Europe is waging its own tech war with China
Europe Is Waging Its Own Tech War With China
WRITTEN BY ABISHUR PRAKASH
25 November 2020
In 2016, China made a run at one of Europe’s top technology firms: Kuka. Based in Germany, Kuka produces industrial robots, like robot arms, used in factories all over the world. The company bidding for Kuka was Midea, a Chinese appliance maker. Alarmed at the Chinese takeover, Brussels tried to organise a counter-bid, an attempt to keep European technology under European control. It failed. And, at the beginning of 2017, Midea finalised its acquisition of Kuka, giving China control of one of the worlds top robotics companies.
This was a wake-up call for Europe (and the US). From London to Berlin, China was rapidly growing its technology footprint, taking control of highly-strategic companies. This gave Beijing access to breakthroughs it could use for defence, finance or commerce. In other words, through technology, China was building new geopolitical power. The West knew it had to take action to remain competitive. Months after Midea bid for Kuka, the US blocked a Chinese acquisition of Aixtron, a German chip maker, a precursor of what was to come.
Today, Europe is going after Chinese technology and is firing on all cylinders. This could lead to a new tech war between Europe and China.
Over the past several months, as the US expanded its Clean Networks Initiative (designed to tackle Chinese technology like 5G), European nations have lined up. First, the UK banned Huawei’s 5G infrastructure. Then, it was Sweden. Then, it was Italy, Bulgaria, Romania and Poland. From Western to Eastern Europe, China is being locked out of European 5G. Except, even as Chinese firms are banned, Chinese technology may still be present. An investigation in Australia found that Ericsson sources some parts from Panda Electronics, a Chinese company with ties to the People’s Liberation Army (PLA). In other words, Chinese technology has so deeply penetrated Europe that fully unplugging will be difficult. Furthermore, China has warned that it could retaliate by banning Nokia and Ericsson from exporting ‘Made in China’ products. The profitability of European and Chinese telecommunications companies is now linked directly to the geopolitics of technology.
The tech war between Europe and China may not get the same spotlight as the one between the US and China. Nor does it exhibit the same aggressiveness. But — don’t be fooled. This is a fight for control over the future.
At the same time, Europe is preparing its own holistic strategy to compete with China (and the US) on technology. Earlier in the year, Europe said it was developing a ‘master plan’ for areas like AI and data. Part of this plan revolves around facial recognition. Europe wants all facial recognition systems used in the continent to align with certain values. And, if a system is not aligned, it may be retrained using European data. This proposal is effectively a new ‘tech barrier’ to protect European culture. And, since most of the world’s top facial-recognition companies are Chinese (i.e. Megvii, SenseTime), Brussels is targeting Chinese technology in a new way. This is a big deal for another reason too. Governments are now using technology to buffer their own cultures!
Europe is also taking aim at talent. In 2019, the EU launched the ‘European Laboratory for Learning and Intelligent Systems’ or ELLIS. First proposed in 2018, ELLIS was a blueprint to build AI-labs across Europe in order to keep European AI-talent from leaving for China (or the US). It was to mimic CERN, which was created after World War II, to stop physics talent from leaving the continent. The EU earmarked $220 million when it launched ELLIS, building AI-labs in cities like Amsterdam, Copenhagen, Helsinki and Tel Aviv (Israel is the only non-European nation in ELLIS). This means Europe isn’t just targeting Chinese technology head-on. It’s also targeting the people who could drive China’s technology industry, namely, engineers and computer scientists based in Europe. This could lead to new ‘talent wars’ between Europe and China as each side tries to attract the people who may build the next billion-dollar company.
The foreign policy of the past, which has governed Europe’s relationship with China, is completely changing due to technology. Instead of collaboration, it’s competition. So far, most of the tech war between Europe and China has been one-sided: Europe going after China. Why hasn’t China retaliated? One explanation is that Beijing is playing a waiting game. China knows that the US wields extraordinary influence over Europe. The Chinese may be hoping that in January 2021, a new kind of foreign policy emerges in Washington, where Chinese technology isn’t targeted. And, that this spills over into Europe.
Except, this is a long shot. The tech strategies that Europe has unveiled represent a new direction for Europe in the world. The world’s largest single economy is eyeing technology to drive it forward and keep it relevant. A new hunger has emerged in Brussels. This won’t change, regardless of who is in power in the US, China or Europe itself.
The tech war between Europe and China may not get the same spotlight as the one between the US and China. Nor does it exhibit the same aggressiveness. But — don’t be fooled. This is a fight for control over the future. With the stakes so high, how far is each side willing to go?
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Abishur Prakash is a geopolitical futurist at Centre for Innovating the Future where he helps companies succeed in tech-driven geopolitics. He has authored four books including Next Geopolitics: Vol 1&2, Go A.I. and The Age of Killer Robots. Image credit: European Commission