Eurasia 2024/1 - web

JANUARY 5, 2024

Barnabás Virág, Deputy Governor of the Magyar Nemzeti Bank, the central bank of Hungary

New strategies needed in Eurasia

8.9 EUR 3 290 HUF

Table of contents FOREWORD The EU's policy towards China: a clash of economic and ideological interests – Levente Horváth

GEURASIA

2-4.

New strategies needed in Eurasia: interview with Barnabás Virág, Deputy Governor of MNB – Mariann Őry

5. We need to cooperate with China: interview with former Czech President Václav Klaus - Mariann Őry

6-7.

Chinese alternative to the new world order – Marcell Horváth

8–9.

Macron’s Asian outreach – Ágnes Zsófia Magyar

THE ECONOMICS OF GEOGRAPHY

10-12.

Derisking fails to reach its goal – Philip Pilkington

14-15.

Anti-China policies have no majority – Olivér Hortay – Barna Péterfi

NEW SUSTAINABLE ECONOMICS

CULTURE AND INNOVATION

The race towards green transition: interview with Lorenzo Tavazzi – Mariann Őry

Zhu&CO – Tamás Velkei

16-17.

24-25.

26. Book reviews

NEW AGE – NEW ROAD

18–19.

RHYMES IN HISTORY

28-29.

Moldova: the link between Europe and Asia – Csongor Veress

Sustainable Eurasian connectivity – Norbert Csizmadia

21. China is leading

ANCIENT KNOWLEDGE IN A MODERN WORLD

the global AI race – Joakim Scheffer

2T2C: TALENT, TECHNOLOGY, CAPITAL, COGNITION

30-31.

22. The secrets to the success

Xuanzang, the traveller of the Silk Road – Gergely Salát

of Chinese education – Fan Mizi

“Proponents of connectivity, including Hungary, reject the policy which promotes blocs.

We see the policy of seeking de-risking as the real risk itself.”

Viktor Orbán

THE EU'S POLICY TOWARDS

CHINA: a clash of economic

and ideological interests

The 24th EU-China Summit took place in early December, where a delegation led by the President of the European Commission, Ursula von der Leyen, and the President of the European Council, Charles Michel, met with the Chinese leadership.

Although the EU leaders came to China under the banner of peaceful co-operation, they have not moved in that direction in recent years. The EU has imposed or plans to impose a series of sanctions on China, and "derisking", a kind of American "decoupling", has become increasingly vocal in the EU. In addition, the EU has announced the Global Gateway project in 2021, which would rival China's Belt and Road Initiative. The biggest difference between the EU and Chinese initiatives is that European developments have been sparse and have almost disappeared after two years, while the Chinese initiative celebrated its tenth anniversary in 2023 and has already produced a number of successful projects. But while the Chinese leadership supports the Global Gateway, the EU sees the BRI as a threat. Italy announced its withdrawal from BRI cooperation on the very day of the meeting...

Derisking is also not a realistic idea, as the EU and China are very important economic partners: in 2022, bilateral trade in goods rose by 23 per cent year-on-year to a record level of 857 billion euros (935 billion US dollars).

EU exports to China rose by 3.1 per cent to 230 billion euros (250 billion dollars), while EU imports from China increased by 32 per cent to 626 billion euros (683 billion dollars). In 2022, the trade volume amounted to more than 2 billion euros per day. It is also important to note that the EU imports 71 per cent of its vital gallium and 45 per cent of its germanium from China. Europe is dependent on Chinese raw material exports for 98 per cent of its digital and green transformation.

Derisking is therefore neither feasible nor in the interests of the EU, but a pure smear campaign against China.

It has often been joked on the international stage that world leaders do not know who to call when they want to negotiate with the EU. The recent meeting between the EU and China was a perfect illustration of this joke:

Levente Horváth, Ph.D., Director of the Eurasia Center, Editor-in-Chief of Eurasia

While two of them represented the EU to negotiate peaceful cooperation, Italy announced its withdrawal from the Belt and Road Initiative. French President Emmanuel Macron paid a spectacular visit to China in April, where he called on EU member states to make peace, cooperate and stay out of the US-China conflict, which many did not welcome, and Macron's opinion was immediately muted or even changed - he was very critical of BRICS. German Chancellor Olaf Scholz was the first to June 2023 he spoke of expanding cooperation with China - after all, more German cars are exported to China than are sold in the entire EU, but other German companies are also reluctant to reduce their presence in China - while the German Foreign Minister regularly stirs up diplomatic storms with her critical comments on China.

Hungary, meanwhile, is pursuing a realpolitik of peaceful cooperation with China in the spirit of its"Eastern Opening" policy.

It is obvious that the member states are primarily pursuing their own economic interests and that the bilateral negotiations with China are about expanding cooperation, while at EU level they pursue, or have to pursue (?), ideological interests.

One question remains: What is the EU's policy towards China? And who should Xi Jinping call to discuss this?

2

“We need a strong Eurasian cooperation based on mutual benefits”

Geurasia

New strategies needed IN EURASIA

by Mariann Őry Photos: Róbert Hegedüs WE ASKED BARNABÁS VIRÁG, DEPUTY GOVERNOR OF THE MAGYAR NEMZETI BANK, HUNGARY’S CENTRAL BANK, RESPONSIBLE FOR MONETARY POLICY, FINANCIAL STABILITY, AND INTERNATIONAL RELATIONS ABOUT THE CHALLENGES AND FUTURE OF EURASIAN COOPERATION. BARNABÁS VIRÁG POINTS OUT THAT IT IS A MISCONCEPTION THAT EUROPE WILL BE ABLE TO SOLVE ITS ECONOMIC PROBLEMS BY ISOLATING ITSELF. HUNGARY MUST OPEN UP TO THE EAST WHILE MAINTAINING OUR STRONG TIES WITH THE WEST. WE ASKED THE DEPUTY GOVERNOR OF THE MAGYAR NEMZETI BANK, THE CENTRAL BANK OF HUNGARY ABOUT THE CHALLENGES AND FUTURE OF EURASIAN COOPERATION.

- What geopolitical challenges do the countries of the Eurasian supercontinent face?

- In several regions, trends such as climate change, demography, scarcity of basic raw materials or even water are simultaneously limiting development. This in itself is exacerbating existing conflicts. Meanwhile, the positions of the major powers are shifting from cooperation to competition. The leading powers are working to consolidate and expand their own geopolitical spheres of interest. In the current tense moment, it is important to avoid a Thucydides Trap situation, where the world’s economic and power realignment is creating fears that could even lead to wider confrontation. There is a huge potential for cooperation, or even coordination, rather than fragmentation, which is essential to meet the global challenges of the twenty-first century.

- What are these global challenges?

- For the first time in modern history, the major economic powerhouses are facing shrinking demographic trends. As the demographic outlook is unprecedented, so is the global debt situation.

Never before has the world been so indebted. According to IMF data, world debt is nearly two and a half times global GDP. Climate change and the green transition are global issues that concern us all. We are in the final minutes of the twenty-first hour, where the cost of delay is exponential.

Everything from funding systems, regulation and taxation to education must be infused with the idea of sustainability. If there is the will, it is possible to achieve rapid success. Technological advances and the spread of artificial intelligence are superseding all previous growth models. This is a huge opportunity, but also a challenge. The bene-

3

4

There is a huge potential for cooperation, or even coordination, rather than fragmentation”

fits of robotisation must be balanced against the expected negative societal consequences. Technical progress creates jobs, but it also creates destruction. Significant social groups may face a difficult period of adjustment. Economic policy has a responsibility to facilitate this transition.

- What role can the Central and Eastern European region play in this transition?

- Central and Eastern Europe can play a particularly important bridging role in Eurasian cooperation. We are part of one of the largest consumer markets in the world, while our region remains one of the most attractive investment destinations in the world, where Asian investors are

now increasingly active. It is a misconception that Europe will be able to solve its economic problems in isolation. We need a strong Eurasian cooperation based on mutual benefits. We need to open up to the East while maintaining our strong links with the West. For Europe, the issue of energy production and storage is a key priority to remain competitive. There are already signs of rapid diversification in energy production, but the issue of energy storage is still unresolved. China is inevitably the world’s leading battery power, a technology that must be integrated into the European economic mainstream.

The author is managing editor of Eurasia

5

WE NEED TO COOPERATE

with China

by Mariann Őry Photo: Róbert Hegedüs

INSTEAD OF CONDEMNING CHINA, WESTERN EUROPE SHOULD BE MORE CONCERNED WITH ITS OWN AFFAIRS, AS THE EU HAS CEASED TO BE AN INDEPENDENT GLOBAL POLITICAL FACTOR, VÁCLAV KLAUS BELIEVES. THE FORMER CZECH PRESIDENT RECENTLY TOOK PART IN A GEOPOLITICAL CONFERENCE AT THE DANUBE INSTITUTE.

- The East-West divide is a very topical issue today. The Hungarian government says connectivity and cooperation with China are in our common interest. Do you agree with this approach?

- After the regime change, I was the first Czech leader to visit China, in order to re-establish relations, not only economic relations. This was in the first half of the 1990s, I was Prime Minister and the President was Václav Havel, who took the opposite view. The story is similar now. I am firmly in favour of accepting China as it is. We cannot change its political, economic or social system. China is a superpower and it is in our national interest to cooperate with it. Even if this is now a minority opinion in the Czech Republic, and not only there.

READ THE FULL INTERVIEW ON OUR WEBSITE!

- The European Union is pursuing a policy of decoupling the European and Chinese economies. Is this a realistic approach that serves the interests of the Union?

- I am a conservative and I hate this „decoupling” terminology. Let’s talk normally! I can imagine that we will cut our ties with China and China will survive. I am afraid that we will not. China does not need us that much.

The author is managing editor of Eurasia

6

CHINESE ALTERNATIVE

TO THE NEW WORLD ORDER

by Marcell Horváth

IN THE WAKE OF INCREASING GEOPOLITICAL TENSIONS, A SLOWING WORLD ECONOMY AND THE DIFFICULTIES CAUSED BY GLOBAL SOCIAL PROCESSES, A NEW ERA IN THE HISTORY OF GLOBALISATION IS DAWNING ON OUR WORLD. THE REINVIGORATED EAST IS NOW SEEKING TO ASSERT ITS INCREASED ECONOMIC WEIGHT ON THE GLOBAL POLITICAL STAGE.

7

The author is Executive Director for International Relations at the Magyar Nemzeti Bank, the central bank of Hungary

Photo: iStock

Over the last forty years, the centre of gravity of the global economy has slowly shifted eastwards, essentially returning to its starting point. The argument that the global North corresponds to the Western world and the global South to the East is becoming less and less valid.

While in the 1980s the developed countries accounted for 80 percent of global GDP, by the 2000s they accounted for 60 percent and today they account for just over 40 percent. At the same time, global population growth continues to be driven by developing countries, while developed countries are stagnating in terms of population size in their ageing societies. Almost 100 years on, the international institutions that shape and influence world affairs are in need of renewal.

In terms of major global initiatives, the year 2013 proved to be a landmark year, with Chinese President Xi Jinping launching the Belt and Road Initiative, which has become a flagship for international cooperation, while also serving China’s geopolitical, economic and financial ambitions.

The wave of deglobalisation has led to an increasing focus on regional organisations. China could be one of the big winners in this respect. Among other things, China aims to increase the recognition and membership of groupings such as BRICS and the Shanghai Cooperation Organisation (SCO).

Given that the GDP output of the BRICS member states in 2022 exceeded that of the G7 (BRICS global GDP 31.67 percent, G7 global GDP 30.31 percent), it can be said that Eurasian-centred cooperation, which challenges Western cooperation systems, is playing an increasingly important role in the world economy. The SCO also points to increasing cooperation, its main objective is to promote a new type of international political and economic order.

China has recognised the importance of the Global South as the largest and fastest growing region in the world. According to Xi Jinping’s 2021 declaration, China will always be a member of the developing countries family and will do its utmost to increase the representation of developing countries in the global governance system, thus supporting their stable development.

The unexpected twists and turns of globalisation require countries to cooperate in a spirit of mutual benefit and common interest.

China’s promotion of peaceful coexistence in the new multipolar world order, in which other states have the opportunity to rise, while firmly refraining from interfering in the internal politics of other countries and not making its aid and other assistance conditional on domestic political conditions, contributes to this. The new harmonious model of globalisation must embrace inclusiveness, multilateralism and sustainability.

8

MACRON’S ASIAN OUTREACH by Ágnes Zsófia Magyar

Photo: AFP/Ludovic Marin

A street vendor in Dhaka, Bangladesh offers snacks to France's President Emmanuel Macron in September

A PURE POWER-PLAYER: EMMANUEL MACRON STANDS FOR EXTENDING EUROPE’S RELATIONSHIP TO ASIA AND THE INDO-PACIFIC REGION AND DISAGREES WITH ESTABLISHING A NATO OFFICE IN JAPAN. HE WANTS TO INCREASE THE FRENCH INFLUENCE AND HEGEMONY IN ASIA, BUT HE DOESN’T INTEND TO SHARE THOSE WITH OTHERS AND WOULD LIKE TO KEEP NATO A WESTERN-PARTY ORGANIZATION.

Seven of France’s thirteen overseas departments, regions and communities are located between the Indian Ocean and the South Pacific. They are home to 1,6 million French citizens – it is therefore not surprising that France is seeking to increase its influence in the region through an increased presence. According to the French president, the US-China battle is causing collateral damage to the whole world.

“Macron’s recent visits confirm his long-term plans for Asia, mainly in the area of the defence industry and technological development” Having based their growth since the 1990s on international trade and peaceful market exchanges with the US and China, Asian countries fear that the economic and technological struggle between Beijing and Washington is destabilising them and are terrified of having to choose between them.

At the moment, the French president does not officially want to spearhead such a new, but France is a sovereign nation in the Indo-Pacific region, which is the scene of a number of geostrategic developments that have a direct impact on the interests of France and its partners. Therefore, France intends to fully assume its role as a regional power to defend its sovereign interests, ensure the security of its citizens without causing a political rupture and actively contribute to regional stability and security.

Instead of advocating a third way, Macron is now offering an “alternative”: rather than seeking to balance the US and China, he is promoting “the sovereignty and independence” of states in the Indo-Pacific region amid geopolitical competition and transnational threats.

Not only does Macron keep an eye on France overseas but also on other parts of Asia: at the end of 2022, he discussed with the new president of the Philippines, Bongbong Marcos, a possible partnership for the civilian use of nuclear energy. In early

Photo: AFP/Ludovic Marin

9

France's President Emmanuel Macron and India's Prime Minister Narendra Modi in Paris on July 14

September, Emmanuel Macron met the Bangladeshi Prime Minister, Sheikh Hasina, to “consolidate the Pacific strategy” after the G20 meeting in India. He also invited Indian Prime Minister Narendra Modi to the National Day on 14 July and visited Sri Lanka at the end of his Pacific tour in July.

“According to the French president, the US-China battle is causing collateral damage to the whole world” All of the above mentioned could be a useful networking exercise, especially as France is not yet invited to the BRICS summit because of Russia’s disagreement: Moscow felt that such an invitation would be “inappropriate”, given France’s position on the war in Ukraine and its membership of NATO. How long will BRICS’ resolve last…?

The author is Deputy Head of Brussels Office of the Foundation for a Civic Hungary, the party foundation of Fidesz

The Economics of Geography

Source: European Council

10

Charles Michel, the head of the European Council meets Chinese President Xi Jinping

Derisking fails to reach its goal

by Philip Pilkington

WITHIN MONTHS OF THE RUSSIAN INVASION OF UKRAINE IN FEBRUARY OF 2022, A PANIC SET IN AMONGST WESTERN LEADERS AND COMMENTATORS REGARDING CHINA. THIS CULMINATED IN A SOURING OF RELATIONS BETWEEN THE CHINESE GOVERNMENT AND THE BIDEN ADMINISTRATION IN FEBRUARY OF 2023 WHEN THE LATTER CLAIMED THAT THERE WAS A CHINESE SPY BALLOON OPERATING IN AMERICAN AIRSPACE AND THAT IT WOULD BE SHOT DOWN.

Photo: AFP/Pedro Pardo

11

EU High Representative Josep Borrell with Chinese Foreign Minister Wang Yi

The Chinese responded with dismay at this bizarre claim by the Americans, and relations between the two countries have failed to normalise since.

Shortly after the Great Balloon Scare of 2023, the Biden White House began talking about the dangers inherent in the deep linkages between the Chinese economy and the rest of the world. Commentators began to discuss whether America and its allies could decouple from the Chinese economy. As it became increasingly obvious that this was

MOST EUROPEAN COMPANIES

“A cynic might say that derisking really means an attempt by America and its allies to maintain a technological edge over China” impossible due to the sheer scale of economic integration that globalisation has led to, American officials began to instead talk about “derisking”.

Derisking appears to mean something like onshoring components that are considered key from a national security perspective. Certainly, America’s attempt to restrict Chinese access to advanced semiconductor technology was justified on the basis that China might use these for military purposes. Yet, when derisking is discussed, it is usually in reference to high-tech products. A cynic might say that derisking really means an attempt by America and its allies to maintain a technological edge over China.

FUTURE INVESTMENTS PREVIOUSLY PLANNED IN CHINA

STAY IN CHINA Only one in 10 European companies have shifted investment away from China, according to a recent survey by the European Chamber of Commerce in China, published in the Financial Times (FT). The vast majority of companies do not plan to shift. According to FT, “Apple and Intel have allocated future investments to other countries including India or south-east Asia while maintaining their China plants, in a hedging strategy known as ‘China plus one’. But the most contemplated strategy is ‘China for China’, whereby China operations are reorganised so that they produce goods only for domestic consumption.”

Source: FT/ The European Chamber of Commerce in China • Graphic design: Alexandra Érsek-Csanádi

8 14

11

67

11 7 13

69

12

“It appears that Americanled attempts to legislate their competitiveness through diktat are selfdefeating – something anyone who has taken an undergraduate class in economics should have been able to tell you”

Photo: AFP/Xinhua, Shen Hong

How has the American strategy been working so far? Not very well. In recent weeks, the Chinese company Huawei has released its new smartphone, the Mate 60. The new phone contains a domestically produced chipset, the Kirin 9000S, that the Americans thought the Chinese were incapable of producing. After the Mate 60 was released, the Chinese government announced that they would be allocating a further 40 billion dollars to the socalled “Big Fund”, which invests in innovation in the Chinese chip industry.

Western companies seem completely baffled by the derisking rhetoric. This is not surprising because the messaging is extremely unclear. In the case of, say, the sanctions imposed on Russia, it is clear what Western companies can and cannot do.

But the vagueness of the derisking rhetoric just leaves Western companies confused.

Delegations from 151 countries including 17 heads of state and 7 prime ministers attended the latest BRF

The data on foreign direct investment (FDI) shows some nervousness, too, having fallen by 34 per cent in September of September 2023. But all of this begs the question: who benefits from this? China is far too large and advanced an economy to rely on FDI in the same way a small country like Hungary does. If Western companies pull their operations out of China or even cease to grow them, it seems likely that the Chinese will just create their own.

The author is a macroeconomist, investment professional, and an external fellow at the Hungarian Institute of Foreign Affairs

BELT AND ROAD FORUM SHOWS UNITY The Belt and Road Forum (BRF) was held for the third time in Beijing on 17-18 October, with more than 10,000 people registered. The Chinese leadership has much to celebrate as 2023 marks the tenth anniversary of the Belt and Road Initiative (BRI) - formerly known as One Belt, One Road which has seen more than 150 countries and 30 international organisations sign cooperation agreements from the Eurasian supercontinent to Africa and Latin America. This time, delegations from 151 countries and 41 international organisations attended the meeting, with seventeen heads of state and seven prime ministers present. “We have learned that humankind is a community with a shared future. China can only do well when the world is doing well. When China does well, the world will get even better,” Chinese President Xi Jinping stressed in his keynote address. “The clearest message from this Forum is unity, cooperation, openness and win-win outcome,” Foreign Minister Wang Yi said. Hungarian Prime Minister Viktor Orbán was the only acting EU leader to attend the summit; in his speech, he stressed the importance of connectivity instead of isolation. György Matolcsy, Governor of Magyar Nemzeti Bank, the central bank of Hungary, said that the Chinese initiative is mutually beneficial, unlike the zero-sum thinking of the West: It is not just a win-win situation, but “win, win, win and many more wins” – his speech quickly went viral in Chinese media.

Experience-based education for the professionals of the future!

During the 5 years of existence of the BIB, with the help of 450 instructors and with more than 1700 successfully delivered courses for nearly 23.000 participants, we have provided experiential learning in 150 subject areas and topics.

Broad course portfolio at the BIB Sustainability | Finance | IT / Digitalization | Lending / Risk Management | Capital Market Real Estate Market | Management | Soft skills | Authority Trainings | In-House Courses

• www.bib-edu.hu • Join us and be part of our student community!

Visit our website for our current training courses or contact us at the email address below!

www.bib-edu.hu

info@bib-edu.hu

14

Anti-China policies have no majority

by Olivér Hortay – Barna Péterfi

As it is clear by now, the economic sanctions against Russia, introduced by the EU, did not bring the promised success. The Russian economy tanked, increased its income on energy exports due to rising market prices in the EU and managed to capitalize on its experiences in fighting off some of the negative impacts of sanctions from the restrictions introduced back in 2014 and after. It also successfully rerouted some of its supplies to reach desired markets through countries like China. This further deteriorated political ties between the EU and China to the point that the Union revealed it is ready to put economic pressure on China to ultimately make ends meet with Russian sanctions.

Photo: iStock

SINCE ITS ECONOMIC RISE, CHINA HAS BEEN A SERIOUS CHALLENGER TO THE UNIPOLAR GLOBAL ECONOMIC WORLD ORDER AND A FIERCE COMPETITOR TO THE CURRENT HEGEMON, THE UNITED STATES. THIS HAS LED TO RISING TENSIONS BETWEEN THE US AND ITS ALLIES IN THE WEST AND CHINA IN RECENT YEARS. AS CHINA BECAME A MORE AND MORE PROMINENT CHALLENGER, THESE ECONOMIC AND POLITICAL STRAINS INCREASED FURTHER.

15

“MOST EUROPEANS PREFER TO HAVE A MUTUALLY BENEFICIAL AND PEACEFUL ECONOMIC RELATIONSHIP WHICH IS BUILT ON CONNECTIVITY, NOT DIVISION” This was matched with Brussels’ and Washington’s idea of decoupling our economies from China’s. As this proved not possible, Ursula von der Leyen set her new agenda, “diplomatic and economic derisking”, which included a critical move by the European Commission: the “ex officio” launch of anti-subsidy investigations into EU imports of battery electric vehicles (BEVs) from China. Coupled with another attack on China – encouraged by lobby efforts from Washington –, the anti-subsidy investigations into steelmakers could destruct political ties with China and would eventually cause critical damage to the European markets.

Századvég has examined whether European citizens support the measures Brus-

sels is taking against China. According to its survey, only 8 out of 27 states want tougher policies against China. The rest – 19 states – don’t agree with the desired hard measures, which means that the majority of Europeans are in favour of peaceful economic cooperation.

Overall, it can be concluded that EU member states opposing tougher policies on China for its relations with Russia are in the absolute majority. This is partially explained by the fact that Europeans think the greatest loser of economic sanctions against Russia was the EU itself.

Olivér Hortay is Business Unit Head at Századvég Konjunktúrakutató Zrt. Barna Péterfi is a consultant at Századvég Konjunktúrakutató Zrt.

WHICH OF THE FOLLOWING STATEMENTS ABOUT CHINA DO YOU AGREE WITH MORE?* No need for tougher action, peaceful economic cooperation should be pursued Tougher action should be taken against China over its relations with Russia

*MAJORITY OPINION PER COUNTRY Source: Századvég, Európa Projekt, 2023 • Graphic design: Alexandra Érsek-Csanádi

16

New Sustainable Economics

The green transition also represents a turning point for the shaping of industrial and trade alliances at an international level”

THE RACE TOWARDS GREEN TRANSITION

17

by Mariann Őry Photos: Róbert Hegedüs

ACHIEVING THE OBJECTIVES OF GREEN TRANSITION REQUIRES SUBSTANTIAL INVESTMEN, BUT IT ALSO ENABLES AN INDUSTRIAL AND TECHNOLOGICAL ADVANTAGE OVER A COUNTRY’S MAIN COMPETITORS, WITH BENEFITS FOR LONGTERM GROWTH PROSPECTS, LORENZO TAVAZZI, SENIOR PARTNER AND RESPONSIBLE FOR THE INTERNATIONAL DEPARTMENT OF THE EUROPEAN HOUSE – AMBROSETTI TOLD US ON THE SIDELINES OF THE BUDAPEST EURASIA FORUM.

– What trends do you see in finance and the economy that show signs of a change in the world order?

– Finance is currently at the centre of several important global issues. From my point of view, we can identify in particular two issues that can have an impact on the global order.

The first concerns sustainability of finance: in fact, nowadays, an increasing number of companies refer to environmental, social and good governance (ESG) standards and green finance to make responsible investments and business strategy decisions and, at the same time, the financial services industry is experiencing rapid change across the entire value chain of the business. Sustainability in finance represents a significant opportunity to reposition their business model in line with the customer expectations, evolving economic risks and recent ESG requirements driven by politics and society. In addition to this, central bank digital currencies (CBDCs) represent an important element of change and a geopolitical competition factor.

Moreover, at the international level, the race has begun between the various countries of the world to take the lead in the challenge towards the green transition. Many countries, including the US, the EU and Japan, have announced their willingness to achieve net-zero emissions by 2050, while China by 2060. Achieving these objectives requires substantial investment in the reconversion of infrastructure, industrial systems and mobility, but it

also enables an industrial and technological advantage over its main competitors, with benefits for long-term growth prospects.

– You have also previously focused on the issue of a cashless society. In this area, we are seeing significant innovation in Asia. What would you highlight? What are the lessons for Europe?

– Asia, in recent years, has experienced a remarkable transformation in its banking and financial sector. In fact, the continent has witnessed an unprecedented surge in digitalisation and technological advancements. Asia represents a hotspot for cashless innovation. Europe, in terms of cash diffusion in the economy, still has a lot to do and can certainly learn from Asia’s experience.

– How do you see the role of central banks in increasing connectivity?

– We are witnessing a fragmentation of the global economy into opposing blocs. In this context, central banks across the world play an even greater strategic role. The first and perhaps the most important is the issuance of money. In addition, central banks have to ensure the stability of the financial systems in their economy, as well as monitor and track economic data. The final (and the most important) responsibility of central banks across the world is setting monetary policy, whose most key tool is represented by interest rates.

The author is managing editor at Eurasia

New Age – New Road

Photo: iStock

The 1 8Triumphal Arch in Chișinău

MOLDOVA the link between Europe and Asia

by Csongor B. Veress You can rarely read about Moldova, a small Eastern European country of 2.5 million people in the press.

However, it plays a big role in the geopolitical games.

Moldova only borders Romania and Ukraine, and this has a particular impact on its prospects for the near and distant future. Moldova is one of the poorest countries in Europe, with a population that is dwindling significantly every year due to brain drain and emigration. It has almost no minerals or energy resources, and its small industry is therefore heavily dependent on imports.

It stretches 350 kilometres North-South and 150 kilometres West-East and has almost no minerals or energy resources, and its small industry is therefore heavily dependent on imports. Its territory is relatively densely populated, with more than half of the population living in rural areas and working in agriculture, thanks to the excellent soil.

19 The country has a violent history, being strategically located between Europe and Asia. The country was founded in 1359, and since then, it was rarely independent. In 1990, Transnistria, a little piece of land that encircles the Ukrainian border, proclaimed its sovereignty from Moldova. Although the country is not acknowledged by the UN, the breakaway state does have its own currency and border guards. Moldova gained independence in 1992 from the Soviet Union and since then has been seesawing between East and West in its foreign policy.

In March 2022, Moldova formally applied for EU membership. Maintaining the status quo in the long term is in Moscow’s best interests because until the situation in Transnistria is resolved, there is no chance of unification between Moldova and Romania or joining the EU. If there was a conflict in Transnistria, which were to spread to Moldova, Romania would certainly not stand idly by, and NATO would be drawn into the war, which all would mean a great war between NATO and Russia.

The author is a PhD candidate at the University of Public Service (NKE)

Photo: iStock

Moldova's capital, Chișinău is the main industrial and commercial centre of the country

“THE SMALL COUNTRY PLAYS SUCH AN IMPORTANT ROLE IN OUR TURBULENT TIMES”

Developing cooperation with China “Due to its strategic geographical positioning, the Republic of Moldova could become a favourable business and investment incubator, but also a transit area for Chinese goods toward the EU market,” Deputy Prime Minister of the Republic of Moldova Vladimir Bolea told the Global Times in June, before his visit to China. He also expressed his country's interest in the Belt and Road Initiative (BRI). Bolea said that through the BRI, Moldova could revitalise railway transport in the country, rebuild public roads, and build new roads, allowing for the interconnection of Moldova with the great world economies. Vladimir Bolea signed agreements in Beijing, including a memorandum about cooperating with China to develop the wine sector. "Our producers are welcome to participate in the trade fairs held in China and will benefit from the facilities," the Ministry of Agriculture and Food Industry said in a statement cited by Radio Moldova.

21

CHINA IS LEADING THE GLOBAL AI RACE

by Joakim Scheffer

As Zhou Xin, senior vice president for public affairs at artificial intelligence-driven molecular imaging company Evomics Medical, wrote in an opinion piece published on Nikkei Asia, China created its industrial AI policy seven years ago, long before the US government came up with any kind of AI overview.

Moreover, in August, Beijing authorized the public release of new generative AI services from a wide range of companies, including Huawei, ByteDance and Tencent.

There are now more major technology companies in China offering their own advanced chatbots than in the US. “No matter how tight US export controls get in the future, AI is already taking over in China. It is transforming Asia’s largest economy despite the Biden administration’s best efforts. If the US does not want to fall behind China in the AI race, it is America that will have to change”, Zhou Xin concluded.

The author is an editor at Eurasia

Photo: iStock

ALTHOUGH THE UNITED STATES IS DOING EVERYTHING IT CAN TO CONTAIN AND SLOW DOWN CHINA’S DEVELOPMENT, IT SEEMS THAT IT WILL NO LONGER BE ABLE TO DO SO IN THE FIELD OF ARTIFICIAL INTELLIGENCE.

HYPERSONIC REVOLUTION

China has developed a new surface material for hypersonic vehicles that can remain intact after a long flight, scientists involved in the project announced, South China Morning Post reported. This technology was previously thought impossible. Such new thermal protection technology could help in the development of another generation of reusable hypersonic vehicles with longer ranges and faster speeds and constantly breaking through the boundary of flying. The hypersonic race has moved into a new stage, and it seems like the US is lagging behind China, the article concludes.

2T2 C : Ta l e n t , Te c h n o l o g y ,C a p i t a l , C o g n i t i o n

The secrets to the success of Chinese education

“The Chinese people respect the knowledge, experience and wisdom that teachers hold” Photo: iStock

22

by Fan Mizi

AS A RESEARCH ASSISTANT IN THE LEARNING FROM ASIA PROJECT OF MCC LEARNING INSTITUTE, THREE MEMBERS OF THE PROJECT TEAM – JÁNOS SETÉNYI, DIRECTOR, GÁBOR HALÁSZ, PROFESSIONAL MENTOR, AND I PAID A FACT-FINDING VISIT TO CHINA THIS MAY. WE VISITED PRESTIGIOUS CHINESE UNIVERSITIES AND SCHOOLS AND HAD INSPIRATIONAL TALKS WITH TALENTED PEOPLE AND SCHOLARS. DURING THE JOURNEY, THE PICTURE BEHIND THE SOCALLED “CHINESE EDUCATIONAL MIRACLE” WAS GETTING CLEARER AND SHARPER. What we have found is that the “success factors” actually grow in a specific soil. We can’t talk about a single success or failure without considering its context.

We consider the attitude of seriousness as one noticeable factor promoting the achievement of Chinese basic education. This seriousness of school education is partly due to high expectations coming from teachers, parents, the whole society, and even students themselves. It also comes from the Chinese traditional values, for instance, respect for authority and worship of hard work.

The second point worth noting is the Teacher Professional Development in the Chinese education system. Demonstration class used for teacher

development is very common. China’s schoolbased teaching research system plays a very important role in teacher professional development as well. (The full list of examples and figures can be found on our website, by clicking on the title).

Last but not least, we should mention the education reform in China. Policy experimentation is the way the Chinese implement any national or regional education reform to test new educational approaches and reforms on a smaller scale before implementing them on a larger scale across the entire education system.

The author is a research assistant at the MCC Learning Institute and an MA student at ELTE PPK

23

INSTITUTE

24

Culture and Innovation

According to Masha, jiaozi is simple but great food, and it's easy to communicate.

CHINESE DUMPLING WITH MEAT FIND THE RECIPE ON OUR WEBSITE!

ZHU & CO

by Tamás Velkei Photos: Róbert Hegedüs

A CHINESE COUPLE SET OFF FOR EUROPE TO TRY THEIR LUCK, AND FOR A LONG TIME IT SEEMED THEY HAD FOUND THEIR WAY IN TRADE. BUT AFTER A WHILE, BUSINESS DIDN’T GO AS WELL AS IT HAD BEFORE AND THEY CLOSED DOWN. THEN THEIR SON CAME TO THE RESCUE AND, WITH HIS FRIEND, DREAMED UP A SMALL BISTRO WITH JUST A FEW ITEMS ON THE MENU. Jin Mangmang and Ji Shoushun, like many other Chinese nationals, started looking for work in Hungary years ago. They had a shoe wholesale business, which was profitable for a long time, but after competition increased, the business became less prosperous. The younger Ji became a Chinese anchor for the foreign language news programme of the Hungarian public media, where he met Maria Lopatto, Masha, who had moved from Moscow to Budapest after graduating from university.

In China, it is common for families to run tiny gastronomic manufactories, usually with one or two dishes as their main profile. They concluded that they had long wanted to be caterers anyway, so what if they opened a similar bistro in Budapest? This would be killing two birds with one stone, as they would not only be realising their own dreams, but also providing work for their parents. Jin Mangmang was known in the family to be a good cook, and she was particularly good at making Chinese dumplings (jiaozi in Chinese). So it was decided that jiaozi would be the main profile of the downtown place.

According to Masha, it is simple but great food, and it’s easy to communicate.

Ji and Masha both like to explore new flavours and dishes, and have travelled all over Hungary, a habit that gave the place its name: Zhu & Co means

pig and his partner, because, like the pig, they love to eat, they say with a laugh.

At Zhu & Co, you can taste five flavours, all based on a family recipe. The dumplings are made behind a glass wall so guests can follow the process. Each has a different colour. Originally they were one colour, but it was difficult for guests to tell which was which, so for a while now they have been colouring the dough with beetroot and spinach juice and squid dye.

Jin Mangmang and Ji Shoushun in the kitchen

„We’re not professional caterers, mum was a housewife, dad a trader, Masha a journalist, me a hairdresser, but we knew exactly what we wanted to offer people. We saw that many Asian places were working, but they were not well thought out, they had no style, no effective communication alongside them. We planned every step of the way, we knew what we wanted to achieve: not to be an average Chinese restaurant, Zhu and Co is a friendly bistro, a sincere family business,” Ji Yicheng points out.

The author is a historian and journalist.

25

26

Emre Erşen – Seçkin Köstem

S. Frederick Starr - Svante E. Cornell

Türkiye’s pivot to Eurasia

The Long Game on the Silk Road

Publisher: Routledge

Publisher: Rowman & Littlefield Publishers

Publication date: 2021

Publication date: 2018

ISBN:9781032092317

ISBN: 9781538114643

Pages: 212

Pages: 162

Despite its NATO membership and historical ties with the West, Turkish diplomacy has been orientated towards strengthening its political and economic relations with Eurasian countries over the last 20 years. This has led to Türkiye's foreign policy strategies becoming more diverse and flexible.

In this context, Türkiye's dynamism in its international relations is taken into account at both regional and global levels. This study, edited by Emre Erşen and Seçkin Köstem, closely examines the changes in Türkiye's international relations scene.

The authors consider Eurasia, which covers a vast geography, as a reflection of the upcoming multipolar world order. The authors aim to analyse the reasons behind Türkiye's recent turn towards Eurasia.

The Caucasus and Central Asia are two regions of the world that some geographical or historical interpretations refer to as one region, a claim that can even be disputed. Their historical past has largely determined the Western attitude towards the Caucasus and Central Asia. This book outlines precisely this American and European political thinking toward Central Asia and the Caucasus, which forms the basis for the judgment of many political and geopolitical analysts belonging to Western cultural circles and which has become particularly relevant today. Moreover, it highlights the failure of Western leaders to relegate the importance of this region to a subordinate status and to follow a false economic and political model.

www.pallasathenekiado.hu

K N OW L E D G E • VA LU E C R E AT I O N • C O M M U N I T Y I n t e r n a t i o n a l s c i e n t i fi c a n d p r o f e s s i o n a l b e s t s e l l e r s i n H u n g a r i a n and books with powerful thoughts from Hungary

Our recent volumes:

NORBERT CSIZMADIA:

Geovision I–II.

GYÖRGY MATOLCSY

Magyar jövőkép és stratégia

VACLAV SMIL

Nagy átmenetek

PallasAtheneKiado

pabookstore

Pallas Athéné Könyvkiadó

pallas athenekiado

GYÖRGY MARX

The Voice of the Martians

28

Rhymes in history

SUSTAINABLE EURASIAN CONNECTIVITY

Photo: Shutterstock

by Norbert Csizmadia

“To understandthe drivers of this new era, we need to know and apply the three most important keys: complexity, connectivity and sustainability”

29

THE BELT AND ROAD INITIATIVE WAS LAUNCHED IN 2013, AND IT HAS BECOME THE LARGEST AND MOST SIGNIFICANT INVESTMENT IN HUMAN HISTORY, WITH THE POTENTIAL TO EXPAND FLEXIBLY IN TIME AND SPACE AS A COMPLEX NETWORK.

China’s long-term plan is to restore Eurasia to its former historical, cultural, economic and commercial importance by building the New Silk Road, which will consist of railways, development of sea and land ports, highway construction, the creation and development of logistics centres and networks of economic corridors.

Since the announcement of the programme, China has made substantial financial investments and plans to make the „New Eurasia” economic area a reality. The New Silk Road aims to rebalance the world economy from the oceans to the land and to restore and rebuild Eurasia’s former economic, political and cultural role. In fact, the New Silk Road can be understood as a complex network that can be flexibly extended in time and space. It connects the actors that make up the new phase of globalisation: according to the latest figures, it represents about forty percent of world GDP and about two thirds of the world’s population.

Global civilisation is being replaced by a new kind of „geocivilisation”, which aims to create a harmonious world order based on common interests. It is based on the transposition of the millennia-old Chinese ecological civilisation into the 21st century. It is a long-term era based on sustainable growth: green technologies, green money, ecological thinking and peaceful development.

The winners of long-term cooperation between China and the United States, and of harmonious cooperation between centres and peripheries, will certainly be the new gateway regions, such as the ASEAN countries of South-East Asia, Central Asia or East-Central Europe, through cooperation between global cities and nation states, in addition to the centres.

The Belt and Road Initiative is a major contribution to the creation of a long-term, interconnected, complex and sustainable Eurasian world order.

The author is a geographer and Chairman of the Board of Trustees of the Pallas Athene Domus Meriti Foundation and the John von Neumann University Foundation

30

Ancient Knowledge in a Modern World

XUANZANG, the traveller of the Silk Road

by Gergely Salát

ON THE ANCIENT SILK ROAD, NOT ONLY GOODS BUT ALSO IDEAS, RELIGIONS AND SCIENTIFIC KNOWLEDGE FLOWED. BUDDHISM WAS ALSO BROUGHT TO CHINA BY INDIAN AND CENTRAL ASIAN MISSIONARIES, WHILE IN TIME CHINESE MONKS ALSO MADE PILGRIMAGES TO THE ANCIENT SOURCE OF RELIGION.

Buddhism appeared in China earliest in the 1st century and really began to spread from the 3rd century onwards. The religion and its holy books were brought to the country by different monks from different places, and several centres and schools of Buddhism developed, often translating and interpreting the same texts in different ways – this often lead to misunderstanding of the texts.

A Chinese monk named Faxian (337-422) made a pilgrimage to India as early as the 4th-5th centu-

ries, returning with a large number of sutras and writing a voluminous account of his journey. Even more famous than him, however, was Xuanzang (602-664), considered one of the greatest Chinese travellers of all time.

Xuanzang was born into a famous family of scholars near present-day Kaifeng and showed a keen interest in Buddhist teachings from an early age. He followed his brother into a monastery, becoming a novice at the age of thirteen and a monk at twenty.

31

Source: Wikipedia

“The travelling monk is the subject of legends throughout East Asia, and is regarded throughout the region as a great figure of intercultural dialogue and mediation, one of the most important travellers of the Silk Road”

The legends surrounding Xuanzang gave birth to the 16th-century novel The Western Journey or the Story of the Monkey King. In the novel, Xuanzang is protected on his journey to India by three attendants with magical powers, including Sun Wukong, the Monkey King, who is as brazen and unrepentant as he is good at fighting. He is the basis for the character of Japan’s Son Goku, the protagonist of Dragon Ball, one of the most successful manga and anime series of all time.

Confronted with the contradictions and inadequacies of Chinese translations of Buddhist scriptures, he decided to follow Faxian’s lead.

At the time, the Tang dynasty, which ruled China, forbade travel abroad, but Xuanzang broke the law in 629 and travelled along the overland Silk Road through Central Asia and then to India. He visited many kingdoms in the subcontinent, studied and copied scriptures in monasteries, met kings and studied at Nalanda, the most important Buddhist ‘university’ of the time. He travelled for more than a decade and a half, finally arriving back in Chang’an in 645, also on the Silk Road.

He did not come empty-handed: the more than 600 books, seven Buddha statues and a hundred or so other relics he had collected were brought to the capital by twenty packhorses. The sutras and arte-

facts were deposited in the Giant Wild Goose Pagoda, which still stands today.

Emperor Taizong of the Tang dynasty, received the monk with great pomp and offered him various offices. However, Xuanzang refused them and spent all his time translating the books he had brought until his death in 664.

Xuanzang’s translation work was of a very high standard. With the Emperor’s support, he set up a whole translation bureau, with staff and students from all over East Asia, to translate Sanskrit texts into Chinese with the utmost accuracy.

The author is a senior researcher at the Hungarian Institute of Foreign Affairs and head of the Department of Chinese Studies at the Pázmány Péter Catholic University

Photo: iStock

From Monkey King to Son Goku

EURASIA ONLINE ISSN 2939-8789 (Online) ISSN 3003-9339 (Print) Published by Neumann Lapkiadó és Kommunikációs Kft. Publisher's Headquarters: 1117 Budapest, Hungary, Infopark sétány 1.

“China can only do well when the world is doing well.

When China does well, the world will get even better.”

Xi Jinping

Responsible Publisher: Levente Horváth, Ph.D., Managing Director

Editor-in-Chief: Levente Horváth, Ph.D. Managing Editor: Mariann Őry, Péter Petán Text Editor: Erika Koskocki Editor: Joakim Scheffer Photo Editor: Róbert Hegedüs Cover photo: Róbert Hegedüs Graphic Design and Layout: Alexandra Érsek-Csanádi, Anita Kónya

Eurasia Online Editorial Board The EU and China are each other's Members: Ágnes Bernek, Ph.D., László Csicsmann, Ph.D., Norbert Csiz­ madia, Ph.D., Mózes Csoma, Ph.D., Prof. Zoltán Dövényi, Ph.D., Béla Háda, Ph.D., Prof. Imre Hamar, Ph.D., Eric Hendriks, Ph.D., Prof. Judit Hidasi, Ph.D., Dr. Máté Ittzés, Ph.D., Péter Klemensits, Ph.D., Kristóf Lehmann, Ph.D., Csaba Moldicz, Ph.D., Prof.

Erzsébet N. Rózsa, Ph.D., Borbála Obrusánszky, Ph.D., Prof.

József Popp, Ph.D., Sándor P. Szabó, Ph.D., Prof. Zsolt Rostoványi, Ph.D., Gergely Salát, Ph.D., Péter Szatmári, Ph.D., István Szer­dahelyi, Ph.D., Prof. István Szilágyi, Ph.D., Prof. István Tarrósy, Ph.D., Prof. István Tózsa Ph.D., Prof. László Vasa Ph.D., Zoltán Wilhelm, Ph.D., Alexandra Zoltai

Copyright : All rights of use of the databases of Eurasia Magazine Online are granted to the Neumann Lapkiadó és Kommunikációs Kft. The written material and photographs used on this website are protected by copyright. They may not be published, broadcast or transmitted in any form or by any means, or stored in whole or in part on a computer, whether in their original or transcribed form.

largest trading partner as of 2023.

The EU is the PRC's largest trading partner, and the PRC is the EU's largest trade partner.

In 2023 China accounted for 9% of EU goods exports and 20% of EU goods imports.

SCAN ME!

3

penzmuzeum.hu