While France and Germany view the transatlantic security alliance as crucial to their security and prosperity, there is also a strong desire in those countries to emphasize European (or, rather, national) strategic autonomy from the US. At the same time, the view in Central and Eastern Europe is not universal, with some countries like Hungary placing a premium on the relationship with Beijing – a stance which, to some extent, is guided by the significant Chinese digital and technological investment in Hungary. This investment is also visible in the larger EU member states, which have welcomed Chinese participation in research and development as well as other key digital and technological domains (see Figure 3, which shows the number of individual Chinese technology projects in each European country). These countries are keen to retain such investments – in some cases because companies might go out of business if Chinese investment was not forthcoming and also because Western governments do not necessarily see a value in underwriting those companies. This desire to maintain inward investment flows creates a natural point of influence for China within Europe, but also counteracts attempts in Europe to present a more aggressive front against China on technology in particular.
Within the transatlantic alliance too, there is an inherent tension caused by competition and cooperation. Western governments may currently favour cooperation to confront the challenge posed by China, but this is not always the case among private companies, and each side of the Atlantic is likely to favour its own businesses. Ideas for joint US and European support for Western companies that can become ‘champions’ in technologies currently dominated by Chinese firms do not appear to have been taken forward.
Companies themselves do not always have the same interests as their host governments and tend to be more agnostic in their political views. Their desire to access large markets like China means they may be more inclined to seek engagement. Vast parts of tech supply chains are linked to China, while Western tech companies sell considerable volumes of goods in the Chinese market. This makes the technology space an inherently difficult one for Europe and the US to control and hinders any joint effort to force companies to comply with an anti-China stance.
This tension between private and public sector interests runs through the entire digital and technology space. Within China to some degree it is more coherent, though often the West underestimates the tensions within the Chinese system – most recently evidenced by the clampdown on social media and tech companies within China. This development reflects a desire by the Chinese government to bring the sector under tighter state control, in part due to many of the same concerns around data protection that exist elsewhere, but also out of concern over the immensely powerful structures being built in the Chinese private sector, which the state fears could supplant it in key sectors of the economy. At the same time, in the West, liberal market policies make it difficult for governments to develop industrial policies that do not undermine the free-market logic underpinning the European and American economies. Given the increasing centrality of technology in daily life around the world, this dynamic will be a difficult one to manage anywhere.
Vast parts of tech supply chains are linked to China, while Western tech companies sell considerable volumes of goods in the Chinese market. This makes the technology space an inherently difficult one for Europe and the US to control.
At the same time, the decision to focus transatlantic cooperation in a vehicle such as the TTC reflects both the importance for the area for future growth and its role in the competition with China. Within the technology domain, the public sector largely acts as a regulator, and is crucial in determining the rules within which companies operate. This impacts everything from development and ethics to income, economic viability, employment and tax burdens. Given the size and power of the transatlantic economy in this regard, coordination affords the EU and US considerable influence in determining international technological norms.
The public sector can also play a significant role in investing in the research and development that underpins the discoveries helping to develop the digital world – though, in this area, the public sector is most usefully able to play a supportive role. Once technologies have started to achieve a certain maturity, it becomes harder for the public sector to be involved as this can be seen as distorting the market. At earlier stages of development, government can provide the investment and support that can help ideas be tested and in some cases fail. Identifying which technologies to support, and how long to continue to support them, becomes a difficult balance for government, especially when market viability in certain key technologies may only be achievable through subsidy – for example, when a much cheaper Chinese technology is widely available.
Finally, there are also normative and conceptual disputes between Europe and the US in the area of digital technology; for example, on the subjects of data privacy and regulation of online discourse. In Europe, there is a greater willingness to seek to impose restrictions, while in the US a more libertarian approach is favoured. At the same time, European approaches to personal data protection have gone much further than the US – exemplified by the General Data Protection Regulation (GDPR), which entered into force in May 2018 and which places much greater emphasis on data managers to ensure citizens’ control of personal data. This directly contradicts the business model of numerous online firms, including that of large US social media platforms, and has caused a degree of transatlantic friction. In contrast, China has created its own legislation mirroring large parts of GDPR.
However, in terms of the openness of online discourse, and even in areas like protection of citizens’ data, Europe and the US are closer in perspective than either of those two partners are to China. In terms of developing the future infrastructure and standards of the global digital economy, Europe and the US also share more with each other than either does with China. This extends into the global institutions that shape our technological world, where there is a growing effort by both Europe and the US to coordinate efforts to counterbalance Chinese attempts to dominate and establish norms that reflect their own interests.
