Shenzhen exposes the delays in Draghi's report

When Draghi was presenting his report on the future of Europe, I was attending a workshop at the UN Climate Change Global Innovation Hub (UGIH) in Shenzhen. Here one could get a real sense of the European backwardness that Draghi was talking about. Shenzhen, with over 17 million inhabitants, is a huge showroom for the amazing results of China's eco-innovation system. Many of the companies that President Xi Jinping has described as exemplary of high-quality growth in China's new phase of development are based here, such as Huawei, Tencent, drone maker DJI, and car maker BYD. The total share of non-fossil energy has exceeded 40 per cent this year and will reach 60 per cent by 2030. Seventy-three per cent of cars are electric, as are 16,000 public transport vehicles.

The Shenzhen-Hong Kong-Guangzhou technology cluster has been ranked second in the United Nations Global Innovation Index for the past five years. In 2023, foreign-funded industrial investment amounted to US$2.4 billion, an increase of 186 per cent compared to 2022, while high-tech industries grew by 16 per cent over the same period.

The synergy between digital technology and new energy sources is driving Shenzhen's rise. This year, Shenzhen's power system will be managed entirely by the Virtual Power Plant, a large-scale centralised control system, while Huawei has announced a breakthrough in grid formation technology.

In Shenzhen, I also met key figures from Italy's innovation industry, such as Motus-e, the electrical industry association headed by A2A e-mobility CEO Pressi, and delegations from the Politecnico di Milano and the Italian Confederation of the Electronic Industry (ANIE), and together we visited Huawei's research centre. They are pioneering companies in Europe's competitiveness challenge. They are asking policymakers to speed up the process, to avoid delaying the battle and to ensure certainty of investment.

One thing is certain: for them, as Draghi said, innovation and competitiveness must be realised through the Green Deal. They seem to take the same view when it comes to China. As Spanish Prime Minister Sanchez pointed out in Shanghai, it is more economical to co-operate rather than compete, and he called for a reconsideration of tariffs on Chinese cars.

Draghi, on the other hand, cited the photovoltaic industry as an example, suggesting that the transition of the European industrial system to electrification should be accelerated by taking advantage of the cost advantages offered by Chinese mass production.

In short, it is time for Europe to avoid fragmentation and dispersion, and to concentrate and invest in areas of technology where we can lead.

Draghi also drew a distinction between the EU's trade policy - which should reflect Europe's "national" interests - and Washington's policy. It is clearly in Italy's interest to attract investment in Chinese electric car production. However, we need to provide the appropriate infrastructure, conditions, and innovation ecosystems to meet the needs of the new value chain.

Questions remain about the supply of raw materials needed for the transition, but this may be resolved through agreements with producing countries.

The issues mentioned by Draghi are not new, but his name and weight are particularly important. Now, policymakers, based on data and numbers, need to make decisions that, as the Gospel says, will be based on clarity, consistency, and decisiveness. "Yes is yes, no is no."