Responding to the China Challenge in Techno‐nationalism: Divergence between Germany and the United States

Abstract

President Xi Jinping has made clear that the 'Great Rejuvenation of the Chinese Nation' will involve world-leading competitiveness: his 'Made in China 2025' plan identifies 10 core sectors of advanced technology. This article investigates how elites in the United States and Germany have responded to this 'China challenge', a burgeoning 'techno-nationalist' phase of globalization. First, the article explores the divergent state responses of the USA and Germany: while both national elites are concerned, the reaction of the US has been far more confrontational. It then tries to explain this striking contrast in terms of the disparate domestic constituents. The US since Trump has aligned electoral grievances around manufacturing job losses with the interests of the national security establishment. In contrast, German labour has fared better in globalization, and the German state has not been able to override the interests of German capital in the way that the US has. Thus, the authors offer an account of how Germany and the US have responded differently to the China challenge, as well as explaining why with reference to the divergent structural conditions and class interests. The article ends by speculating that 'techno-nationalism' will only accelerate in the face of the COVID-19 pandemic.This article is partly based upon work conducted in association with COST Action CA18215 -China in Europe Research Network (CHERN) -supported by COST (European Union Cooperation in Science and Technology). We would like to thank the participants of the CHERN inaugural workshop, including our discussant Jeffrey Henderson, as well as three anonymous reviewers, for their constructive feedback. Sean is also grateful to Peter Beattie, Daniel Lynch, Denise van der Kamp, Nikki Westwood and Steve Wright for stimulating debates on American power, the rise of China and world order. The authors contributed equally to the development of this article, and take responsibility for all faults.

Geoeconomics in a Changing Global Order

“…The rise of China as a challenge to US hegemony does not only affect those two superpowers-as a 'classical' geopolitical reading might suggest-but has geoeconomic reverberations across the globe. For instance, the German and the American response to the 'China challenge' diverges significantly in the age of 'techno-nationalism' (Starrs & Germann, 2021): Certain strata of German labor and its export-oriented industry firms seek to further benefit from a symbiotic relationship with a continuously expanding Chinese consumer market, while US labor and the American security establishment demand a more aggressive stance toward Chinese economic and geopolitical competition (Baltz, 2022). Such examples show not only how the 'new cold war' between the United States and China can be studied using geoeconomic perspectives instead of classical geopolitical ones (see, e.g., Blackwill & Harris, 2016;Gertz & Evers, 2020), but also how a geoeconomic lens expands the analysis toward different actors and new geographies.…”

Umkämpfte Globalisierung: Amerikanische und europäische Reaktionen auf Chinas Aufstieg im Hochtechnologiebereich

“…Der Kurs gegenüber China war folglich eine Form des „Techno-Nationalismus“ (Samuels 1994 ; vgl. auch Starrs und Germann 2021 ), bei dem China durch Angriffszölle und Sanktionen zum Einlenken gebracht werden sollte. Diese Maßnahmen richteten sich gegen die Funktionsweise des hybriden Parteistaatskapitalismus in China, der bisher mit Zöllen, Subventionen, Kapitalverkehrskontrollen und Rahmenplänen erfolgreich zur technologischen Entwicklung des Landes beigetragen hatte.…”

“…Neben einer Budgetaufstockung wurden die bereits weitgehenden Kompetenzen deutlich ausgeweitet: Whereas before CFIUS could block investment leading to control of a firm in certain proscribed sectors relating to national security, it could now scrutinize any investment in technologies deemed to be “foundational” and “emerging”, any investment at all from SOEs, as well as real estate transactions close to military installations. (Starrs und Germann 2021 , S. 1128) …”

Silent revolution/passive revolution: Europe's COVID-19 recovery plan and green deal

“…In addition, China is no longer only merely seen as an outlet for German exports. Whereas Germany's response has been less confrontational than that of the US (Starrs & Germann, 2021, pp. 1126-1131, China is increasingly viewed more ambivalently as a rival in the wake of the takeover of blue-chip companies in vanguard sectors, such as the robotics manufacturer KuKa.…”