zone, a little north of Hong Kong – is about the only way you can fully grasp the enormity of the change which has taken place in the world over the last two decades. The other thing that I remember clearly is that everything I bought cost roughly one-tenth of the price back home. It doesn’t take a genius to see why everything is seemingly made in China nowadays, and what a massively disruptive effect that that must perforce have on the economies of Europe and the US.

Last week, we saw three events. The first was the onslaught of the markets against Spanish and Italian debt, only days after EU agreement of a band-aid package to save Greece, punishing European leaders for their lack of will to back a longer-term solution. The second was last-minute breaking of the dollar debt deadlock on Capitol Hill, between Republicans and Democrats, apparently down to the capitulation of President Obama, leading anyway to the first-time-ever downgrade of dollar debt. The leadership vacuum in both cases was palpable, as the Daily Telegraph's John McTernan points out. And the third, most strikingly of all, was China’s unprecedented reprimand to the US over the debt issue.

Extraordinary. China was telling off the world’s only remaining superpower, as if it were a naughty child. I am a big stakeholder in your country, it was saying. I am reminding you that I have arrived and that you need to pay attention.

Two immense trading blocs, unable to resolve their problems in a satisfactory way. And a third, looking on expectantly, knowing that shortly it is to be more powerful – economically, at least – than the US and, eventually, quite probably the EU as well. Irritated with one party because it thought it wasn’t pulling its weight, and probably merely mystified by the machinations of the other, the Europeans seemingly doomed to be entangled in silly regional disputes about languages and sovereignties, while others quietly take control of the world. Not to mention their inherent laziness, all those long holidays and short working hours: how are they ever truly going to be competitive?

I mean, not to condone it: but you can imagine how that might be the view from Beijing.

The US on its knees. Europe in disarray. How a firm, authoritarian hand might help those silly old democracies, they must be musing. (And, by the way, how much longer before that country, currently on a mission to build up its military capacity significantly, makes a move on Taiwan which, unlike the little dance it led the US in 1998, in the end succeeds?)

For those who truly believe that Britain has a future in a Europe only as a loose trading bloc, think again. Europe is likely, in my lifetime, either to achieve some kind of workable political convergence, which is definitively not a super-state; or to have accepted forever a role as a minor-league player next to the US, China and, perhaps, even a renascent Russia in world affairs. An inward-looking Europe, un-consulted and unloved on the great matters of late 21st century geopolitics.

True Europeanism is not for those who dream of a massive statist bureaucracy, as the Tories would have you believe. True Europeanism is simply wanting to fight for European values to endure in a world where the other players will be much bigger than the relatively small individual countries we will be by then. A world where such smaller countries will struggle to be heard.

Or the alternative future: A Europe which didn’t take the opportunity to speak with one voice because it was obsessed with questions of sovereignty and voting. And ended up having no voice at all. Just like Merkel and Sarkozy have a carve-up meeting before a Euro-summit, one day it will be Obama and Hu, or their respective successors, having a cosy dinner before they tell everyone else what’s been agreed.

As Tony Blair put it in A Journey

“Possibly we have not yet internalised the true significance of China’s rise…If Europe wants to be strong, capable of partnering the US, China and others, and also attractive as a partner, it has to focus on certain fundamental decisions.” 
But we are not focusing. We are running away from those decisions, as Merkel and Sarkozy showed over Greece. To get to that alternative future, where we are not a bit-part actor, Europe will have to be a player. And, whether we like it or not, that means that we need to settle our differences with those neighbours with whom, after all, we really have an awful lot in common.

We are at a crossroads, where the choice for our leaders lies between statesmanship and a legacy of dithering and missed opportunities.

The clock is ticking.





This post first published at ProgressOnline

1 comment:

  1. Lessons from history, a contributory factor in WW1 was Germany undercutting the UK. As to the EU I have fallen out of love with it, I once thought the ECHR would save us from Bliar and Camergoon, it has signalled failed to curb the worst excesses of Whitehall.

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