ABSTRACT
Against the backdrop of slowbalization, but also growing bifurcation between the US and China, this chapter focuses on the economic realm of US–China strategic competition and what it means for the European Union. In the first section, it analyzes the areas where slowbalization—and in some cases deglobalization trends—is largest, from trade to supply chains and investment but with special focus on technology. Financial flows are so far less affected but with worrying signals, except for the COVID period for the latter, but the trend is that of bifurcation. This is also happening with people-to-people exchanges even after COVID. Finally, this chapter ponders the impact of this competition on the EU and offers ideas as to how the EU should react. The EU is obviously squeezed in a world of great power competition without room for multilateralism. It should leverage its economic size and its relatively developed technology to obtain the best terms possible for continuing to support the transatlantic Alliance while keeping markets open elsewhere. This includes China but with a view to reducing dependence on Chinese imports especially in the crucial sector of green tech, instrumental for Europe’s decarbonization. The EU’s continued quest for a stable and fruitful transatlantic Alliance is more realistic than that of strategic autonomy to achieve equidistance between the US and China. While it might be a Solomonic aspiration, it lacks realism in the current area of great power competition as an economic area without a central political power, an army, and with technology dependencies, mostly with the US.
