Technological cold war and the new bipolar geopolitics

Fidel Sendagorta, Manuel Muñiz and Georgina Higueras

On 9 September at 7 p.m., the Rafael del Pino Foundation organised the dialogue "The technological cold war and the new bipolar geopolitics", with the participation of Fidel Sendagorta, Manuel Muñiz and Georgina Higueras.

Fidel Sendagortawas Director General for North America, Asia and the Pacific at the Spanish Ministry of Foreign Affairs from 2015 to 2018. In 2014, he was Secretary General of the Spain-US Council. He was Ambassador to Egypt from October 2010 to May 2014. Previously, he was Director General for the Mediterranean, Maghreb and Middle East (2008-2011), Ambassador-at-Large for Mediterranean Affairs (2007-2008) and Director of the Analysis Office at the Ministry of Foreign Affairs. He was a Rafael del Pino-MAEC fellow with the Project on Europe and the Transatlantic Relationship from September 2018 to June 2019. A diplomat since 1984, he has served in various diplomatic posts at the Spanish Embassies in Tokyo, Havana and Rabat, as well as at the Permanent Representation of Spain to the European Union in Brussels. In the Ministry of Foreign Affairs, he was also Advisor to the Secretary of State for International Cooperation and Latin America from 1991 to 1993 and was Deputy Director General in the Office of the Minister from 1993 to 1996. Fidel Sendagorta holds a Law Degree from the Complutense University of Madrid and a Diploma in International Studies from the Diplomatic School of the Spanish Ministry of Foreign Affairs. From 2003 to 2008 he lectured at the Diplomatic School and published the essay "Europa en el crepúsculo: ¿declive o renacimiento?" (Biblioteca Nueva, Madrid 2007). He is also a member of the Scientific Council of the Real Instituto Elcano de Estudios Internacionales y Estratégicos.

Manuel MuñizRafael del Pino Professor of Global Transformation and Dean of the IE School of Global and Public Affairs and Rafael del Pino Professor of Global Transformation. He is also the Director of IE's Center for the Governance of Change, an institution dedicated to the study of the challenges posed by the acceleration of technological and social change in the public and private sectors. Dr. Muñiz's academic work focuses on the fields of innovation, disruption, political economy, and regional and global governance. Between 2015 and 2017 Dr. Muñiz directed the Transatlantic Relations Program at Harvard University. Since 2017 he has been Senior Associate and one of the promoters of the Project on
Europe and the Transatlantic Relationship at the Harvard Belfer Center for Science and International Affairs. Throughout his career, Dr. Muñiz has advised governments and international organisations such as the United Nations, the G20, the European Commission and the Spanish Department of Homeland Security. He has also published essays or been interviewed by publications such as The New York Times, The Washington Post or Project Syndicate. Dr. Muñiz holds a Law Degree from the Complutense University of Madrid, a Master in Stock Exchange and Financial Markets from the Instituto de Estudios Bursátiles, a Master in Public Administration from the Kennedy School of Government and a PhD in International Relations from the University of Oxford. He has also been a David Rockefeller Fellow of the Trilateral Commission and a Millennium Fellow of the Atlantic Council. In 2016 he was named by Esglobal as one of the 25 intellectuals who are redefining Ibero-American thought.

Georgina Higuerasholds a degree in Information Sciences and a Master's degree in Contemporary History from the Complutense University of Madrid. In 1979 she went to China to do a postgraduate degree in the History of China's International Relations (1839-1949) at Peking University (Beida). Her long and prolific journalistic career includes correspondents for EFE in Beijing, Washington and Strasbourg and for Cadena SER in Moscow, but above all she stood out as an essential reference for Asian news in Spain during her two long decades as editor for that continent for El País. She has been a war correspondent in the conflicts in Afghanistan, the Persian Gulf, Chechnya, Georgia, Lebanon...; and special envoy to natural disasters (the cyclone in Bangladesh in 1991, the earthquake in Iran in 2003, the tsunami in 2004 and Fukushima in 2011...); assassinations (Zia ul Haq, Benazir Bhutto, Rajiv Gandhi...) and historical events such as the Tiananmen massacre. She has interviewed world leaders (Jiang Zemin, Mikhail Gorbachev, Yasser Arafat, Yitzhak Rabin...) and has poured this wealth of experience into books such as China, the Dragon's Revenge and The Awakening of Asia. She is co-author of China en mis ojos and, with Gustavo Martín Garzo and Manuel Rivas, of Haití, una apuesta por la esperanza.


On 9 September 2019, the Rafael del Pino Foundation hosted a dialogue between Fidel Sendagorta, Rafael del Pino-MAEC Fellow at the Belfer Center for Science and International Affairs at the Harvard Kennedy School, and Manuel Muñiz, Rafael del Pino Professor of Global Transformation and Dean of the IE School of Global and Public Affairs, on the technological war and the new global geopolitics. The first speaker was diplomat Fidel Sendagorta, who pointed out that we are currently in the first episode of the new dog-eat-dog competition between the United States and China, the current trade war, for global hegemony. This is a very long-term process and neither country now wants to make mistakes that could determine them in this process, because it could be interpreted as a possibility of weakness or because they could make mistakes that would force them to backtrack. Both are holding their own in a war of attrition, but neither is suffering enough to yield on the fundamentals. In this contest, China has one thing the US lacks: that the US has an election in just over a year's time. Trump believes that China might want to gamble on striking a deal with his successor in the presidency, if there is one. Trump China thinks such a deal might be simpler. The new administration, however, would not be fully operational for another two years and that is too long a period not to reach an agreement sooner. There is one area where China is suffering more than the US. This is that many American companies have left, or are thinking of leaving, China for other Asian countries, Mexico, etc., because being in China creates a significant political risk for them. This raises the question of the disconnection of the two economies. If the value chains linking the United States and China are broken, we could be facing a scenario of separation between these actors. A trade agreement would promote more globalisation, more interdependence. But the technological measures that the United States has adopted against Chinese companies, for example against Huawei, will not depend on a trade agreement, but on the logic of security. The US, in this sense, does not want to be vulnerable because of China's excessive economic dependence. China, in turn, realises that it was too dependent on the US in sectors such as semiconductors and wants to be autonomous as soon as possible. In this context, Europe faces three simultaneous challenges. These are the weakening of the integration process, with forces such as Brexit or the rise of Eurosceptic nationalist forces; the deterioration of the transatlantic relationship; and the return to a great-power power politics in which Europe holds worse cards than in the previous situation. Europe has made an effort to launch the autonomy debate, especially vis-à-vis China, which can harm European interests, in order to rebalance the situation. It is about using Europe's assets to maintain a more symmetrical relationship with China. For Europe, China and the United States are not on the same plane. China is a great trading partner, but the United States is also a great ally. So we will always be closer to the United States in terms of security and values. Europe's security depends to a large extent on this alliance with the United States. However, we have common ground with China in areas such as climate change or the maintenance of an open trade order. In these areas, therefore, Europe will be on China's side. With regard to technology, the United States has found that in the 5-G there were no American companies that could compete with large Chinese or European companies. Therefore, they have realised that there was a market failure there, so they should have more state presence in order to strengthen their scientific and technological capacity. In terms of security, the risks of having a Chinese company as a predominant player in 5-G telecommunications networks have been mitigated in Europe. The risk is that information could leak out and fall into Chinese hands, but the risk is also that 5-G is the most sensitive infrastructure because all the major technologies of the future will depend on it, be it artificial intelligence, autonomous cars, smart cities and smart factories, etc. In this sense, the US believes that the exclusion of Chinese companies provides a secure environment in which it can communicate secretly with its partners. Other countries, such as Japan, have also excluded Huawei because they believe that the first phase of a conflict with the big Asian country will be in the cyber field. These countries have excluded Huawei because they do not want to be in a vulnerable situation if one day there is tension with China. Europe is far removed from these scenarios because China is not considered a military threat to Europe, but it should be aware that we are moving towards a tougher world in which geopolitics is perceived as a zero-sum game. This world needs to be known. In recent years, China and Russia have been moving closer together to form an entente in all sectors. Bilateral trade has increased, joint military exercises have taken place, and their leaders have met 26 times in six years, even though Russia views China's actions as the new Silk Road with suspicion. From the point of view of balances of power, this partnership is not good for either the United States or Europe because it is creating an imbalance of power that is unfavourable to us and favourable to China. This can be changed by initiatives such as Russia's rejoining the G-7. For Europe and the United States, a Russia that is not so close to China would make more sense. For Russia, it would make sense not to be a junior partner of China, something that makes Russia uncomfortable, and to have more cards to play with Europe and the US on some occasions and with China on others, instead of being so closely aligned in a closed entente with China. The trade war is a struggle for technological supremacy and global hegemony. It is the first stage of this process. China has accumulated enormous economic power, which spills over into the political and military realms, which has changed the configuration of the world system as we knew it. China may have an economy larger than that of the United States in a few years, it has very advanced technological sectors in which it is beginning to be enormously competitive, it has modernised its armed forces and it is a major player. So we are entering into this dynamic of the emerging power rivalling the established hegemonic power. This image of Thucydides' trap has happened many times before in history. Sometimes it has been resolved in a conflictual way, sometimes not. So the future is open; it is not predetermined. China and the United States, however, see the Thucydides trap very differently. For China, this is almost natural because in their five thousand year history they have gone through moments of splendour and moments of decline. They now feel they are in a new moment of ascendancy and understand that this narrative is favourable to them. The United States, on the other hand, is a two hundred and fifty year old country that has been on an upward trajectory, and has been at the pinnacle of world power for a hundred years, has no experience of decline, no experience of cycles of decline and resurgence. They therefore find it difficult to accept the narrative implied by Thucydides' trap. Now, the United States also has the 'Sputnik moment', that is, the ability to bounce back and accept competition, as it did in the late 1950s when the Russians took the lead in the space race. The rise of China could now be a spur for the United States to recover its best energies to put them at the service of the recovery of its infrastructures, to remain at the forefront of major technologies. For this to happen, a certain political consensus must be reached, which is not currently in sight. Manuel Muñiz, for his part, commented that the rise of China is part of a much larger picture, which is the change in the liberal international architecture of the power structure, which is leading to a questioning of this architecture and its legitimacy. This questioning is being driven by two forces. One of them is exogenous, a siege of order from outside, which includes the Chinese piece, and a process of weakening from within, from those who built it, which is the growing support for non-liberal forces within countries. This second process is more serious because it is producing a fracture, a very important weakening. We speak of technological warfare because there are two factors. One of them is economic and is behind the rise of China and why this rise is so problematic, due to three causes. The first is the digital economy, which is causing a concentration of knowledge. This is atypical because the opposite was expected. The big knowledge poles are concentrated in the United States and China, which generates a lot of competition between them for the talent that is being taxed, and these countries are on both poles of collision. The second cause is that the business sector is segregating internationally, giving rise to two types of companies. One is productive and competitive. These are platforms and data-driven companies that are concentrating productivity growth. This paints a highly competitive business map, especially in the technology section. The clash between the United States and China is caused by savage competition for the technological frontier in markets that are increasingly zero-sum, where there are one or two players with monopolistic or oligopolistic power. These large firms are currently in China and the United States. The third cause is that technology transfer is also becoming more concentrated. The poles of start-up creation and technological advances are currently in China and the United States. So there are a number of trends in the economy that make that Thucydides trap more likely than it was before, because of a much more competitive, zero-sum, collision-of-interest economy. The second factor is what technology is producing in terms of a political model. This is at the heart of the debate because China is challenging another of the great political theses of recent years which is that when a country reaches a certain level of per capita income this precipitated a transition to democracy. China already has levels of per capita income at which, in other cases, we would have seen a political transformation, but what we are seeing there is the opposite. How long will China be able to continue to challenge this thesis? China is also using technology in a way that poses serious problems for the West. Firstly, because it is using it to repress certain minorities and dissidents. Moreover, the Chinese, through technology, big data and artificial intelligence, are going to be able to know what their citizens think without the need for all the democratic scaffolding, such as freedom of the press, political freedom or elections. With this, some in China are already saying that they have overcome what led to the collapse of the Soviet Union and other authoritarian regimes because they are going to solve the inefficiencies of the system through the use of technology.

The Rafael del Pino Foundation is not responsible for the comments, opinions or statements made by the people who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their sole responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio González, are the result of the debates held at the meeting held for this purpose at the Foundation and are the responsibility of the authors.

The Rafael del Pino Foundation is not responsible for any comments, opinions or statements made by third parties. In this respect, the FRP is not obliged to monitor the views expressed by such third parties who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their own responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio J. González, are the result of the discussions that took place during the conference organised for this purpose at the Foundation and are the sole responsibility of its authors.