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In the News

The U.S., Europe are Yet to Fathom the Chinese Challenge

March 28, 2018

Arun K. Singh

Distinguished Non-Resident Senior Fellow, Asia Program

Two recent investment and technology related developments revealed the current dilemma and contradictory impulses of the United States and Europe in dealing with the economic, technological, political, and security challenges from an increasingly assertive China.

Financial Times reported on February 24 and 25 that U.S. regulators “blocked the $580 million acquisition of a semiconductor testing company by a Chinese state-backed fund.” Another report, the same day, referred to Chinese carmaker Geely acquiring around ten percent of “Mercedes-Benz owner Daimler for about $9 billion, becoming its largest shareholder.” Subsequently, on March 12, the United States blocked the $117 billion acquisition of chip maker Qualcomm by Singapore based Broadcom, citing national security concerns.

Several recent commentaries, including by Charles Lane in the Washington Post of March 1, and a briefing in The Economist of the same date, talk of how the West got China wrong. Western engagement with China, initiated by Richard Nixon and Henry Kissinger in 1971 to gain geopolitical advantage against the Soviet Union, was subsequently justified on the expectation that an economic rise would lead to political reforms and adherence to a “rules-based international order.”

Hindustan Times
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