European view of Asia needs a radical update

By Dominique Moisi

In the late 19th century, Europe viewed Asia as either a source of inspiration for its artists or a focus of imperial ambition. Asians, for their part, viewed Europe as either a model of modernity, as in Meiji Japan, or a barometer of decay, as in China.

A century later, the Japanese economic miracle had transformed the image of at least a small part of Asia in European eyes into a place of rapid technological and industrial progress. Now, in the first years of the 21st century, the perception of Europe in Asia and of Asia in Europe is changing dramatically, as Asia's economies boom while the EU finds itself mired in a crisis of identity and confidence.

Prominent Asians, such as former Singaporean prime minister Lee Kuan Yew (李光耀), are now warning Europeans that if they continue on their current course, Europe will rapidly become irrelevant for anything other than tourism and high-end real estate.

A prominent Chinese businessman who divides his time between Hong Kong and London was even more specific. At a private gathering of top business and political leaders in Paris a few weeks ago, he said, "You Europeans are becoming a Third World country, you spend time on the wrong subjects -- the constitution, the welfare state, the pensions crisis -- and you systematically give the wrong answers to the questions you raise."

Europeans' views of Asia in general and China in particular, are more complex and swing from lucid adjustment to a new and respected competitor to pure ideological rejection. In May 1968, in France, the students -- or some of them, at least -- who took to the streets to invent a new world were dreaming of Maoist China, a China in the midst of the brutal and senseless Cultural Revolution. Their absurd and baroque infatuation was as much the product of ignorance of Mao Zedong's (毛澤東) crimes as it was the result of boredom in a prosperous society where unemployment was almost nonexistent.

Today, by contrast, their heirs are criticizing the Asian capitalist model. Yesterday China was an anti-capitalist lodestar for utopian revolutionaries; today it has become an ultra-liberal nemesis for a new generation of utopian reactionaries -- the defenders of the status quo in Europe. The student demonstrators in the streets of Paris don't want to become like Chinese and Indians. They reject globalization and refuse to surrender hard-won social guarantees.

European economic elites perceive China and India very differently. They are now fully aware that their slightly nostalgic post-colonial view of these countries as large export markets and deep reservoirs of cheap labor has become outdated. China and India have become genuine competitors who deserve respect, if not sheer awe.

Quality, costs and delivery times in auto manufacturing, for example, are reaching the European level. Europe retains an advantage in terms of pure science, as in the pharmaceutical industry, but emerging world-class companies, particularly in India, are increasingly able to recruit MIT and Harvard graduates, while maintaining lower labor costs and thus global competitiveness.

Unfortunately, although European leaders recognize the Asian challenge, they have failed to use it as a reality test in the process of globalization.

In fact, it would be fair to say that European politicians, with a few exceptions, have been slow to adjust their world-views in accordance with the revolutionary pace of change in Asia. Caught between their lack of long-term strategic vision and their obsession with short-term interests, Europe's political leaders have largely failed to win the respect of their Asian counterparts, in contrast to European companies, which are faring much better in Asian eyes.