China’s new trojan horse: Electric cars
Speaking at Fortune Brainstorm innovation Italia organised by the prestigious LUISS University in Rome, Senator Giulio Terzi di Sant’Agata, warns the next wave of China’s aggression to dominate global economy, electric cars.
The conclusion of the G7 Summit in Puglia has brought forth strong concerns, with China being mentioned 28 times, not in mild terms but as a “malign actor.” In addition to asking China to reassess and stop its support for President Putin’s Russia and to conform to international order in various sectors, the G7 has made precise observations concerning economy and trade. China, in its industrial orientation, persists in implementing non-market global policies that lead to global repercussions, distortions, and harmful overcapacity in an increasing range of sectors, undermining workers, industries, economic resilience, and security of the west.
The Guangdong–Hong Kong–Macao Greater Bay Area ,commonly known as the Greater Bay Area (GBA), is a megalopolis, consisting of nine cities and two special administrative regions in South China. It is envisioned by Chinese government planners as an integrated economic area aimed at taking a leading role globally by 2035.
It is the largest and most populated urban area and is among the four largest metro areas in the world, comparable with the metro areas of New York City, Tokyo, and San Francisco. The GBA—with a total population of approximately 86 million people — includes nine mega cities of Guangdong province: Guangzhou, Shenzhen, Zhuhai, Foshan, Dongguan, Zhongshan, Jiangmen, Huizhou, and Zhaoqing as well as two special administrative regions, Hong Kong, and Macao (Macau). Hong Kong, Guangzhou, and Shenzhen have been described among the world’s 50 “superstar cities”. Surrounding the Pearl River Delta with a total area of 56,000 sq. km (comparable in size to Croatia), it is the largest and the richest economic region in South China.
Senator Giulio Terzi di Sant’Agata, President of the Italian Senate’s Permanent Commission on European Affairs, former Minister of External Affairs of Italy, when asked about the G7’s observations on China and the rising importance of the GBA at an event at LUISS University in Rome made the following observations.
“The Greater Bay Area faces a beautiful sea, the South China Sea. Not many have grasped the geopolitical significance of placing 86 million inhabitants in front of a strategically crucial portion of the Pacific for the Chinese government and the Chinese Communist Party, with a significant presence of naval forces—considered the flagship of the People’s Liberation Army—thus delineating a fully integrated dual civil/military system. This is the reasoning behind the Greater Bay Area and the militarization of the South China Sea.” he said, pointing out the strategic importance of creating a civilian barrier in one of the most tense naval theaters in Asia.
“Let’s also mention Japan. A world of scientific freedom, a world where—she made a beautiful quote, “science is free”—we lament brain drain, but we don’t cry over the fact that Leonardo was a great master in France, or that Matteo Ricci and many other of our intellectuals traveled the world. The scientist is free; free to produce, to go, to use funding, to understand resources, to immerse in great cultures. Science is freedom, but I want to emphasize that this does not happen in China. There are millions of Chinese researchers in America, while we see a growing number of Western scientists in China today, thanks also to programs like the “One Thousand Talent Program.”
This ability to fund, to offer conditions that go far beyond any economic treatment possible for world-renowned universities like Harvard, the Sorbonne, or LUISS, attracting foreign scientists and researchers, that is, Westerners, to China in the Greater Bay Area is an element that “works” and, in this sense, there is increasing consideration of reproducing such a version in Europe.
At this point, I want to make a provocative suggestion: absolutely avoid recreating a Greater Bay Area! An area regulated by a highly advanced research system with the aim of dominating artificial intelligence, quantum computing, space exploration, interconnections, the global telecommunications system, material research, and military research. A large area directed by a political system like the Chinese communist one that imposes on scientists—millions over the years, but at least one million a year—who come to the West to return home with the acquired knowledge and the obligation to make all their “knowledge” available to this civil/military system that is the Greater Bay Area. It is no coincidence that the Greater Bay Area has a very high number of Chinese PhDs, estimated to be 20% of the total. There have been many estimates of intellectual property thefts valued, as calculated by American intelligence leaders a long time ago, in the order of hundreds of billions annually.
Therefore, we, the European Union but also countries that recognize our system of rules, intellectual property rights under the WTO, etc., are tied to an international order based on ratified treaties, international law, on things essential to our societies and considered essential by our political systems. We will never force, never blackmail our scientists in the world, our “Leonardos” of today, threatening their families if they stay in Europe or Italy, with terrible reprisals.” he continued, stating the issues scientists face on a daily basis in China.
“To realize what is really behind the promises of the GBA, it is worth looking at its founding charter, in 2017, whose basic document—the action plan—clearly states that the People’s Liberation Army must have not only access but must be integrated into the most advanced research of all technologies, all startups, all industrial clusters existing in that area. This means that, as we well know, there is no possibility of data control, not even the activities of a board of directors, in China without the National Security Law. The presence, once of those called people’s commissars, now called an official, an expert, is kindly invited by the government to be part of every significant board of directors.
Reading the G7 communiqué which for the first time ever has been absolutely explicit, yes, in the desire to see China as a necessary economic partner on this, but wanting this economic partner on a shared level of rules and norms respected by all parties. Very specific the communiqué compared to all others, in my opinion very specific in terms of the concern it expresses about the overproduction of batteries by the three main Chinese car manufacturers centered precisely in the Greater Bay Area, overproduction that doesn’t serve internal demand alone, but increasingly won’t serve the relationship to exports.
The presence of Volkswagen, Mercedes-Benz, and BMW that already have plans for this. And that’s why Europe’s decision to start reviewing its line of action on massive dumping, state aids, etc., which you surely read, to protect the automotive sector with tariff barriers, far from those American ones, but starting to position against Chinese car manufacturers who don’t even respond to the commission’s queries. There is an objection from the German government on this, exactly because the German government, as well as the Hungarian and perhaps even Swedish governments due to Volvo being Chinese, Volkswagen massively moving production for electric cars.
When I asked someone who knows these issues well, a German expert, “isn’t Germany making the mistake of depending entirely on a single partner in the automotive sector after having made the error of depending on a single monopolist in the energy market?” The response I perceived was “but investors look at profits.” However, there’s an important phrase by former US Trade Representative Robert Lighthizer in a recent “Foreign Affairs”: manufacturing isn’t the entire economy. The economy must ensure the security of our lives, managed with attention to interference and destabilization risks.” said Senator Terzi, discussing the threat that Chinese mass production of batteries and electric cars pose to the European and global economy.
“If the automotive and mechatronics market across Europe is deserted, because that’s inevitably what will happen, as we’ve already experienced with China in solar panels and battery production, with figures showing that China’s electric battery production capacity will be 5.7 million tons next year, while the global market demand for electric batteries this year is 2.7 million tons, leading to a huge stockpile to massively enter [global markets] at ridiculous prices, destroying other production forms and [normal combustion] motors, which in a gradual and sustainable transition can be achieved with decarbonization processes through, for example, biofuels”.
“Do you believe Chinese electric cars decarbonize anything? Can anyone explain why China has increased coal imports significantly in recent years? Chinese coal import statistics, incredibly sometimes true, show a 63% increase in coal imports this year compared to last year or 2023 versus 2022. Chinese coal production is 5.7 billion tons annually, and electricity production through mega coal power plants continues uninterrupted. While other parts of the world stop coal plants, China continues this vertical growth. Where is lithium refined? Where are other rare earth elements refined? Most of the electricity for car components in China comes predominantly from coal plants. So, can we say we’re decarbonizing by buying Chinese electric cars while China continues to carbonize the planet’s atmosphere?” asked the Senator.
China’s recent aggressive stance at promoting its electric cars is just another strategy to destroy automotive production industries worldwide in the name of decarbonisation. While the G7 has noticed and noted this, the European automotive lobbies close to China, continue to insist that this is the actual path ahead. Not only the G7, but also the G20 must be very cautious accepting China’s new Trojan horse in the form of cheap electric cars or car components. While decreasing carbon emissions is important, it is essential to do so in a sustainable manner, without being hostage to the Chinese dragon.
