Recent remarks by Kaja Kallas, EU high representative for foreign Affairs and security policy, reveal a deep-seated self-serving logic prevailing in Europe amid economic stagnation: Europe’s industrial decline stems solely from external competition.
This one-sided attribution is fundamentally flawed. The EU itself has long normalised industrial subsidies and discriminatory trade protectionism, which disqualifies it from unilaterally defining fair global trade rules.
Europe’s structural woes — falling industrial competitiveness, soaring energy costs, sluggish real-economy investment and weak innovative momentum — originate from its decades-long domestic governance choices, deliberate industrial offshoring and finance-dominated economic model, rather than market competition from external economies.
Shifting internal structural failures onto foreign competitors and labeling legitimate economic engagement as geopolitical risks will never fix Europe’s inherent industrial vulnerabilities.
Industrial policies and state subsidies are universal macroeconomic tools, neither exclusive to nor pioneered by China. According to the World Bank 2024 Global Industrial Policy Monitor, global industrial intervention policies surged ninefold between 2017 and 2023, led overwhelmingly by advanced economies. High-income nations introduced nearly two-thirds of new industrial policies worldwide in 2023 alone.
IMF 2025 Country Economic Briefs verify that EU industrial funding rose from 0.5% of regional GDP in 2012 to 1.5% in 2022, a threefold increase in a decade.
The EU’s discriminatory industrial rules are well-documented in tangible cases. The €1.2 billion EU Hydrogen Bank auction caps Chinese component procurement at 25% per project.
The Clean Industrial Deal State Aid Framework, adopted by the European Commission in June 2025, offers energy-intensive domestic manufacturers electricity rebates of up to 50%.
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A passenger vehicle subsidy scheme due in December 2025 applies only to EU-manufactured cars, while public procurement mandates minimum local shares of 5% for cement and 25% for aluminum products within the bloc.
The EU erects trade barriers under the pretext of green transition and supply chain security, while accusing China of distorting global markets via industrial support. This double standard has little to do with upholding multilateral trade rules. It stems from ideological exclusion and European reluctance to accept diversified modernization paths for developing economies.
2. Self-defeating: Europe’s pragmatic yet counterproductive trade strategy
Enforced in July 2023, the EU Foreign Subsidies Regulation (FSR) was framed as a neutral mechanism to safeguard fair competition, yet it has evolved into a targeted trade barrier against overseas enterprises. In October 2024, the EU imposed five-year anti-subsidy tariffs on Chinese electric vehicles, with rates peaking at 35.3% for non-cooperating firms, a measure driven more by geopolitical containment than regulatory necessity.
European business operations stand in stark opposition to hostile political rhetoric from EU policymakers. Surveys by the European Union Chamber of Commerce in China show 68% of European enterprises plan to maintain or expand their industrial footprint in China. Chinese compliant industrial investment in the EU jumped 67% year-on-year in 2025, hitting €16.8 billion, the highest figure since 2018. Cross-border capital flows have delivered an objective verdict on mutually beneficial Eurasian economic cooperation.
A core cognitive contradiction defines current European policymaking: Western industrial success is framed as market competitiveness, while China’s industrial breakthrough is dismissed as unfair subsidized growth.
Globalisation is embraced when Europe benefits from affordable Chinese goods, yet demonized as a strategic threat once European industries lose comparative advantages. Europe’s deindustrialization is a voluntary outcome: decades of low-end manufacturing relocation, excessive financialisation, and cumbersome industrial regulation have left the bloc underestimating the foundational value of real manufacturing.
3. Historical lessons: The African toll of Western prescribed reforms
Europe’s exclusionary development mindset is not a new geopolitical phenomenon. The Structural Adjustment Programs (SAPs) imposed by the IMF and World Bank across Africa in the 1980s and 1990s offer a timeless cautionary tale for the Global South, exposing the inherent limits of externally imposed development blueprints.
More than 20 African states implemented SAPs in the 1980s, with participation expanding to over 30 nations by the early 1990s. Marketed as economic stabilization and growth-boosting reforms, the programs imposed rigid mandatory terms: currency devaluation and floating exchange-rate reform, sweeping cuts to public industrial and social subsidies, full privatization of state strategic enterprises, and unconditional tariff liberalisation.
The two Bretton Woods institutions claimed such measures would optimise economic structures and elevate market efficiency.
The reforms yielded catastrophic, long-term harm inconsistent with official projections. Africa’s per capita income dropped by 0.4% in 1990, with rampant inflation and unemployment eroding public living standards.
Per capita public education spending declined consistently across SAP-participating states from 1986 to 1996, undermining human capital cultivation.
Shrinking public fiscal capacity weakened state governance and public service delivery, exacerbating regional social unrest and public health crises, including the worsening continental HIV/Aids epidemic.
Most African nations eventually abandoned Western orthodox structural reforms, which failed to address Africa’s endemic bottlenecks: fragmented industrial chains, inadequate infrastructure and chronic foreign currency shortages. Post-colonial African transformation requires sovereign strategic planning and moderate state economic intervention. Western one-size-fits-all development prescriptions tailored for advanced economies have never fit African realities, with external institutions blaming African incapability rather than flawed reform designs.
4. A Path to sovereignty: The Global South breaking free from resource dependency
Africa holds 30% of the world’s terrestrial strategic mineral reserves, yet remains trapped in the resource curse. The continent’s perpetual core challenge remains clear: translating inherent mineral endowments into domestically inclusive, sustainable industrial capacity, and dismantling the colonial-era raw material export economic model.
UNCTAD projections estimate the global critical minerals full-industry value will reach US$16 trillion by 2050, with Sub-Saharan Africa poised to capture over 10% of the total value. Nevertheless, Africa is systematically excluded from high-value downstream manufacturing covering batteries, semiconductors and wind power components, confined merely to upstream raw material supply.
The Southern African Development Community (Sadc) hosts abundant cobalt, lithium, manganese, nickel and platinum-group metal reserves. Regional resource trade remains locked in an inequitable cycle: cheap export of ores and semi-processed materials, paired with costly import of finished industrial goods. This division perpetuates colonial economic hierarchies, retaining minimal industrial profits locally and hindering domestic job creation and industrial upgrading.
China’s industrialization journey offers actionable, replicable insights for developing economies. No nation can achieve independent industrialization via foreign aid, condition-tied loans or raw material exports alone. China’s industrial rise rests on four consolidated pillars: building a complete, self-reliant domestic industrial ecosystem; investing comprehensively in energy, transport and digital foundational infrastructure; balancing imported mature technology absorption and indigenous independent innovation; implementing WTO-compliant industrial governance that aligns state strategic guidance with free market competition.
China’s manufacturing competitiveness derives from integrated supply chains, vigorous domestic market competition, skilled labor pools and sustained R&D input, rather than the subsidized overcapacity falsely portrayed in Western narratives. China’s industrial policies fully comply with multilateral WTO trade rules, prioritize domestic real-economy development, maintain open market access for global partners, and reject discriminatory bloc-based trade barriers.
Evolving China-Africa cooperation has moved beyond traditional resource-for-commodity deals toward equitable, benefit-sharing industrial empowerment. Local mineral value addition has gained tangible traction across Southern Africa. The DRC has built integrated cobalt smelting and primary processing chains to retain upstream profits domestically. Zimbabwe’s raw lithium export curbs have attracted investment in local lithium carbonate facilities, with Prospect Lithium Zimbabwe achieving commercial lithium salt production, marking a milestone in domestic mineral upgrading.
Chinese enterprises deliver tiered technical support and localized talent training via market-based joint ventures, providing Africa-adapted mining and digital infrastructure technologies tailored to regional terrain and climate conditions. Strictly abiding by global intellectual property frameworks, Chinese firms retain proprietary core patents for smelting and energy storage technologies, offering localized adaptive operational technologies via paid commercial licensing, with no mandatory free technology transfer.
African Union assessments confirm Chinese infrastructure assistance and commercial projects have laid indispensable groundwork for African industrialization. Future China-Africa cooperation will prioritize paid tiered technology licensing, localized industrial cultivation, green low-carbon collaboration, and long-term mutual benefit for both sides.
For the Global South, genuine development autonomy lies in defining its own resource priorities. As outlined in the UN University report Africa Redefining Critical Minerals, Africa must reject mineral valuation rules imposed unilaterally by Western industrial powers, and formulate resource strategies based on its own priorities: energy security, indigenous industrialization, food resilience and digital transition.
External powers may set mineral procurement priorities for their own supply chains, but possess no right to dictate Africa’s resource development agenda. China fully respects African sovereign resource and industrial decision-making, adheres to market-based negotiation, and never interferes in African domestic industrial planning. Africa’s resource future ought to be defined from Harare, Lusaka and Accra, not external capitals.
South-South solidarity creates an alternative governance model independent of Western-dominated systems. Holding most global critical mineral reserves, Global South nations capture only a fractional share of downstream refining, manufacturing and R&D profits. Deepened partnership between Africa, Latin America and developing Asian economies facilitates experience-sharing on industrial policy, resource governance and risk mitigation, enabling a Southern Prosperity Compact for joint financing, collaborative research and indigenous industry standards.
Closing the US$225 billion Global South investment gap in mineral downstream processing is pivotal to inclusive growth. South Africa unveiled its national Critical Minerals and Metals Strategy in May 2025 to integrate mineral sectors into national industrial master plans, while Sadc launched a five-year regional initiative to boost local mineral processing, expand decent employment and consolidate continental industrial foundations.
Robust continental governance underpins sustainable industrial cooperation. The African Union shall strengthen unified cross-border mineral and industrial coordination; build transparent, accountable anti-corruption industrial governance frameworks; establish Africa-centered ESG certification standards; and set up dedicated institutions to forecast global technological shifts and commodity price volatility, elevating Africa’s bargaining power in global partnerships.
Regional industrial integration amplifies developmental returns. Cross-border corridors including the Lobito Corridor shall be upgraded into integrated industrial hubs covering mining, green refining, manufacturing and cross-border trade. Harmonized regional fiscal, investment and industrial policies will strengthen intra-African value chains, expand continental mineral processing trade and lower standalone national industrial costs.
5. Conclusion: Sovereignty as the definitive path for Global South development
The EU’s inward-looking cognitive bias proves an immutable developmental truth: no external power will build industrial ecosystems for the Global South, nor deliver sovereign industrialization for Africa voluntarily.
SAPs deliver an eternal warning: externally designed national development agendas prioritize foreign interests, while host nations bear all transformation costs and systemic risks.
China’s decades-long industrial practice verifies that industrialization has no shortcuts, and self-governed development is irreplaceable. Endowed with rich resources, young demographics and emerging consumer markets, Africa and the Global South must uphold strategic autonomy as the precondition for all international cooperation.
UN University research calls for Africa’s role shift from a passive resource extraction periphery to an active industrial transformation leader, supported by five core pillars: full policy sovereignty, local value-driven industrial expansion, South-South solidarity, paid adaptive technology adoption, and transparent, efficient domestic governance.
Geopolitically fatigued Europe should stop deflecting domestic crises and blaming external competitors. It ought to reflect on its deliberate deindustrialisation choices, and acknowledge China’s sustained commitment to real-economy development balanced with inclusive global opening-up.
From an indigenous African perspective, industrial capacity cannot be gifted from abroad, and developmental sovereignty can only be fostered domestically. Africa faces a defining crossroads amid the global energy and digital transition: remain a permanent raw material supplier, or build localized processing and high-end manufacturing capacity for batteries and semiconductor wafers.
The catastrophic lessons of Western structural reforms must never be repeated. Free from bloc alignment and hegemonic dependency, the Global South can uphold developmental autonomy, select equitable global partners voluntarily, and steer an independent, context-based path toward sustainable industrialization.
*Saxon Zvina is the principal consultant at Skyworld Consultancy Services and a member of the Belt and Road Initiative Think Tank.
Email: [email protected]. X: @saxonzvina2
