Romano Prodi: The US-China Relationship Is In Danger If Romney Wins

 Globalization affecting the American elections and the CCP Congress?
 “No country can manage the world’s problems alone.”
The integration of European politis?
 “It’s a long way off, but the worst is over now.”
National sovereignty of the individual members?
 “Ever more threatened by the whims of the market.”
Who is better for the relationship with China, Obama or Romney?
 Obama. Romney is convinced that China is hostile to US interests and that it should be tamed.
Romano Prodi is a firm believer in the philosophy of President Obama: “the world is a complicated thing.” And it is from this phrase – in an exclusive interview with the newsletter Radiocor written for the annual Osservatorio Asia Conference which will be held this Thursday in Milan – that Prodi has developed a series of considerations on world geopolitics.
Q. Professor Prodi, the two most important political events this year are the US elections and the Chinese Communist Party Congress. Never have the outcomes for these two countries been so heavily influenced by outside factors. How and why have they ended up in this situation?
A. Because of the existence of globalization. The world is interconnected and no country, however large and important, can solve or manage the world’s problems alone. Obama was right when he said just after being elected that “the world is a complicated thing.” He understood well that the America superpower would have to contend with other realities, both old and new. Among these, China is the biggest novelty.  What would happen if China stopped financing US debt? The novelty that will take getting used to is that, if China were to take this kind of extreme action, the consequences would be unpredictable and probably negative for China itself. Keep in mind however that this turbulence is a phenomenon that always accompanies great changes in power. It’s true that what we are witnessing today is one of the biggest and fastest changes that history can remember.
Q. Is it right to foresee a more rigid position with the Chinese if the conservative candidate Mitt Romney wins, and more conciliatory if it is Obama?
A. It will probably be like that. But the question is not only about the toughness of the approach to China, but also the willingness to negotiate. Obama talks hard with China for electoral reasons, but he knows that negotiation is the only weapon available. He knows that competition from the Chinese – in every sense, and not just in manufacturing – has by now consolidated, and a confrontation would be impossible. And so he uses the weapon of negotiation, despite how tough he may seem. Romney on the other hand is convinced that China is hostile to US interests and should be tamed. That road is obviously more tortuous and dangerous.
Q. Does the next Chinese leader, most likely to be Xi Jinping, have enough room to maneuver to make it possible for China to propel the international economy? Or is it more likely that he will favor a nationalistic China, intent on building up enough strength to be unassailable?
A. Xi Jinping has the credentials to be an innovator, but it will take time to see if he is capable of being a reformer as well. The power of the leader is huge, but it has waned over the years. The Secretary of the CCP today is a synthesis that the party uses to reconcile the different interests of the country: stability, progress, security, and social barriers that can sometimes become antagonistic. Just how much Xi Jinping will be able to accomplish will depend not only on him, but also on his context. He will need to seek a consensus, but will also be forced to make radical decisions. It is on these two rails that he will find his challenge. If I were to venture a guess, I would say that he will probably not change the direction set by his predecessors, but he will try to continue (if possible) with more speed.
Q. Is the G2 real, or is it a journalistic shortcut? With globalization, does political power have to contend with economic success more than in the past?
A. The G2 may be real, but deep down both the US and China are afraid that the G2 will create friction that they will not be able to minimize.  Therefore, the G2 will exist, and it will not exist. In any case it will not dominate the world as it did during the Cold War. China has not replaced the Soviet Union. There are other players that are seeking their own independence and to maintain alliances without considering ideology or waiting for orders from Washington or Beijing. In this way the economy has increased its importance with respect to politics: it is integrating players who remain hostile to each other on the political battlefield. It is difficult to predict how it will turn out.
Q. Europe seems to be marginalized from the big decisions, struggling to maintain internal order and with its currency under attack. What can it contribute to the resolution of the crisis?
A. If Europe was united, we could talk about a G3, but the prevailing logic is one that slows political integration. Europe could do a lot to help itself and to fix the crisis. It should forget its divisions, and find leaders with vision and ideals and enthusiasm. It’s not true that a greater integration of policy will drag the economy down, as we have seen, the costs of a “non Europe” have been very high. Today we are paying this cost both in financial terms, and in loss of credibility and authority. We need a burst of pride to help us recover our genuine European values. A burst that is still out of reach, even though I think the low point of the crisis has now passed, maybe because everyone, beginning with the Germans, is terribly afraid of the dissolution of the Euro. In any case, only after the German elections next summer will we be able to think about building new, stronger European institutions. In short: individual nation states have undoubtedly lost sovereignty, especially in Europe.
Q. Is there any way to deal with this new kind of situation?
A. This is the mother of all questions. The individual nation states are powerless – or less powerful than in the past – to solve their own problems. This incoherence may not be felt in China or the United States, who have great autonomous strength, but it is dramatic for the single European countries, who are exposed and have few defenses against the fluctuations of the market. The overall public debt of the Eurozone is less than that of the United States, and yet it is crushing Europe because there is no central bank and no common policy. In this context, every delay in institutional reforms is causing damage. Unfortunately, there has been a resurgence of anti-European phenomenon that too often forget the decades of peace and prosperity – not to mention the international authority – created by the integration of the Old Continent.