My speech to German business leaders about China

I was invited by my good friend Michael Schumann to give a keynote speech on China to members of the German business community. Michael chairs the powerful German Federal Association for Economic Development and Foreign Trade (BWA), one of Germany’s main business lobbies.

I’ve known Michael for 3 years. We first met in Shenyang, the capital city of Liaoning Province in Northeast China. I was there for yet another RV trip with my family (this time we toured the whole of Northeast China - “Dongbei”) and he was there because Shenyang is actually a very important city for German industry. It is where, for instance, the largest BMW factory in the world is located, and Michael kindly arranged a visit for us.

Michael is the complete opposite of what you’d expect the chairman of a powerful business lobby to be. You’d expect someone cynical, transactional and polished to the point of opacity. Instead he’s genuine, intellectually curious, and the kind of person who arranges a BMW factory tour for a family he’s just met simply because he thinks the kids would enjoy it. And, undoubtedly, that’s why he made genuine inroads in China: trust and sincerity are truly valued there.

Long story short, we’ve kept in contact since that day in Shenyang and when he asked me to speak at a webinar he was organizing in the context of his “China Bridge” (China-Brücke) initiative, a public diplomacy forum for Sino-German relations, I accepted immediately.

Below is the speech I gave, aimed at a German business audience, and at Europeans more generally. The title was “Seeing China Clearly: How to Read a Rising Power”.

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Good morning to you all, and thank you to China-Bridge for the invitation.

When I moved to China in 2015, I thought I understood the country. I’d read the newspapers, I’d read books about it, and I had followed the various debates. What I thought I knew was the conventional wisdom we’d all been taught: that China was a dictatorship with an economy built on cheap labor, that its citizens were indoctrinated by state propaganda, and that the whole system was an anachronism that would inevitably collapse or liberalize.

Then I lived there for eight years. And I discovered that virtually everything I thought I knew was wrong.

Instead, the China I experienced was going through a genuine renaissance like never before in its entire history - a country advancing at breathtaking speed, progressively leapfrogging the West in critical domains.

What struck me most was the asymmetry of knowledge. I was constantly meeting Chinese professionals who had studied at Oxford, Stanford, Sciences Po. They spoke fluent English or French. They understood the West intimately - our politics, our culture, our way of thinking. But during extended travels across China, even in major cities, I would go weeks without seeing another Westerner.

They had invested in understanding us. We hadn’t deemed them worth understanding.

I entered China believing its citizens were indoctrinated. I left certain that we were far more so. We committed a big error: we believed our own moral sermons constituted strategic analysis.

Now, why does this matter for us Europeans?

Because this isn’t just about one country. The historian Adam Tooze, who teaches at Columbia University, recently gave a fascinating presentation, putting it in terms I find compelling. He said: “China isn’t just an analytical problem. It is THE analytical problem of modernity. It is the master key to understanding modernity.”

I think he’s right. And his argument is worth understanding.

Tooze points to a single graph that he says shows the economic history of our species on the planet. It’s a graph on global coal production from antiquity to today. For the first 2,000 years or so, not much happens, it’s fairly flat. Then starting in the early 1,700s, lasting for about 250 years - the entire span of what we call the Industrial Revolution - you see the familiar story. Britain’s early lead, America’s rise, Germany’s industrialization, other nations following. Production grows, but gradually, predictably.

Then, around the year 2,000, something unprecedented happened. China’s line doesn’t just rise gradually like the others - it absolutely sky rockets vertically upward. China’s energy consumption in less than two decades dwarfs the combined consumption of every other nation across the previous two and a half centuries.

Tooze calls this “a sudden, utterly radical break with all previous human history.”

And it wasn’t driven by exports to the West - that’s only 10 to 15 percent of Chinese growth. It was driven by the most massive urbanization project in human history: the construction of China’s new cities, the movement of hundreds of million people, the modernization of the entire Chinese housing stock in 30 years.

What does this mean? Tooze has a phrase I find haunting: “the provincialization of the West.” We are no longer the central driver of world history. As he puts it: “The industrial history of the West was a preface to China’s industrial history, it turns out.”

Now, you might think this is just one academic’s opinion. But this shift is now officially acknowledged at the highest levels. The 2025 U.S. National Security Strategy - this is the strategy guiding Trump’s administration - declares in black and white that “permanent American domination of the entire world” was now “a fundamentally undesirable and impossible goal.” The 2025 National Security Strategy is, in my view, America’s resignation letter to global hegemony, almost entirely triggered by China’s rise and America’s recognition that it now has a peer. Recognition which, incidentally, is explicit in the document.

Your own chancellor, Friedrich Merz just essentially confirmed this. He just said that Pax Americana “no longer exists.” And crucially, he added: “This course is not temporary. Trump did not appear overnight, and this policy will not disappear overnight either.” In other words, it’s structural, it’s here to stay.

Which means that a remarkable consensus has emerged from Washington to Berlin to Beijing: American primacy is over, the multipolar world is here. The question is no longer whether this shift is happening. It’s how to navigate it.

And this is where we Europeans have a serious problem. I’ll give you a concrete example from France, but I suspect it resonates in Germany too.

A couple of months ago, a French MP named Sophia Chikirou was asked by journalists whether she considered China a dictatorship. She replied that she didn’t - that China has “a political system with a dominant party” where “it isn’t a single man who leads China.”

Now, you can agree or disagree with that characterization. Reasonable people can differ. This is a debatable proposition - the kind of question you could imagine being discussed at a university seminar, with scholars making arguments on both sides.

But that’s not what happened. The media response was unanimous condemnation. She was treated as if she had committed heresy - as if she had denied the Holocaust or endorsed terrorism.

This reveals something important about Europe’s current intellectual condition. When expressing any nuance about China’s political system is treated as scandalous, you create a situation where it becomes structurally impossible to understand China. Not just difficult - impossible. It reveals that there is a dogma, which prevents analysis by definition.

Which is very illogical no matter how you look at it. Say for instance that you think China is a threat. Which is also a respectable viewpoint, reasonable people can discuss. But how can you make this “threat” assessment if you’re making yourself systematically ignorant about the supposed threat? You can’t say “China is a threat → therefore we can’t analyze China neutrally” If that’s the case, how can you actually assess whether China is a threat? It doesn’t make sense.

And say China were actually a “threat”, hypothetically: wouldn’t this make it all the more urgent to abandon ideological thinking in favor of cold, hard analysis? If you’re facing a genuine strategic competitor, approaching them with the intellectual tools of a religious cult - where nuanced analysis is treated as heresy - doesn’t strike me as a particularly winning strategy.

Even beyond this ideological rigidity, there’s a deeper analytical problem: even people who are actually cold, hard realists find it hard to analyze China, because they often project Western frameworks that simply don’t apply.

Take John Mearsheimer for instance, probably the most famous international relations scholar in America. He’s the very definition of a cold, hard realist - the complete opposite of someone looking at the world through a liberal ideological framework.

And he’s a fierce defender of American hegemony against China, arguing that China must be “contained” because in his view all rising powers inevitably seek regional hegemony.

That’s largely been true of Western powers. When America was the rising power over a century ago, under Theodore Roosevelt, it behaved exactly as Mearsheimer’s theory predicts. Relentlessly expansionist. Military interventions nine times in seven years. Expelling European powers from the Western Hemisphere. Declaring itself the regional policeman with the right to intervene “whenever and wherever it judged necessary.”

But China today - despite being in a similar position as that of Theodore Roosevelt as a rising power - has followed a completely different path. No military interventions abroad. Economic rather than territorial expansion. None of the aggressive acquisitions that characterized America’s rise.

And this isn’t new. China has been the greatest power in its region for roughly 1,800 of the past 2,000 years. During this time, it had countless opportunities to behave like an aggressive, territorially-expansionist hegemon. Instead, we see a consistent pattern throughout the centuries: optimizing for stability, and economic relationships - not conquest and military domination.

We often misunderstand its so-called “tributary system” as being similar to European colonialism, but it couldn’t have been more different. In fact, George Yeo, who was Singaporean cabinet minister for 21 years and is one of the statesmen in the world who best understand China, recently described it in a speech: “Tributary is the wrong translation. ‘Chaogong’ is to pay respect, in response to which you will enjoy China’s largess. When you use ‘tributary’ in the Western context you think of it as protection money when [in China’s case] it’s the opposite: you give China some trinkets, you get back gold. This is how it was. And that’s why Southeast Asian countries competed with one another [to be tributaries]. Japanese merchants were fighting for tokens to trade in China. China used their market, their economics to control behavior.”

So that’s China’s historical DNA: using economic mass and market access to create gravitational pull, not the form of coercive regional hegemony or colonialism that people like Mearsheimer fear.

Deng Xiaoping himself, in a 1974 speech at the United Nations, said that if China ever “turned into a superpower” and “played the tyrant,” the people of the world should “identify her as social-imperialism, expose it, oppose it and work together with the Chinese people to overthrow it.”

These aren’t empty words. They reflect a fundamentally different strategic culture.

So if China doesn’t seek hegemony in the Western sense, how does it actually operate?

I think the best framework is gravitational. Mass creates its own gravitational field. A country of 1.4 billion people with the world’s largest manufacturing capacity exerts pull simply by existing. You don’t need to share China’s political system to benefit from its markets, to connect to its infrastructure networks, to participate in its supply chains.

Gravity doesn’t require affection, it doesn’t require China to transform others or to be coercive. It only requires mass.

The best illustration of this is Argentina’s president, Javier Milei. Before his election, he swore he would never do business with China - “not with any communists.” He couldn’t be more ideologically opposed to Beijing.

Yet after taking office, here’s what he told The Economist: “Relations with China are excellent. They are a fabulous partner. They don’t ask for anything in return. All they ask is that I don’t disturb them. We have economies that are complementary. Therefore, the well-being of Argentines requires that I deepen my commercial ties with China.”

He didn’t change his ideology. China didn’t ask him to. The relationship works because it’s mutually beneficial. This is geopolitical gravity overriding ideology.

A Chinese scholar named Zhao Long uses a perfect metaphor: the human body with China as the heart. Would it make sense for the heart to “win” against the lungs, liver, or brain? Should the heart carve up the chest cavity as its exclusive sphere of influence? Obviously not. The heart’s health depends entirely on circulation flowing freely throughout the entire system, nourishing every organ and enabling the whole body to thrive. Isolate the heart from the rest of the body, and both die.

As Zhao writes: “China’s strategic and economic rise is predicated not on regional containment but on global integration” and “Beijing’s influence grows when its regional partners are economically linked to a wider global system in which China plays a central role - not when those partners are locked into rigid blocs.”

This is precisely why China wouldn’t benefit from a sphere-of-influence arrangement. From its standpoint, it’s actually against its interests.

So where does this leave Europe?

I think we’re witnessing something like America’s Khrushchev moment.

In the late 1950s, Khrushchev broke with Stalin’s hawkish doctrine and embraced “peaceful coexistence” with the West. He did this for two reasons: to avoid military confrontation, and he wanted to redirect resources toward economic development in the Soviet world. It was the Soviet Union’s resignation letter from the Cold War as total struggle - saying they were no longer willing to bear the costs of a confrontation they used to define as civilization-defining.

China, at the time the Soviet Union’s junior partner, saw this as betrayal. Mao had organized everything around the shared ideological struggle. Khrushchev’s pivot wasn’t just a policy shift - it was abandoning what China thought the partnership stood for. China at the time officially called Khrushchev a “revisionist traitor” and that was the cause of the famous Sino-Soviet split.

The parallel today is striking. “Peaceful coexistence” is quite literally what Trump now says he wants with Russia and, to some extent, China. His latest National Security Strategy (NSS) prioritizes the US homeland and the Western hemisphere, and it redefines the competition with China as primarily economic rather than military (the very title of the China chapter in the NSS is “Win the Economic Future, Prevent Military Confrontation”, almost word for word what Khrushchev was saying with respect to the West).

In effect he’s told Europeans that the struggle they organized everything around is no longer worth it to America and he’s redirecting resources toward domestic development and their own continent. “Very, very aggressively” so, according to Merz.

Which means that Europe is now in the position of Mao’s China: junior partners who took the shared ideology seriously, who bore real costs for the common cause, now discovering that the senior partner’s commitment was always conditional. Trump is Europe’s “revisionist traitor.”

For Europe, this creates both danger and opportunity.

The danger is illustrated by the recent Nexperia case. After U.S. officials told the Dutch that this Holland-based semiconductor company must eliminate Chinese ownership to avoid American sanctions, the Dutch government used a 1952 emergency law to seize the company. China retaliated by banning exports from its Chinese operations. The result, which I guess you must be very familiar with in Germany, is that Europe’s automotive association warned of industry-wide production stoppages within weeks.

This is the perfect illustration of what it means to be a chessboard rather than a player. The Dutch seized Nexperia because of a threat by the US. China retaliated by halting exports. Then Trump and Xi met in South Korea, negotiated a resolution between themselves, and the Dutch weren’t even in the room. Or any European for that matter.

Europe folded to American threats, suffered Chinese retaliation, and then watched the two actual players settle things over its head. This is what happens when you’re the board on which others play rather than a player yourself. You don’t get to negotiate. You don’t get to set terms. You absorb the damage from both sides and have no voice in how the game ends.

The tragedy is that Europe had a choice. The Dutch could have said: “This is a European company. We don’t seize assets because Washington dislikes the shareholders’ nationality.” That would have meant accepting friction with the Americans. But it would have established Europe as a player with its own interests. Instead, Europe confirmed what both Washington and Beijing already suspected: that when the pressure comes, Europe will fold to whoever pushes hardest - which means both sides will keep pushing.

But there’s also opportunity. If America is playing Khrushchev’s role - accommodating Russia and China from strategic fatigue - can Europe eventually play Deng Xiaoping’s role?

Deng also pursued China’s own version of “peaceful coexistence” with the West but it came from a place of civilizational confidence, not strategic exhaustion like Khrushchev. He believed China had much to learn, and China learned voraciously. But the learning was in service of a project China never abandoned: its own modernization, on its own terms, for its own purposes.

Europe could theoretically do something similar. It has economic mass, technological capacity, a large integrated market. It sits at the crossroads of multiple gravitational fields - connected to both Asia and America. By rights, Europe should excel at multipolarity.

The irony is that Europe invented the tools for navigating such a world. Balance-of-power diplomacy, the Congress system, the intricate statecraft that once defined European politics - all born from understanding that in a world of multiple poles, you maintain relationships with everyone and get captured by no one.

That wisdom has atrophied. But it could be recovered.

Let me close with a historical lesson that I think speaks directly to this moment.

In the 16th and 17th centuries, Jesuit missionaries traveled to China. Figures like Matteo Ricci arrived in a China that was wealthier, more populous, and technologically comparable to Europe. That world was multipolar. And absent overwhelming power asymmetry, the Jesuits had to engage with China on terms of rough equality.

So they learned Chinese. They studied Confucian classics. They adapted Catholic theology to local contexts. Not from enlightened multiculturalism - from necessity. They understood what we have forgotten: when you cannot impose your framework, you must learn to operate within another’s.

This is the logic returning to international affairs. A world where the West lacks the overwhelming power to impose its preferences, forcing a return to the older diplomatic arts: understanding, translation, interest-based rather than values-based engagement.

I’d suggest three principles for engaging with China:

First, interest-based engagement. You don’t need to share values to trade, only mutual benefit. This is the logic that a large part of Asia, such as the ASEAN grouping, already operates on - eleven countries with radically different political systems cooperating because geography creates shared interests that override ideology.

Second, understand their logic rather than projecting ours. China’s governance and strategy operate on different assumptions, shaped by different historical experiences. Reading them through Western frameworks guarantees misreading.

Third, intellectual humility. The admission that perhaps we were more propagandized than we realized. That our condescension insulated us from reality. That understanding requires genuine curiosity.

Europe’s medieval Jesuit missionaries understood geopolitical gravity. The question is whether European business and political leaders can recover that wisdom - before it’s too late.

Thank you.