Does China’s diplomacy have the answer to European inflation?

Editor’s note: Keith Lamb is a University of Oxford graduate with a Master of Science in Contemporary Chinese Studies. His primary research interests are China’s international relations and “socialism with Chinese characteristics.” The article reflects the author’s opinions and not necessarily the views of CGTN.

The pros and cons of China’s opening up were debated at Davos. As China’s consumers and industry come online, Christine Lagarde, president of the European Central Bank, argued that increasing competition for limited energy supplies will increase inflationary pressure on the Eurozone, which was already at 9.2 percent in December 2022.

Rather than focusing on the benefits of increased Chinese consumption and tourism, this logic, which negates the stories of “Chinese economic downfall,” due to COVID-19, will be fed into zero-sum “junk media” stories blaming China for global woes.

These “junk media” stories have long focused on the Belt and Road Initiative (BRI), which I bring up because it is through the BRI that China has entered into voluntary agreements to develop the world, bringing increased interconnectivity in numerous fields, including energy cooperation.

This requires an art of diplomacy that places aside narrow-minded political and ideological differences to focus on win-win projects that benefit all of humanity. It is this mentality that Europe, entangled in the web of U.S. hegemony, violent policies of de-development, and a colonial mindset must learn from.

Around the rim of Europe exists civilizations that are considered inferior by Western elites. In their quest to subjugate them, needless war brings chaos and disconnected energy infrastructure, which has not benefited Europe but the U.S.

The Ukraine conflict, cutting Europe away from Russian energy, is regarded as the catalyst for energy shortages. Here, Europeans should not have put their “eggs into one Russian energy basket.” However, a more levelled analysis points to failed diplomacy, a NATO push east, and Europeans, due to the abovementioned mentality, consistently putting their “eggs into fewer energy baskets.”

The Ukraine conflict has further narrowed European energy choices but there is energy all around the world, which could be used to Europe’s advantage. However, cut off from supplies, Europe is heavily dependent on expensive U.S. energy, the very NATO actor that has pushed for the Ukraine proxy conflict.

If energy exports from Iran and Venezuela had not been crippled by U.S. sanctions, their energy sectors would have developed and their exports would have kept down inflation. Before sanctions, Venezuela’s crude oil exports were consistently over 1500 thousand barrels a day. In 2021, its exports were only 447.8 thousand barrels a day.

Iran has the world’s second-largest gas reserves but requires huge investment over decades to access them. The U.S. has prevented Iranian gas from entering the global market. Through the threat of sanctions, it coerced Pakistan to back out of a joint gas pipeline deal with Iran. This madness, guaranteed by U.S. hard power, drives up energy prices, allowing inefficient U.S. shale oil and gas to be sold on an “unfree market.”

Europe, though at a loss to this hard power has “piggybacked” on it. North Africa could supply much-needed energy relief to Europe but even the recent history of European engagement in the region prevents this.

France was eager to obtain Libyan resources and thwart the pan-African Libyan-backed Gold Dinar, which threatened the U.S. oil dollar and the French-dominated African Franc. This led to neo-colonial human rights propaganda being used to destroy Africa’s most developed state, in 2011, through NATO bombing.

Rather than be a boon to Europe’s energy security, French companies did not get their required control over Libyan resources. In 2020, Libyan exports of natural gas have nearly halved from their level in 2010. Last year Libya’s Oil Minister, Mohamed Aoun stressed that “Libya does not have the ability now to export (the required) natural gas to Europe.”

Algeria, despite being Europe’s third largest gas exporter in 2021, holds an ambivalent attitude towards the continent. It could provide more energy to Europe but it has a contentious colonial history with France and a close relationship with Russia, which, under the the Union of Soviet Socialist Republics, supported Algeria’s anti-colonial struggle.

Algeria is threatened by European military and economic forces. It has seen the destruction of its eastern neighbor, Libya, and French troops in its southern neighbor, Mali, which “coincidently” is the source of France’s uranium.

The 2005 Association Agreement between the EU and Algeria could lead to greater EU infrastructure cooperation, increasing Algerian resource extraction capacities. However, market liberalization is demanded and Algeria’s 2020 Finance Law now restricts foreign companies’ engagement in exploiting its energy reserves.

What should Europe do? In the long term, to increase energy supplies, Europe must follow China’s multi-polar diplomatic example, rather than a hegemonic one, which it does not benefit from. It must refrain from the use of violence to extort gains from its neighbors, which fail in the long run.

Europe, a powerhouse in infrastructure, needs to cooperate on neighborly development without insisting on civilizational change. This strategy will also preserve Europe’s civilizational identity. First, it increases amity, which prevents a clash of civilizations. Second, developing the Global South decreases mass immigration, which some Europeans fear destabilizes their civilizational values.

Finally, Europe must seek an independent foreign policy that places Europeans first in a relationship among equals. To do so, Europe must not be swayed by outside powers claiming to hold European interests, at heart, while simultaneously using the European continent as a battleground to profit from.

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