Temas de relações internacionais, de política externa e de diplomacia brasileira, com ênfase em políticas econômicas, em viagens, livros e cultura em geral. Um quilombo de resistência intelectual em defesa da racionalidade, da inteligência e das liberdades democráticas.
O que é este blog?
Este blog trata basicamente de ideias, se possível inteligentes, para pessoas inteligentes. Ele também se ocupa de ideias aplicadas à política, em especial à política econômica. Ele constitui uma tentativa de manter um pensamento crítico e independente sobre livros, sobre questões culturais em geral, focando numa discussão bem informada sobre temas de relações internacionais e de política externa do Brasil. Para meus livros e ensaios ver o website: www.pralmeida.org. Para a maior parte de meus textos, ver minha página na plataforma Academia.edu, link: https://itamaraty.academia.edu/PauloRobertodeAlmeida;
A China não é a URSS, com o que esse jornalista concorda. Mas ele esquece de mencionar que os EUA entram nessa "guerra" numa defensiva, o que é a pior postura que pode ter um país. Paulo Roberto de Almeida
The 21st Century Cold War
Talk of a new Cold War is becoming ever more pervasive. In its 21st century rendition, it is China, not Russia, that is in the U.S.’s crosshairs.
Talk of a new Cold War is becoming ever more pervasive. However, in its 21st century rendition, it is China, not Russia, that is in the U.S.’s — not just the Trump Administration’s — crosshairs.
Godless people
As it is turns out, China, still ruled by the same old communist party as at the time of Chairman Mao, is a perfect candidate for a new Cold War.
After all, it fits the template of the old conflict between democracy and godless communism.
China: As if the Soviet vision had actually worked
True enough, today’s China is quite different from the erstwhile Soviet Union. On the economic front, it is communist in name only (“CINO”).
In fact, Marx, Lenin and Mao must be busily spinning in their graves. At the time of Mao’s death less half century ago, pretty much everyone in China still wore identical Mao jackets and hats.
Plus, people aspired to no bigger worldly possessions than a bicycle. Now, the country has nearly 400 billionaires. That puts it second only to that citadel of imperialism, the United States.
Another leader for life
But don’t worry. In many other ways, China’s Xi Jinping proves himself a worthy heir to the communist leaders of the past. Like almost all Communists of yesteryear, Xi is planning to rule his country for life.
Under his leadership, the Chinese government is also becoming a “masterful” (i.e., unflinching) repressor of dissent at home and seeks to put an end to freedoms in Hong Kong.
China’s CCP government censors the internet the same way the Soviets used to jam Western radio broadcasts. It is needlessly secretive, leading most recently to widespread condemnation of its handling of the COVID 19 outbreak.
It ain’t the good old U.S. anymore, either
Of course, the United States is now a very different country, too. During the early post-World War II decades, it could very effectively counter Soviet claims of building a workers’ paradise.
The United States actually had what the Soviet Union always only claimed — strong wages, stable jobs and comfortable lifestyles of its unionized blue-collar workforce.
These days, American unions are in shambles and Americans without a college degree, like true proletarians in the Marxist sense, struggle to make ends meet with no benefits or job security.
Soviet-style leadership at the White House
In the old days, the United States could brag about its fourth estate — the highly respected and even feared free press, reporting the truth and “All the News That’s Fit to Print,” in contrast to communist propaganda hacks.
At least for another five months, the United States has a president who attacks the country’s largest news organizations as purveyors of fake news. And he knows no limits in channeling his inner Uncle Joe Stalin by calling journalists “enemies of the people.”
Of course, sending out the U.S. military on peaceful American protesters — on the anniversary of the Tiananmen Square massacre no less — surely didn’t make for good propaganda material either.
Painful role reversal
But this is only half the problem. The truth is that the roles of the Cold Warrior sides have been reversed. During Cold War I, the Soviet Union was always a sullen bully with a giant chip on its shoulder, claiming to be the victim of capitalist machinations.
Washington, on the other hand, played the adult to Moscow’s teenager. It often yielded to Russia’s unreasonable demands — because the United States was so strong that it could afford to be magnanimous.
The Soviets always threatened aplenty, almost always without following through and thus appeared weak. Meanwhile, the U.S. side worked to engage them and to find the common ground.
Who is the mature power now?
In today’s rendition of the Cold War, with Donald Trump in the White House, it is stunningly often Beijing that is playing the adult to America’s whining, bad-tempered and very short-sighted teenager.
Donald Trump is always ready to complain how China, the bad guy, takes advantage of poor and weak America, whether on trade, technology or now the coronavirus.
China, meanwhile, is working to diffuse tensions. Most recently, when Donald Trump threatened to exclude Chinese airlines from flying to the United States, Chinese officials simply lifted pandemic-related restrictions on foreign flights to China, depriving the Trump Administration of a chance to escalate the conflict.
Trump, the “shoe banger”
During the Cold War, it was the then-Soviet leader Nikita Khrushchev who, when angered by something during his speech at the United Nations, took off his shoes and started banging it on the desk.
Today, it is Trump, not Xi, who’s more likely to engage in such a stunt.
Conclusion
The first Cold War was won by the stronger, adult player — meaning at the time the United States.
Whatever we may think of China and the distasteful ways in which it oppresses its own people, we must recognize that, at least for now, it is China that acts like the adult in the room.
That is not a good omen as to the outcome of the second Cold War.
Trump reforça sua ofensiva contra a China, com propósitos eleitorais, mas as medidas vão redundar em grave prejuízo para os EUA e para as empresas e consumidores americanos, como já amplamente demonstrado pelas salvaguardas abusivas e ilegais dos três anos passados.
A China consentiu com um acordo de compensações apresentado como uma vitória (tática) americana, quando é uma patente derrota estratégica.
Os EUA já entram derrotados nessa disputa, pois assumem uma postura claramente defensiva e de retaguarda.
Já perderam, agora e no futuro previsível.
Essa derrota se deve inteiramente à estupidez de Trump e de seus assessores imediatos.
Não há como não ficar estupefato com a passividade das classes dominantes, da complacência do establishment, da miopia dos supostos wisest and brightest, que não conseguem ver como os EUA estão cavando sua própria cova, ao rejeitar a necessária e lógica complementaridade entre as duas grandes economias.
Os EUA se isolam, recuam para uma fatal introversão, e ainda fazem pressão sobre parceiros dubitativos para que estes os sigam na burrice. Fazem chantagem em torno do caso da Huawei, mentem como já mentiram no caso do Iraque, e pretendem ser líderes a partir dessa postura defensiva e chantagista. Vão perder.
Parece incrível, mas os impérios mais poderosos podem ruir pela incompetência e estupidez de imperadores ineptos; os impérios romano e otomano são uma prova de que isso pode ocorrer pela má qualidade de suas elites. A Argentina e o próprio Império do Meio constituem provas adicionais da possível derrocada.
A China já venceu porque possui a estratégia correta, a da abertura para a globalização, a do livre comércio e a dos mercados abertos, com o Estado fazendo o seu papel na infraestrutura, no ambiente de negócios, no mercado de capitais, nos acordos internacionais.
A decadência da Grã-Bretanha pré-Thatcher deveria fornecer um claro exemplo sobre o quê NÃO fazer, mas parece que não aprenderam nada.
Quanto ao Brasil, não precisamos ir muito longe, pois temos aqui ao lado uma prova viva de como afundar um país.
O Brasil atual, com seu dirigentes estúpidos e subservientes a Trump — mais até do que aos EUA — pode ser o próximo exemplo de uma decadência made at home, autofabricada.
A China conseguiu eliminar a pobreza? Uma visão abrangente do gigante asiático Paulo Roberto de Almeida Em 2015, o atual imperador chinês havia prometido que a pobreza seria completamente eliminada do país em 2020. Não sabemos ainda se esse objetivo foi alcançado, em função da pandemia. Mas, o volume de pessoas vivendo na miséria é absolutamente inexpressivo e o índice de pobreza é propriamente residual. Ela está destinada a ser eliminada, bem mais pelo sistema de mercado do que pela via de ações do Estado. Este sempre foi relevante no caso da China, inclusive por ter sido “moderno” séculos antes que ocorresse tal processo no Ocidente. Quando na Europa tribos bárbaras ainda se deslocavam de um lugar a outro e senhores “feudais” guerreavam entre si, a China já dispunha de um “Estado weberiano”, com seus burocratas recrutados pelo mérito dos concursos para mandarins (em diversos níveis). A China é um caso extraordinário de transformação econômica, jamais visto na história da Humanidade. Nunca houve, na história econômica mundial, nem nunca mais haverá, mudança tão impactante socialmente, alcançando centenas de milhões de pessoas, em prazo tão curto de tempo: pouco mais de uma geração. O fato de ser uma autocracia pode ter ajudado na tarefa, mas a China sempre foi autoritária, totalitária, tirânica, ditatorial, despótica, segundo as épocas, mas os despotismos anteriores nunca tinham conseguido, se por acaso tentaram (o que nunca parecer ter sido o caso) retirar a grande maioria da população de uma miséria ancestral, estrutural. Cabe registrar que a China tradicional também sempre contou com governos burocraticamente organizados e, sobretudo, com uma grande cultura, em geral sofisticada, e acima de tudo, uma extraordinária energia de seu povo, para sobreviver e progredir, contra ventos e marés, nos bons e maus momentos. As questões da democracia e dos direitos humanos são relevantes, tanto do nosso ponto de vista (isto é, ocidental), quanto universalmente, mas não podem ser colocadas nos mesmos termos evolutivos e civilizatórios com que se analisa a trajetória do Ocidente desde a herança clássica, no mundo greco-romano (inclusive o cristianismo), realidades que foram e são muito diferentes em outros complexos societais. Isto não vale apenas para a China, mas para o Oriente como um todo, inclusive Oriente Médio e norte da África, e toda a África Sub-saariana. No caso da China, o fato de que essa trajetória de sucesso econômico e social tenha sido realizada sob o domínio do Partido Comunista pode ser importante, mas não deve ser considerado como absolutamente essencial no plano do desenvolvimento civilizatório do povo chinês, por dois motivos básicos: (a) o “comunismo” como um todo é um período de tempo relativamente curto (70 anos até aqui) para os padrões evolutivos da cultura e da sociedade chinesas, e mesmo sua forma “demencial”, sob o maoísmo, foi mais curto ainda; (b) o “comunismo” da era Deng (que se prolonga até a ascensão de Xi Jinping) foi mais burocrático no sentido weberiano do que ao estilo bolchevique do “centralismo democrático” leninista-stalinista, e os membros do PCC reproduzem em grande medida a trajetória de carreira dos antigos mandarins, ou seja, mérito, dedicação e competência em tarefas administrativas. Se a China conseguiu ou não eliminar a pobreza como prometido pelo atual imperador (mas funcionando num regime “constitucional” relativamente estável), é algo a ser estabelecido proximamente. Mas algumas coisas já são certas, e prometem perdurar pelo resto deste século: trata-se da maior economia do planeta, da nação mais importante no contexto do sistema de comércio multilateral, o maior investidor do mundo prospectivamente, uma economia de mercado sofisticada no plano global (a despeito do papel crucial do Estado em diversas áreas, mas todas tendentes a criar um bom ambiente de negócios para “capitalistas” e empreendedores, de modo geral), uma possível iniciadora de nova revolução monetária (já tendo inventado o papel-moeda séculos atrás) e, concorrentemente com outras nações avançadas, a China passa a ser, crescentemente (depois de ter copiado e pirateado marcas e produtos estrangeiros durante poucas décadas), uma das grandes contribuidoras líquidas ao estoque mundial de produção científica e avanços tecnológicos, com volumes progressivamente maiores de inovações proprietárias e exclusivas. Assim como o século XIX foi dominado por padrões europeus de transformação tecnológica, e consequentes normas industriais, e o século XX o foi por padrões americanos (adicionalmente aos europeus), o século XXI deve receber imensas contribuições chinesas, no bojo das próximas revoluções industriais, a da nanotecnologia, da inteligência artificial, da energia renovável e TICs. Mais um motivo para o Brasil preservar sua autonomia de escolhas, uma vez que continuaremos a estar submetidos a novas formas de dependência no futuro previsível (esperando que não seja apenas dos EUA, por trumpismo doentio e equivocado dos atuais dirigentes ineptos). O século XXI não será exclusivamente chinês, assim como os dois anteriores não foram exclusivamente europeu ou americano, mas ele será determinantemente chinês e asiático, no sentido weberiano e wallersteiniano do conceito de Weltwirtschaft, a economia-mundo que se constroi deste Colombo e Fernão de Magalhães, 500 anos atrás, o que aliás remete igualmente a Braudel, em sua visão macrohistórica. Ao cumprir sua missão histórica como a maior economia de mercado no século XXI, a China vai contribuir poderosamente para retirar de uma miséria ancestral vários povos da África, da Ásia do Sul e alguns da América Latina. Esta é uma visão otimista sobre o futuro da Humanidade sob o “século chinês”, independentemente da conformação política de todas as nações e Estados atualmente existentes no cenário onusiano (que deve perdurar, mesmo na preeminência persistente da atual configuração de Estados-nacionais soberanos), que nada mais é do que um prolongamento do modelo estatal westfaliano. Mas, se ouso terminar de modo pessimista (que eu diria apenas realista), creio antecipar que o Brasil demorará a maior parte deste século para eliminar a sua miséria social residual e para superar completamente o estado de pobreza de boa parte de sua população. Isto não se deve a nenhuma fatalidade do sistema internacional ou a problemas exógenos, ou ainda a fantasmagorias de intelectuais alienados (que insistem ainda na “ação perversa” de uma ideologia capitalista supostamente baseada na desigualdade estrutural de um pretenso “sistema”), mas inteiramente à miséria intelectual e à mediocridade egoista de suas elites dirigentes. Espero estar errado nesta minha última “previsão”. Paulo Roberto de Almeida Brasília, 18/07/2020
Sobre a China, seu progresso material e a ditadura do Partido Comunista Paulo Roberto de Almeida Se a China, em lugar de ser uma ditadura comunista, fosse uma ditadura de direita, talvez houvesse menos pressão sobre ela, com chances de perder outras coisas que não apenas o lucro empresarial. O Brasil da era do milagre, por exemplo, atravessou um dos períodos autoritários mais sombrios de nossa história, com, torturas, assassinatos, desaparecimentos. E nunca deixou de receber vultosos investimentos estrangeiros.
O novo despotismo oriental já não se fundamenta no luxo ostentatório do soberano absoluto, erguido sobre a miséria dos camponeses controlados pela chusma de mandarins fieis ao despota (mas nem sempre).
Agora, o regime autocrático busca o “desenvolvimento socioeconômico, lutando para construir uma sociedade moderamente próspera em todos os aspectos, e erradicando a pobreza”. Trata-se de algo extraordinário na história da Humanidade.
Para alcançar essa finalidade, “a China vai implementar de maneira abrangente grandes políticas e medidas destinadas a assegurar as seis prioridades do emprego, os padrões de vida da população, o desenvolvimento das entidades de mercado, segurança alimentar e energética, o funcionamento estável das cadeias industriais e de suprimentos ao nível das comunidades.”
Finalmente, ela “também está fazendo esforços para assegurar estabilidade nas seis áreas do emprego, das finanças, comércio exterior, investimentos estrangeiros e domésticos e as expectativas dos mercados”.
Estes são os grandes objetivos do despotismo oriental contemporâneo, fundado na prosperidade do povo, na boa conduta dos mandarins e na benevolência do novo imperador, não absoluto, mas dispondo de amplos poderes, limitados apenas por sua competência em entregar o que promete. Trata-se de um excelente programa de governo, mas que não contempla pontos essenciais de qualquer regime democrático moderno. Seria suportável no Ocidente? Provavelmente não. Mas a China nunca conheceu um regime democrático. E várias “democracias burguesas” do Ocidente — Itália, Alemanha, Brasil, Argentina — caíram eventualmente sob o tacão de ferro de ditaduras de direita, civis ou militares, que não entregaram nem a metade do que a autocracia chinesa está entregando ao seu povo.
O problema de muitas análises ocidentais sobre a China é o fato de pretenderem que ela seja algo que ela nunca foi, uma democracia competitiva, modelo sob o qual elas tendem a examinar o gigante asiático. Elas não veem que se trata de uma das maiores democracias estritamente de mercado do mundo, sem o componente político das liberdades democráticas justamente. Isso virá, um dia, e a China premiará o mundo, democrático e menos democrático (como os paises em desenvolvimento), com altas doses de prosperidade e bem-estar com base em mercados competitivos.
Paulo Roberto de Almeida
Brasília, 17 de julho de 2020
Xi hails execs' faith in growth, pledges reform
China Daily, July 17, 2020
China will expand opening-up, improve business environment, president says
China will keep deepening reform and expanding opening-up and provide a better business environment for the investment and business development of Chinese and foreign enterprises, President Xi Jinping said in a letter of reply to representatives of Global CEO Council members.
In the letter dated on Wednesday, Xi assured the global CEOs that China will foster new opportunities and create new prospects for Chinese and foreign enterprises. He said that those CEOs have made the right choice to stay rooted in China.
Saying the interests of all countries are highly integrated in today's world and humanity is a community with a shared future, Xi said win-win cooperation conforms with the trend of the times.
China unswervingly commits itself to pursuing the path of peaceful development, making economic globalization more open, inclusive, balanced and beneficial to all, and promoting the building of an open world economy, the president noted.
Xi expressed hope that those CEOs will adhere to the principle of win-win cooperation and common development, strengthen exchanges and cooperation with Chinese companies, and contribute to the world economic recovery.
Speaking of China's economy amid the COVID-19 pandemic, Xi said the fundamentals of China's long-term sound economic growth remain unchanged and will not change.
China is coordinating efforts in dealing with the COVID-19 pandemic and socioeconomic development, striving for a decisive victory in building a moderately prosperous society in all respects and eradicating poverty, he said.
To this end, Xi said, China will comprehensively implement major policies and measures aimed at ensuring the six priorities of employment, people's livelihoods, development of market entities, food and energy security, stable operation of industrial and supply chains, and smooth functioning at the community level.
It is also making efforts to ensure stability in the six areas of employment, finance, foreign trade, foreign investment, domestic investment and market expectations, he added.
Eighteen CEOs from the Global CEO Council, which groups 39 multinational companies that are global leaders in their respective industries, wrote to Xi recently and offered suggestions on China's economic development and international cooperation in the post-pandemic era.
In their letter to Xi, the CEOs spoke highly of China's efforts to successfully contain the novel coronavirus under Xi's leadership and take the lead in resuming work and production as well as its positive role in supporting the global COVID-19 fight and maintaining global economic stability.
They said that Xi's proposals on creating new opportunities out of crises and opening up new prospects in changing circumstances, as well as his resolve to unswervingly promote economic globalization, have further boosted their confidence in China and their commitment to staying rooted in China.
The Global CEO Council was founded in 2013. The initial CEO Council was formed by the CEOs of 14 multinational companies.
A geopolítica do 5G do ponto de vista brasileiro Paulo Roberto de Almeida Este longo artigo explicativo da Economist sobre as reações europeias à pressão americana em torno do 5G da Huawei traz uma grande confissão – não comentada – sobre a chantagem exercida pelos EUA sobre seus parceiros e suas companhias privadas, e constitui uma ameaça para o Brasil e sua diplomacia subserviente. Reparem como tudo isso começou: "In May 2019, citing alleged violations of sanctions against Iran—charges Huawei denies—America used powers designed to stop the transfer of military technology to bar the company from receiving American components vital to the systems it sells. "Those measures had loopholes: suppliers could keep on selling Huawei many components as long as they were made in facilities outside America. So this year America targeted the whole supply chain: as of September it will be seeking to stop companies around the world from using software or hardware that originally comes from America to manufacture components based on Huawei’s designs." Trump – não a América –– tem raiva do Irã e da China, e por isso adotou atitudes unilaterais, com pretensões à sua aplicação extraterritorial e de obrigatoriedade universal, ou seja, quaisquer empresas do mundo estariam obrigadas a sabotar a Huawei, do contrário serão sancionadas financeiramente, por inscrição numa lista negra. Ora, a diplomacia subserviente do chanceler acidental já aceitou o princípio das sanções unilaterais com aplicação unilateral, ao votar contra a resolução sobre o embargo americano a Cuba. Assim, se os EUA quiserem aplicar sanções unilaterais contra o Brasil, não poderemos reclamar ou abrir um caso contra os EUA na OMC ou em outros foros, uma vez que já aceitamos a validade e a legitimidade do enorme desrespeito ao Direito Internacional e aos nossos interesses nacionais. O mesmo se dá no caso da Huawei: a diplomacia bolsolavista já disse que quer banir a Huawei do leilão do 5G, o que significa um atraso para o Brasil. Trump não está banindo a grande empresa chinesa porque ela é "comunista", um argumento ridículo; ele a está banindo porque as empresas americanas estão atrasadas na preparação para o 5G e ele não quer permitir o avanço chinês, que não tem nada a ver com espionagem indevida. Os ingleses se renderam à chantagem e pressão americana, mas Trrump quer que o Brasil também se renda novamente. No que depender do presidente subserviente e do chanceler acidental, ele não precisa se preocupar: a contribuição já está assegurada. Paulo Roberto de Almeida
The geopolitics of 5G America’s war on Huawei nears its endgame
In Europe, however, there exists a mixed response to the Chinese telecoms-equipment giant
On may 15th the American government announced a startling escalation in its campaign against Huawei, a Chinese company which is the largest provider of telecoms equipment in the world. American politicians and officials have long expressed concerns that mobile networks which rely on Huawei could allow snooping and sabotage by China. In May 2019, citing alleged violations of sanctions against Iran—charges Huawei denies—America used powers designed to stop the transfer of military technology to bar the company from receiving American components vital to the systems it sells.
Those measures had loopholes: suppliers could keep on selling Huawei many components as long as they were made in facilities outside America. So this year America targeted the whole supply chain: as of September it will be seeking to stop companies around the world from using software or hardware that originally comes from America to manufacture components based on Huawei’s designs.
The move was a serious blow to the company. It may well have brought a sigh of relief in Britain. In January Boris Johnson, the British prime minister, had approved a substantial if clearly demarcated role for Huawei in Britain’s 5g telecoms infrastructure. Its promise of a faster, more commodious type of mobile broadband that allows completely new internet applications and might prove necessary for self-driving cars has made 5g a touchstone for seers scrying the next big thing and for politicians who pay heed to them. Infrastructure spending stamped with such a hallmark of futurity is right up Mr Johnson’s alley. If Britain’s existing procedures for overseeing Huawei’s role in telecoms infrastructure were applied, the government argued at the time, Huawei’s equipment could be used in “non core” parts of the network, and Britain could get its 5g systems up and running considerably sooner, and cheaper, than would otherwise be possible.
This decision was unpopular both with the White House and with a significant faction within Mr Johnson’s Conservative Party, with the opposition happily backing the rebels. Dismay over China’s imposition of new security laws on Hong Kong, in breach of the agreement under which the territory was handed back to it, heightened feelings further. America’s new salvo of sanctions provided a plausible reason for changing course. The inevitable dislocation to Huawei’s supply chains, the government said, would make relying on the company riskier. The new measures also meant that the vaunted system whereby British spooks vetted Huawei equipment would no longer be able to do its job: it would itself fall foul of the American sanctions.
On July 14th the government said it will ban mobile-network operators in Britain from buying Huawei equipment for their 5g networks, and told them to remove equipment already installed by 2027. Well before that—by the time of the next election, in 2024—the country would be on an “irreversible path” to expunging the Chinese firm from its networks, said Oliver Dowden, the culture secretary.
Mr Trump immediately took credit for having “convinced many countries” not to use Huawei. While some have been on board for a while—Australia banned Huawei 5g equipment in 2018—others have moved more recently. In June telecoms companies in Canada and Singapore announced plans for 5g networks built around equipment provided by Huawei’s main rivals, Ericsson, a Swedish firm, and Nokia, a Finnish one (see chart 1). In both cases Huawei had previously been a possible provider. On July 6th the head of the French cyber-security agency advised network operators which do not currently use Huawei not to plump for it in future.
Now all eyes are on Germany, which has said it will decide on the matter in the autumn. If it follows America’s urging and Britain’s example then the rest of the eu will probably go the same way, and a significant corner will have been turned. Western communications systems will be a bit less insecure. America will have used its sovereign might to humble one of China’s national champions, and China will doubtless be responding. The technophilic imperative that has made 5g a totem of the fully networked future will have had its momentum checked, at least a little, by a mixture of countries not wanting to upset America and being willing to upset a China they find increasingly disturbing.
The last domino
Perhaps most profoundly, such a change may leave behind it a world where governments are less willing to depend on companies from countries with divergent interests to supply capacities they deem strategic. “At the heart of this is a dilemma which the West has not faced before: how to cope with a technology superpower whose values are fundamentally opposed to our own,” in the words of Robert Hannigan, a former boss of gchq, the British signals-intelligence agency.
Germany’s decision is not a done deal. Deutsche Telekom (dt), a 32%-state-owned company, is the country’s largest mobile provider and already relies heavily on Huawei equipment. It has lobbied strongly against any action that would make it harder for it to roll out 5g. The Ministry of Economic Affairs, often eager to defend the interests of German industry, has backed the firm. Angela Merkel, the chancellor, has not wanted any trouble with China (see Europe section).
Yet, like the British Conservatives, Mrs Merkel’s Christian Democrats have split on the issue. As Norbert Röttgen, a conservative member of parliament and one of the leaders of the anti-Huawei faction, has put it, “We cannot trust the Chinese state and the Chinese Communist Party with our 5g network.” The Social Democrats, who are part of the governing grand coalition, and the opposition Greens are also opposed to letting Huawei play. “If there were a vote in parliament today, Huawei would lose,” says Thorsten Benner of Global Public Policy Institute, a think-tank based in Berlin.
Mrs Merkel, who will make the final decision, has so far been circumspect. She says she does not want to exclude a company on the basis of its nationality and that any firm that complies with certain security standards should be allowed to sell its wares in Germany. In late 2019 China’s ambassador in Berlin threatened retaliation against German companies should the government exclude Huawei from its 5g plans, and insiders say it is a threat the chancellor takes seriously. Meanwhile, dt is busily creating the aura of a done deal. It intends to provide basic 5g services to 40m Germans by the end of this month using equipment from both Huawei and Ericsson, though users will see little benefit at this stage. The company has also decided to intensify its co-operation with the Chinese firm in cloud computing and other areas.
There are many reasons for Europeans to be uncomfortable siding with America. Having missed the boat on the rise of consumer tech—Europe still bemoans the lack of the home-grown Google or Amazon—European politicians fear falling further behind if they delay 5g and the various wonders it is held to enable, such as an “internet of things”. Mobile-network operators play up these fears, with an eye to either keeping their ties to Huawei or receiving some form of compensation if it were to be proscribed. By combining direct costs with estimates of lost gdp they argue that ditching Huawei will cost the continent tens of billions of euros.
Regulators and independent observers are not convinced. Mr Dowden, admittedly an interested party, put the impact of Britain’s volte-face at two or three years’ delay and £2bn or so. A study by Strand Consult, a research outfit, thinks that the cost of eschewing Huawei would be quite modest for Europe as a whole, given that its ageing 4g kit would soon have to be replaced anyway. It estimates a total of around $3.5bn, no more than $7 per mobile customer.
That said, not all European mobile-phone customers will get the same deal. The eu has failed to create a single digital market; an operator in Poland cannot sell services to a customer in Sweden in the same way New York-based Verizon sells to Californians. So where China and America have three network operators each, Europe has more than 100 (see chart 2). In some markets, such as Belgium, Germany and Poland, the local companies are highly reliant on Huawei; companies in Finland, Ireland and Spain would face much lower costs if forced to make the switch.
Shrunken titans
The multiplicity of operators is a function of eu policy. Denied a continent-wide framework that would let them compete in far-off markets, telecoms companies are also kept from consolidating at home; the eu commission likes there to be four providers in each market. The resultant competition provides a stonking deal for customers. In Europe the average revenue per mobile-phone user is less than €15 ($17) a month. The average American user pays more than twice that. Rewheel, a data company, says that the cheapest unlimited-data plan in America costs €74 a month. In Germany the figure is €40, in Britain €22.
For network operators this fierce level of competition, coupled with the high costs of comparatively small, unconsolidated markets, constitutes a serious drag. Some carriers, including dt and Vodafone, a British operator, have returns on capital lower than their costs of capital: not the kind of business model that will find willing shareholders in the long term. Emmet Kelly of Morgan Stanley, a bank, points out that the market capitalisation of Europe’s major operators has shrunk from over €1trn in June 2000 to €258bn this June—a loss of 81% in real terms. Telefónica of Spain and Orange in France, once giants, are now not much more than minnows.
Mobile-network operators have long complained to the commission that the thin margins which scare away investors leave them unable to splash out on upgrades such as 5g, and that as a result Europe will fall behind its peers. China is investing massively in 5g and America is intent on keeping up; Mr Trump has called 5g “a race America must win”. The gsma, which represents mobile-network operators, says that by 2025 half of all mobile users in America and the richer bits of Asia (including China) will be on 5g, compared with just one-third of Europeans.
In the past, Brussels has turned a deaf ear to such griping. The eu’s download speeds have remained comparable to those in America; the price of data services has fallen even faster than usage has grown: what’s the problem? But it is possible that a ban on Huawei could catalyse the “new deal” on regulation that the operators crave. Governments which realise that their actions are delaying 5g and driving up its costs might see their way to easing merger restrictions. The spectrum needed for mobile services, which in Europe is often sold through auctions designed to maximise revenue, might be given away instead, as happens in China and Japan. The lobbyists’ list is long. The industry takes courage from last year’s appointment of Thierry Breton, who was once boss of France Télécom (now Orange), as commissioner for the internal market.
Pending such a deal things might just slow down. There is already agreement among analysts that despite the hoopla 5g networks will be rolled out more slowly than the previous 4g ones were. This year’s 5g-spectrum auctions in France, Spain and Poland have been delayed by the covid-19 pandemic, which may quietly suit some operators. The equipment needed for 5g is only going to get cheaper and more reliable, as all chip-based kit does.
To the extent that there is indeed a race, it will not necessarily be won by those who get off to the fastest start. The services on offer so far are mostly just a faster version of 4g, and sometimes in practice the speed is not all that great. The most revolutionary aspect of 5g technology—the way in which it allows the workings of a network to be reconfigured through software and thus tailored to specific needs—will need years to come into its own. Profitable business models will take time to emerge.
A continent of its own
A slower roll-out might also ease pressure on Ericsson and Nokia. The two Nordic companies will plainly benefit from countries turning away from Huawei, even if, as looks likely, they lose sales in China. They are precisely the kinds of industrial champion Europe is trying to promote these days, but there are worries about whether they can seize the moment. They now enjoy a duopoly in America (for a while there was talk of an American company taking a stake in one of them, but this idea seems to have been put aside). Some operators question whether, given those commitments, they can meet the needs of a Huawei-free full-speed-ahead Europe too. There is also the awkward fact that, supply chains for electronics being as they are, using European system integrators still means that much of the equipment comes from China.
The difficulties of having only a few suppliers will subside in time. Samsung of South Korea, a country very committed to 5g, is a growing presence. On July 15th Reliance Industries, an Indian conglomerate, announced that its Jio network, which uses a Samsung 4g network, will be building its own 5g infrastructure and selling it to others. Jio is likely to follow in the steps of some other carriers, most notably Rakuten Mobile in Japan, which are betting on networks based on advanced software, off-the-shelf hardware and open standards, thus side-stepping the need for systems integrators like Ericsson, Huawei or Nokia. Widespread implementations are still several years away, though.
Chinese reprisals against countries chucking out Huawei can be expected to come around a great deal sooner. China buys a lot from Europe, with Germany its largest trading partner in the bloc. It also invests quite heavily in the continent, having been courted by many of its leaders. Some of that may now be at risk. On the day of Britain’s u-turn the Chinese ambassador to London, Liu Xiaoming, tweeted that it was “disappointing and wrong”. China is painting the decision as a groundless capitulation to anti-Chinese pressure from America, and saying it calls into question the safety of Chinese investments in Britain, which are many and various.
But Europe does not see China exclusively through a commercial lens. Last year eu leaders designated it a “systemic rival”. The eu has since been working to limit Chinese state-backed groups’ operations in Europe. Its treatment of the Uighur minority, its reluctance to see word of covid-19 spread to the world and its move on Hong Kong have all raised hackles.
That does not mean Germany, or Europe as a whole, will necessarily ditch Huawei. Europe’s China links matter, and it does not like being pushed around by America. Policymakers on the continent have long fumed at the financial muscle that allows American administrations to punish European firms it sees as miscreants by squeezing the banks those firms deal with. But that does not mean it wants its internet infrastructure under the control of a third power that might, in time, aspire to use that control against it. A continental security official points out the underlying irony: “America wants to prevent China being able to do what America currently does to the rest of the world by controlling the financial system.”
The irony, though, does not invalidate the argument. Europe has sometimes acted to maintain its technological autonomy with respect to America in areas where national-security needs and civil infrastructure overlap, such as satellite launchers and navigation systems. In an interview with The Economist last November Emmanuel Macron, the French president, complained about European reliance on American tech platforms. At the same time he called development of 5g “a sovereign matter” and went on to say that “Some elements [of the 5g network] must only be European.” That did not in itself rule out any role for Huawei. But subsequent developments have pushed the continent further in that direction. American pressure may end up seeing Europe take a more assertive view of its “digital sovereignty”.■
This article appeared in the Briefing section of the print edition under the headline "The European theatre"
