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The China Forum seminar on Tuesday 12 March 2024 was delivered by Professor (Chair in Education, Growth & Equality, ; Former Minister of Education, Italian Government; Emeritus Professor, ).

Professor Bianchi’s lecture analysed the impact of China’s development over the past forty-odd years upon global political economy. The world economy changed profoundly after the 1970s, from a closed and localized economy to one that was open and integrated. Under the WTO the world economy was transformed through the reorganisation of production into global value chains (GVCs), with offshoring from developed countries to lower cost developing countries. During this era, China’s position within the global economy altered dramatically. In 1980 China accounted for 2% of global GDP, compared with 26% for the EU and 51% for the G7. By 2022 China’s share had risen to 19%, while the share of the G7 had fallen to 30% and the share of the EU had plummeted to 15%. China has grown into by far the world’s biggest manufacturing base, accounting today for 31% of global manufacturing value-added, compared with 32% for the G7 economies. During this era, China came to occupy a crucial role within the structure of GVCs.

After the global financial crisis of 2008/9 the world entered a new phase. In the USA the crisis was followed by a secular shift of capital allocation into the digital economy. US-based ‘tech’ companies dominate the digital economy, establishing oligopolistic positions in global markets outside China. In early 2024, the six giant US-based ‘tech’ companies (Microsoft, Meta, Amazon, Alphabet, Apple and Nvidia) accounted for six of the top seven places in the list of the world’s leading companies by market capitalisation. Since the global financial crisis, China has developed world-leading companies in a wide array of high-technology industries, including sustainable electricity generation (solar, wind, hydro, nuclear, HVDC long-distance transmission), electrified transport (urban mass transit, high-speed rail, electric vehicles, batteries), and telecommunications (5G, telecoms equipment, Beidou Satellite system). China’s digital catch-up underpins the country’s innovation progress. By contrast, Europe has been unable to construct a unified approach towards the digital economy. In Professor Bianchi’s view, Europe has lost the race for the digital economy, although it may have new opportunities in the application of digital technologies to resolve environmental pollution and meet the social welfare needs in an ageing society.

In recent years the USA has led a move to re-configure GVCs into separate blocks. This threatens to resurrect the division of the world into closed and antagonistic regions. In Professor Bianchi’s view, this is harmful to the goal of global sustainable development, which requires an open and integrated economy, and peaceful international relations. Moreover, barriers to the international division of labour will tend to intensify the use of automation in the high-income economies, with significant socio-political consequences. Professor Bianchi concluded by examining the complex challenges facing the Chinese government.

Issues discussed in Q&A session included: the impact of the USA’s Inflation Reduction Act; the level of European economic competitiveness; the economic sectors in which Europe might invest in order to compete with China and the US; the extent and nature of financial and institutional decoupling; the relationship between states and companies in the process of de-coupling; the relative power and influence of state and market in the current era; the changing economic and political role of giant multinational firms; the evolutionary path of Chinese society; and the extent to which European governments can cooperate in the pursuit of global peace.

Patrizio Bianchi is Professor Emeritus of Applied Economics at the University of Ferrara, UNESCO Chair “Education, Growth and Equality”, Speaker of the Italian Network of UNESCO Chairs, Member of the Accademia Nazionale dei Lincei, and Former Minister of Education of the Italian Government.

He studied at the University of Bologna and at the LSE. He was a full Professor of Political Economy at the University of Bologna, and in 1998 he founded the Department of Economics and Management of the ancient University of Ferrara (1391). He was Rector of the University of Ferrara and President of the Foundation of the Conference of the Italian Rectors.

As Regional Minister of Education, University and Research of the Region Emilia-Romagna, he reconstructed the school system of the region destroyed by the earthquake of 2012, and promoted the Bologna Big Data Technopole, hosting the ECMWF Computing centre and the EU Supercomputing centre.

Minister of Education of the National Government chaired by Mario Draghi, he reopened the school after COVID-19 and implemented the reforms of the Italian education system, agreed as part of the EU New Generation Program. He chaired the G20 on Education and Labour 2021, the UNESCO Working Group on Inclusion preparatory of the UN Summit “Transforming education to transform the World” that opened the General Assembly 19 September 2022.

He is Honorary Professor at the South China University of Technology, Doctor h.c. University of Buenos Aires and of the Medical University of Tirana, he is Commendatore al Merito della Repubblica Italiana.