With all the volatility and conflict in a world of messy geopolitics, industrial development specialist and technologist Chen Xi argues that Europe should emulate the pragmatic approach of Asian economies in putting economic development and cooperation and the need to secure high-quality jobs for people over war and division.
Protesting mounting energy prices outside the prime minister's office in London, April 2022: It could be a long, cold winter (Credit: Alisdare Hickson)
In 2021, fossil fuels accounted for 37 percent of the electricity generated in the European Union (EU), with renewable energy accounting for another 37 percent and the remaining 26 percent from nuclear power. Russia supplied much of the fossil fuel component – 40 percent of natural gas consumption, 27 percent of oil and 46 percent of coal. Since the EU is reconfiguring its energy consumption patterns and sourcing, in the long run, it will not be a problem for it to reduce its dependence on Russia for natural gas, delivered mainly by pipeline. In the short term, the EU will move quickly to diversify its energy imports – for example, by purchasing liquefied natural gas (LNG) from around the world.
The logic of Europe sourcing its energy needs from Russia remains economically and logistically compelling. From my perspective as an industrial development and smart-city planner, or just as a thinking person in Asia, it is difficult to understand why the EU should use all means to ostracize Russia, which is the obvious and natural provider of energy to fuel the European continent’s development.
Of course, there are geopolitical and strategic considerations for associating with the North Atlantic Treaty Organization (NATO) in light of the war in Ukraine, but who profits? American energy suppliers are reaping huge benefits from the Russia-Ukraine conflict. The US is the now the world’s top exporter of LNG, after coming behind Australia and Qatar in 2021. But this rush to diversify away from Russia is bound to disrupt many of the EU economies, all in the name of strategic alignment with the US and NATO.
For the EU and NATO states, it is a matter of values and principles – Russian President Vladimir Putin has violated fundamental international law by invading a sovereign nation. I sympathize with the Ukrainian people but the root of this conflict is NATO’s longstanding strategic push to force Russia into the corner. The question for both sides is whether values and principles are worth defending by war rather than communications, negotiation and understanding. The goal, I would argue, is to hit Russia’s state-owned enterprises much as the US and the West have pursued decoupling from China. But is this worth a proxy war, an illogical commercial decoupling that will benefit energy merchants but harm European citizens who want to light and heat their homes at a reasonable cost during the winter? Do the perceived strategic benefits of decoupling from Russia really outweigh people’s prolonged economic suffering, especially in the aftermath of the pandemic and the destruction in caused?
The US and the West’s sanctions on the development of Russia and China, especially in key areas such as ICT (information and communication technology), energy and finance, have changed the business landscape, where even non-strategic items such as cotton and solar panels have become contentious. Asian economies have been caught in the middle of these battles. Japan, South Korea, Singapore, Australia and New Zealand joined in imposing sanctions on Russia but other Asia-Pacific economies have not. Asian countries have coped with the geopolitics without getting wrapped up in the rivalries and choosing sides. With Russia and China, they have pivoted to rebuild and reconfigure energy, automotive and semiconductor industry chains that had been disrupted. Russian and Chinese businesses continue to explore the world and seek out opportunities in the global market.
In Asia, there is deeply concern about but not obsession with the geopolitical risks. There are instead efforts to carry on – improve governance and focus on key tasks such as creating high-quality jobs and adopting technology to drive greater efficiency and improve people’s lives. Asian economies, from Singapore to South Korea, from Tajikistan to Timor Leste (now on course to become ASEAN’s 11th member), all expect the Chinese market to open up further and are gearing up for greater economic cooperation with China.
Asia is doing what Europe did generations ago before the World Wars that still scar the minds of Europeans: It is giving priority to its economic development. Asian economies are finding ways to create more high-quality jobs rather than getting enveloped in a clash of civilizations and values. While the West decouples from Russia and China, other nations are refraining from joining that bandwagon. Indeed, it would not be surprising if ASEAN and Middle East countries and even South Korea should eventually join China/Russia-centric groups such as the Shanghai Cooperation Organization (SCO) and the BRICS (which currently includes Brazil, Russia, India, China and South Africa).
Leave the Atlanticist nations to pursue the geopolitics of decoupling and division, if they wish, though Europe would do well to emulate the pragmatic Asian approach. What are needed today are solutions not disputes over values. Asian economies will pursue deeper regional integration through connective corridor projects such as transport links from Kunming to Kuala Lumpur and from Kashgar to Tashkent. They will build not just be hard infrastructure but will also construct digital and institutional networks connecting energy, communications and data systems and markets.
The guiding principle will be inclusion and tolerance for political, social and institutional differences to benefit people – pragmatism over geopolitics. This is the only way to move ahead and gather the critical mass of cooperation required to tackle the global challenges that need real attention – climate change, inequality and energy and food security. These cannot be solved if everyone is on a war footing.
Chen, Xi. (September 8, 2022) “The Global Economy and Great Power Competition in the New Era of Stagflation”, AsiaGlobal Online, Asia Global Institute, The University of Hong Kong.
Chen, Xi. (December 12, 2019) “The China-US Technological Competition and its Opportunity Costs”, AsiaGlobal Online, Asia Global Institute, The University of Hong Kong.
Chung, Lauren. (December 8, 2022) “Asia’s Next Generation of CEOs Reframe Leadership Amid Volatility and Change”, AsiaGlobal Online, Asia Global Institute, The University of Hong Kong.