Spain in the geopolitical race between the United States and China

The United States and China are at the centre of the great geopolitical competition of our time. The two great powers are fighting for global economic hegemony and political dominance on several fronts, within a world order characterised by a profound instability that promises to continue for decades to come.

Within this framework, the Elcano Royal Institute presented on Tuesday 'Spain and the strategic rivalry between China and the United States', a report coordinated by Mario Esteban that analyses the effects of the confrontation between Washington and Beijing, the position of the European Union and, finally, the determining factors that Spain has to face the geopolitical challenge.

The President of the Elcano Royal Institute, José Juan Ruíz, chaired the panel of experts, which included Mario Esteban, Senior Researcher at the Elcano Royal Institute and coordinator of the Policy Paper; Elena Pisonero, President of Taldig and founder of Relathia; and, lastly, Fidel Sendagorta, Director General of Foreign Policy and Security at the Ministry of Foreign Affairs, European Union and Cooperation. 

"As a society, as a country, we have not yet become aware of the relevance of this issue," Esteban began. "This report aims to stimulate public debate in Spain on this issue. The rivalry between the US and China has a major influence on the current international order "and will continue to do so in the foreseeable future, with political, economic and security implications on a global scale", according to the document.

In recent decades, Beijing has narrowed the gap between its capabilities and those of Washington by pursuing an agenda radically at odds with that of Western democracies. This factor, according to the report, exacerbates the sense of threat that traditional powers feel threatened by China's rapid rise to power. 

In this sense, Pisonero warns that China "has woken up and wants to propose a differential social and economic model". For this reason, it could be said that we are moving towards a new bipolar dynamic with two antagonistic political systems battling to impose themselves on the global chessboard.

This issue must concern civil society, as it has a direct influence on the development of our societies. The president of Taldig added that in this scenario "we are going to be asked to take a continuous stance", a scenario in which the strength of Europe will be decisive.

The report argues that 'the frame of reference has to be Europe', although a joint stance at the national level is a priority. A fragmented Europe on China would make the interests of the EU and its member states vulnerable. 

In this sense, the Director General for Foreign Policy and Security of the Ministry of Foreign Affairs, Fidel Sendagorta, has indicated that "we have more muscle when we negotiate as a group of 27 countries" than if each one "deals bilaterally with China".

"In general terms, Spain's values and interests are much closer to the United States than to China", however, the Elcano Royal Institute researcher advocates "avoiding falling into fraternal dynamics". For Pisonero, China is an "economic opportunity that also poses its challenges".

European leaders identify the US as their main ally outside the Union, a view reinforced since Joe Biden's arrival in the White House with his multilateralist approach. "One of the possible areas of collaboration is the 'strategic challenge presented by China's growing international assertiveness', institutionalised through the EU-US Dialogue on China," the report states.

Sendagorta qualified his interlocutors: 'It is true that Spain is affected by this rivalry, but if it did not exist, or if the United States did not exist, we would also have to rethink our relationship with China, because it has gone from being an empire closed in on itself to exerting influence everywhere'.

This "friction" between China and the outside world is not only in Europe, but also in other areas of interest to Spain, such as Latin America and Africa. "In short, China's influence is already perceptible in many ways in our own country," said the director general of Foreign Policy and Security at the Ministry of Foreign Affairs.

"Companies, encouraged by globalisation, have disintermediated part of our supply chains with a very strong weight of manufacturing in China, which is not only a manufacturing of goods, but is increasingly technological," said Pisonero. "These interdependencies have been growing and, therefore, we are facing a very complex scenario in which there is beginning to be pressure from Chinese manufacturers who are aware that there is very strong global competition. 

For this reason, many companies are seeking a review of globalisation, "a review that has costs and a clear impact on the economy", acknowledged the president of Taldig, "but these are decisions that we are going to have to take". "De-globalisation is a threat, in a certain sense, to prosperity", Esteban pointed out, which is why we will try to maintain the basic structures that allow global economic connection within a minimum political agreement. 

The United States is Spain's main partner outside the EU. Washington plays a key role in its defence and economic affairs. "The US is the main source and destination of Spanish foreign investment, and if we compare the figures, it is clear that the Spanish economy is much more closely linked to the US than to China's", the document states. However, Spain must calibrate its position in the dispute, putting its sovereign and regional interests first.

"In which sectors do we want Chinese investment and in which do we not, and in which sectors do we want to invest in China? In Sendagorta's view, Spain must accept the multiple facets of its relationship with China and reject "the black-and-white vision of a new Cold War". "Accept complexity as the new framework for our relationship with China".

However, in Pisonero's view, Spain is going through a new scenario in which it must assume a "sophisticated" but integral position. "The world is less stable and more dangerous", he warned. Digitalisation and the importance of technological development prevent Spain from deploying as much strategic autonomy as possible, and it is necessary to take this path.

In this sense, Spanish companies have been successful in foreign markets as long as they have competed under a system of clear rules that guarantee a level playing field. "The key to globalisation is that we have a level playing field. We are not on the same rules and we are not working on the same playing field," said the president of Taldig.

Among the 23 proposals for action put forward in the report are, among others, that of "adopting a joint position". "If we do not reach it from civil society, from public actors, at an inter-party level, it will be very difficult for us to adopt an effective strategy". In this sense, the action must have a cross-cutting nature and incorporate experts in all possible areas, according to Esteban.