Sovereignty is not a whimsical matter or one of political ideologies; it is a measure of survival
The European Union is at a decisive moment in its history, and member countries must think individually and collectively about the economic future they want. With the European elections in the background, the volatility of the markets and doubts about the sustainability of the current economic model, we urgently need to face a strategy as a continent.
We have great investment opportunities in Europe. However, we remain anchored in the economy of products and services, when the next challenge to be faced imminently is knowledge economy. In fact, we are late in comparison to the great powers. When I talk to my co-investors and partners, we agree that the future is there, in knowledge: biotechnology, decarbonization of the economy, new materials, new energy sources, etc.
If we analyse it from the point of view of intellectual property, China has already surpassed the United States in the number of patents registered in 2022 and 2023, according to data from the World Intellectual Property Organization (WIPO). In those two years, the Asian giant filed 139,627 patents, while the United States registered 114,510. In fact, China makes 46% of the world’s patent applications; USA makes 17%; Japan 8%; Korea 7%; and Europe 5.6%. These figures invite us to think carefully about the power of the Chinese economy.
In the 80s, in Europe, we designed and produced in China because it was cheaper. 40 years later, we have become what China represented at that time. It sounds paradoxical, but all you have to do is review the latest Chinese investments in Europe and Spain. As an example, we can cite the agreement between Chery and the Spanish company Ebro to manufacture cars in Barcelona, in the former Nissan plant. The figures are striking: an investment of 400 million and, between now and 2029, 150.000 cars will be made at a rate of 50.000 assemblies.
Europe is a strategic objective for China, since it represents a large potential market. At the same time, they are interested in our technological innovations because they want to improve their productivity even more. And, on the other hand, we represent an ally to counteract American influence.
However, economic output is not the only thing China has set its sights on. It is also gaining ground by leaps and bounds in infrastructure, technology and energy, thus increasing its influence in the European market. They have also not forgotten the health, consumer products and information and communication technologies sectors.
Europe is not China’s only target. Over the past two decades, the Asian giant has deployed an aggressive investment strategy in Africa, acquiring vast tracts of arable land and financing essential infrastructure such as communication, transportation and energy networks. This has also raised serious concerns about growing Chinese influence and its impact on the sovereignty of recipient countries.
The African experience offers a valuable lesson for Europe, which must be aware of the potential risks when opening its doors to foreign investment in strategic sectors. China’s growing presence in Africa has raised questions about the possibility that the Asian giant is using its economic superiority to exert control over key resources and gain geopolitical advantages.
We must also reflect on the trap that the investment has entailed, since in many cases it has ended in a significant debt for Africa. For two decades, the flow of Chinese capital to the African continent has allowed the construction of large infrastructures, which have put the country in debt. According to Debt Justice figures, Africa’s debt to China was $83 billion in 2020. Europe, with its own vulnerabilities in sectors such as technology, energy and infrastructure, must carefully analyze the Chinese model and establish solid mechanisms to protect its economic and technological sovereignty. The search for foreign investment should not translate into a transfer of control
Sovereignty is necessary
Europe needs to recover its sovereignty in different areas, such as energy or food, to stop depending on other countries. We all have in mind how, as a result of the conflict between Russia and Ukraine, the price of energy rose radically.
If we analyse Europe’s energy dependence, we find that Russia is the largest supplier of natural gas, with key gas pipelines such as Nord Stream and TurkStream. In addition, it supplies us with a significant amount of crude oil and coal. It is not the only country, since we also depend on the Middle East, Africa and America.
This same conflict has severely affected European agriculture, as both countries are responsible for around 30% of global wheat exports and a significant portion of corn and barley. The interruption of these exports has caused a price increase, with wheat reaching a 50% increase in 2022. In addition, the costs of fertilizers, of which Russia and Belarus are large suppliers, increased significantly, raising agricultural production costs. in Europe. Fuel shortages and high prices have also increased operating costs for farmers, exacerbating the food crisis in the region.
For all these reasons, sovereignty is not a whimsical issue or a matter of political ideologies, but rather it is a measure of survival. By recovering sovereignty, we will strengthen Europe’s position and image in the world, with a single voice. European interests are also looked after in different sectors such as politics, security and, of course, the economy. In addition, it will allow us to reduce dependence on third countries, and situations such as the aforementioned would decrease.
If we compare China again with Europe in the food sector, we see how inflation has hit us both, but not in the same way. In May 2022, food inflation increased by 12.1% compared to the same period last year. That same year, in the Asian country, it was more moderate, with increases of 4.8% in December and 6.1% in August, compared to the same period the previous year.
In the face of global economic and geopolitical changes, it is evident that Europe needs a comprehensive strategy as a continent, addressing food, agricultural and energy sovereignty.
Greater investment in infrastructure will also be needed: a mix of private and public capital in order to improve the efficiency and resilience of our food and energy system. In 2022, the European Union committed to investing €1.2 billion in infrastructure for the transportation of food and energy, thereby strengthening the supply chain and ensuring continued access to essential resources.
However, if there is no commitment to European R&D, private investment will leave our borders in search of progress and profitability. The dog chasing its tail. Last but not least, high doses of solidarity and cooperation among countries will be necessary to draw a new future for Europe: a more competitive, profitable and sovereign one.
