Strengthening cooperation to promote the development of the high range Blue Economy

The “blue” industry, especially the high range one, is one of the main development areas for the economy also in the near future.

 China, which has always tried to strike a balance between maritime power and terrestrial equilibria in the Heartland, is the right place to think – for the first time – about a complete water geopolitics, as well as a real global industrial project.

The products that will be the axes of the new future technological revolution will increasingly come from the sea: energy, fast transport; rare metals, but also the most common ones; desalinated and processed water; DNA for study purposes and for medical applications, as well as oil and finally various traditional and non-traditional forms of food.

 If, from now on, we create a global market for the Blue Economy, we will have safe and peaceful world development. Otherwise, if we repeat the old land struggles on the new sea – possibly with the same violent acquisition logic – we will have such new wars that the experience of land clashes cannot even make us imagine.

The Earth is finite and limited. Now we have to work on the sea, but we have to do so all together peacefully and with win-win actions.

 It is estimated that the most environmental-friendly marine industry is currently worth 1.5 trillion US dollars and it is expected to be worth at least twice as much by the end of 2030.

Nowadays China dominates in all these blue economy areas. China’s fishing in foreign waters accounts for 44% of the world’s entire product and the same applies to ocean fishing, which accounts for 52% globally. This also holds true for China’s marine wind energy which accounts for 20% in the world. Also 50% of all the most active ports in the world are Chinese. Unfortunately, China also holds negative records such as 56% of all rivers polluted by plastics in the world.

Half of the world’s industrial fishing is Chinese. Hence, nowadays, China is already the world’s largest sea farmer.  It has already organised the exploitation of its largest marine area for deep-sea mining, thus focusing on a deep-sea area that is four times the size of Switzerland.

 Either you do good business with China in these areas or it is better staying at home.

 Therefore, it is necessary to think about a sea “Silk Road” and not only to reach the Mediterranean.

 A Silk Road to quickly change the whole paradigm of the world economy.

Hence, at the same time, it will also be necessary to reduce polluting emissions and possibly start the construction of many ocean parks, with a view to making the sea recover the products that are extracted from it.

 Fixed cycle of nature, stability of economic cycles.

 Among the companies in the various sectors of the Chinese Blue Economy, the collaboration with selected companies will be particularly useful both for the actual production of marine materials and for environmental protection. It should be recalled that the latter is a side of the Blue Economy coin. China does not think that environmental protection can be separated from the extraction of marine products.

 In Europe, the Blue Economy system is still in the development phase. Hence the figures are still quite small: in 2017, the turnover of the whole sector was 658 billion euros, with a gross profit equal to 74.3 billion euros and a number of employees amounting to 4 million throughout the EU-28.

 Within the European framework, the Blue Economy envisages the usual sectors of the Chinese one, albeit with a specific focus on underwater defence, which in China is calculated separately, in addition to putting all marine biotechnologies into a single category. The EU also envisages sea renewable energies as the greatest sector for future development.

 The traditional European demography is another factor to be considered: 45% (214 million) of the EU population lives on the coasts and the Northern ones always record a higher GDP than the Southern coasts.

 The successful European activities in the Blue Economy are still the traditional ones: tourism, spa and health services and some standard biotechnologies.

Obviously there are also maritime construction and repairs, but in specific areas of the European coasts – activities that now tend to be off the market.

Hence an EU Blue Economy linked to labour-intensive technologies, with insurmountable natural differences in the maximum use levels of the various areas.

 Never as in the case of the Blue Economy do large expanses and boundless areas count – all the dimensions that, as Hegel said, have always been lacking in the physical and geographical dimension of the Eurasian peninsula.

 The Jews called the Mediterranean “the Great Sea”, but this expression does not describe its physical dimensions, but only its historical and cultural ones.

Furthermore, coastal tourism in the EU is worth 54% of all “Blue” jobs and it is still growing, while the transport-related marine economy sectors are decreasing and the remaining maritime sectors are growing very slowly or are stable.

 The problem lies in the fact that the Blue Economy is a global project for transforming the production systems and lifestyles. It is not just a matter of hotels by the sea or deep-sea fishing.

For the EU – which is not a Blue competitor of China, but an area of possible integration of tasks and functions – the living resources of the sea still account for a mere 14% of all “Blue” jobs in the EU. It is, indeed, a very low percentage.

 The extraction of metals from the seabed is scarce in the EU. It accounts for 4% of employment in the whole Blue sector.

Clearly this also includes oil and gas. And both sectors are declining in terms of profit and investment.

There are 600 active offshore platforms in the EU.

 Shipyards account for 8% of employment in the sector, while the maritime product from seaweed processing is very low, with China already accounting for 46% of the world market and with only 6 EU projects currently active for aquatic biomass.

There are only 11 major desalination plants in the EU, mostly owned by large multi-sector companies.

Moreover, we should never neglect the coastal control of climate change, which can become a big global industry.

However, since the time of the report by the Club of Rome that, in 2009, invented the very concept of Blue Economy, his author, Pauli, has always stressed that the Blue Economy is part of the Green Economy – which is always a sustainable practice – and that it is based on new technologies.

 And here we revert immediately to China.

China has always been particularly interested in the Blue economy and in technological innovations, with the construction of marine areas of economic innovation. Just think about the Blue Economy Zone of the Shandong Peninsula, established in 2011, where, four years later, an integrated marine economic system began, which in 2020 is expected to become a great mechanism of ecological Blue economy with a high rate of innovative technology.

 In 2012, it was the turn of the Quingdao Blue Silicon Valley, a city for the new maritime scientific technologies.

Later China established other industrial areas for the protection of biodiversity and for new marine technologies, mainly in the Yangze River Delta.

 Since China’s 13th Five-Year Plan, the Blue Economy has been an ever-growing part of China’s GDP.

 Hence, from the Deep-Sea Dragon, a system for producing experimental deep-sea and surface platforms.

There are also the White Dragon’s explorations in the Arctic, albeit with a future research base in the Antarctica, and the Global Multidimensional Network for Ocean Observation, i.e. the network of stations that can be connected to all the scientific, climate, technological and energy observation stations that already operate in other parts of the two thirds of the Planet, namely those covered with water.

We should also recall the collection and processing of minerals extracted from the seabed.

In this case, the international regulations are already very detailed, but it is currently very hard to predict the aggregate effects, which are mutually reinforcing and with unpredictable percentages.

 Nor should we neglect the Great Lakes Observing System (GLOS), which is one of the 11 associations in the world that scientifically study the Integrated Ocean Observing System (IOOS).

It initially regards the Great Lakes region between the USA and Canada, but it is also much studied in China.

 And the network of Chinese marine sensors will certainly be connected to the large areas of global verification and study.

Hence the problem will increasingly be to control both internal and external waters at the same time.

With specific reference to the Chinese political practice, the 2018 great reform of the State Council, which placed sustainable development at the core of China’s planning, was decisive.

 Since then, there has been a Minister for Natural Resources responsible for all land and sea natural areas, as well as for the economic use of land and for the protection and rehabilitation of the most endangered areas or of the already polluted ones.

While in almost all Western countries these powers and responsibilities are divided between various Ministries and Administrations, in China the already efficient chain of command is in the hands of a single political body and of a single Minister. The maximum efficiency for a chain of command.

 Moreover, China is currently going through a particular phase: from the fast and traditional development to an even faster one, albeit characterized by high environmental, social, ecological and technological quality.

 A new “development way”, which does not imitate Western traditions, but places science and technology into a new vertical and fast political system.

 In the Taoist philosophical tradition, to which Mao Zedong essentially belonged, quality and quantity are not always separated in reality and can be analysed, but only through multiple analogies.

Said analogies never stop and cannot be logically separated.

Still today, this is the basis of the political and economic action of the Chinese Party and State.

 Not an ordinary imitation of capitalism, but new and free efficiency of a technical-scientific network that is directed with market criteria of mutual interest, completely open to controls.

Hence development based on technology but, above all, on the protection of the environment and therefore of human and animal life, as well as of the life of the elements – and all at the same time.

Once again, the Taoist tradition.

Obviously the protection from pollution is central to the Chinese Blue Economy project. Just think about the project for the ecologization of the Bohai Sea, started in November 2018 –  a three-year plan that will lead to the stable cleaning of 73% of all the Bohai Sea coasts.

 Rapidity, efficiency and no operational difference between environmental recovery activities and actions to make income from the sea.

 In essence, China’s Blue System is divided into two sectors, albeit always interconnected: development of innovative scientific and technological products related to the sea economy, and later, during and after the process, the integrated protection of the environment.

 Again to compare China with the European Blue Economy policies, it should be recalled that the EU seas host about 48,000 different species, while the Chinese seas cover an area of approximately 6 million square kilometres, ranging from tropical to temperate climate and up to the Great Cold climate areas.

 There are as many as 32,000 kilometres of Chinese coastline, with 22,629 species belonging to 46 phyla.

 Data not comparable with those of the Mediterranean, but certainly able to permit, from the very beginning, large economies of scale.

In the EU the per capita yearly consumption of fish is 24 kilos, compared to 41 kilos in China.

  It should be reiterated that China has already reached the highest levels of ocean fishing, both in terms of volumes and technologies, outside and inside its territorial waters. Moreover, technologies and economic returns can be useful to everyone.

Worldwide, the actions known as Our Ocean, started by Secretary of State Kerry in 2014, have led in the West only to 36 marine actions to the tune of 550 million euros, and to other commitments, albeit not yet funded, resulting from the 2018 Bali Conference.

Only 64 million euros were allocated for the Mediterranean, and 37.5 million for the South African and Indian Ocean coasts.

Obviously this is positive, but it should be recalled that Chinese investment is already much higher and not only due to the very large size of China’s Blue Area.

Last year the Chinese ocean GDP grew by 6.7%, thus reaching 9.3% of China’s total GDP. In 2018, 17.2 billion yuan were invested in the production of offshore renewable energy.

Excellent data, but this is just the beginning.

An additional 5.5% has been recorded for Chinese maritime transport, while the average yield of traditional fishing is slightly declining. Maritime tourism has already grown by 8.3% in China.

 An excellent rate, not even comparable with the rate in the EU, where tourism is one of the fastest growing sector in the Euro-Mediterranean Blue Economy.

Furthermore, while – without any particular use of advanced technology -the Blue Economy in the EU is still largely a possibility, in China it is already a well-established reality.

 As the philosopher and sinologist Jullien would say, possibility and reality are the same image, albeit seen in two different ways, but not necessarily at two different moments.

Currently tourism accounts for 61% of jobs in the EU Blue Economy. As we can see, it is an old business with a low average return.

The EU aquaculture is still a small sector compared to China’s huge size and technology, even in proportion to the population, but all the sustainable ocean exploitation programmes in Europe are postponed to an indefinite future and are at risk of funding.

  Renewable marine energies will reach 10% of European consumption in 2050-a percentage which already pales into insignificance compared to the Chinese ones.

Apart from bureaucratic and administrative efficiency, with the Chinese Blue Economy we are already on another planet. The Chinese scientists are already thinking about a Blue Economy divided into three major areas: the resolution of water scarcity;the search for deep waters and the cleaning of surface waters.

 They are also thinking about technological innovation, which is scarcely pursued in the EU. China has already developed 100 projects, for 10 years, with 100 million new jobs. All these projects have already begun.

 Finally, in China there will be an integrated marine economy between research and the balanced exploitation of resources.

In particular, the development sectors that China currently likes are deep-sea aquaculture with the use of cages; ocean satellite communication, which is optimal; marine biomedicine; desalination with advanced technologies; the search for minerals in the seabed; offshore oil exploration; research into marine antiseptic and medical materials; the production of renewable energies at sea.

 It is in these areas that China’s greatest ten-year effort will develop.

 The management of the Chinese sea is based on a simple concept: the ecological absorption capacity of the seas.

Protection is based on the criterion of sustainable development, not on the circular economy with a zero return rate. Everything is designed to reduce environmental waste.

Moreover, sustainable development between land and sea -which is another specific issue for China – will be the development and not just the preservation and conservation of coasts.

 The primary concept for doing all these things together is Harmony, a Confucian criterion that relates Man to his Environment.

Hence coordinated development between economy and society.

This is the same deep criterion of the “Silk Road”: a harmonious, global and strategic project that works only with market rules and is connected to a win-win logic, which ensures benefits to everybody.

 According to the latest data available, in China the companies related to the Blue Economy have grown at a pace ranging from 14% to 4%.

 For the time being, the regions directly concerned are the following: Zhejang, which is responsible for implementing the “Maritime Strategy of the East Sea” and focuses on ports and island economies.

 Then there are Guangdong, which hosts the companies operating in the integrated management of the maritime economy; Fujian, where cooperation through the straits is pursued; Shandong, which develops the “Blue Economy Zone of the Peninsula” to create a primary gateway to North East Asia, and finally Tianjin, where high-level maritime technology is put into practice.

As early as 2001, 14.46 million people have already been employed in the Chinese Blue Economy, with a one million increase every year.

The cooperation with Western companies is already in place both at financial level, so as to share cutting-edge technologies, and for the participatory development of regions and companies.

Furthermore, the Chinese Smart Ocean programme also envisages a network of sensors on the coasts, at sea, in flight and in the space.

 All this is designed to build a complete real-time monitoring system of all China’s seas and rivers –  a network that should connect to the equivalent systems in other parts of the globe.

 A turtle strategy that, according to Chinese tradition, epitomizes the North and the Waters, but is also invulnerable, due to its powerful shell.

Giancarlo Elia Valori
Giancarlo Elia Valori
Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is a world-renowned Italian economist and international relations expert, who serves as the President of International Studies and Geopolitics Foundation, International World Group, Global Strategic Business In 1995, the Hebrew University of Jerusalem dedicated the Giancarlo Elia Valori chair of Peace and Regional Cooperation. Prof. Valori also holds chairs for Peace Studies at Yeshiva University in New York and at Peking University in China. Among his many honors from countries and institutions around the world, Prof. Valori is an Honorable of the Academy of Science at the Institute of France, Knight Grand Cross, Knight of Labor of the Italian Republic, Honorary Professor at the Peking University